

O ^.<^^^- rO^^"% ^'^^^.^ j'^'^C^ ^-^^^^^ c.'>^^^% - 




s^ ^^..^^ .^I^Mo \.r /^^ U^a"" ^'^ 








» .rc^^.o,"^ « o 



e N o * . V 












-^' -MM^^.-' ^-tt-A' »v«^a^ .^-^.iv^ -^Mm^^^ '^^.A 




"° %. ^^'^ 'Ji&' % 



* /^ 



^^0^ 








<^. o 






'^0^ 








^^ *o«e^ ^V^ 










^F^^ *' S N C 



bV* 
















.♦^•"♦, 










V 
ri^ s * * > '*^^ ^ V ^ ■^ 




















O > 









^<? 



UNITED STATES TARIFF COMMISSION 
WASHINGTON 



COLONIAL 
TARIFF POLICIES 




O --^ 



WASHINGTON 
GOVERNMENT PRINTING OFFICE 

1922 



.<L 



UNITED STATES TARIFF COMMISSION 
WASHINGTON 



'7 J V 

'I?7 



COLONIAL 
TARIFF POLICIES 






WASHINGTON 

GOVERNMENT PRINTING OFFICE 

1922 



VA^ 



^^ 



^ 



^o^ 

C^^^ 



UNITED STATES TARIFF COMMISSION. 

Office; Eighth and E Streets NW, 
Washington, D. C. 

COMMISSIONERS. 

Thomas Walkee Page, Chuirman. 
Thomas O. Maeyin, Yice Chairman. 
David J. Lewis. 
William S. Culbeetson. 
Ebwaed p. Costigan. 
William Bukgess. 

John F. Bethuke, Secretary. 



LIEM^RY OF CONQ«£SS 

APR 151922 



ADDITIONAL COPIES * - 

OF THIS PUBLICATION MAY BE PROCURED FSOSI 

THE SUPERINTENDENT OF DOCLTMENTS 

GOVERNMENT PRINTING OFFICE 

WASHINGTON, D. C. 



$1.00 PEE, COPY 



NOTE. 

This report treats in' detail of the tariff policies of the colonial 
powers and of the self-governing Dominions of the British Empire, 
Part I contains chapters on tariffs and tariff policies in the colonies 
of Belgium, France, Germany, Great Britain (Crown Colonies and 
India), Italy, Japan, the Netherlands, Portugal, Spain, and the 
United States, with some general descriptive and historical matter. 
The tables of contents prefixed to each chapter, and the general index 
will enable the reader readily to locate the discussion of any phase of 
the subject in which he may be especially interested. Part II sets 
forth the development of the preferential tariff policy in the British 
Empire, with chapters on Great Britain, Canada, Australia, New 
Zealand, South Africa, and Kewfoundland. 

A large part of the Introduction and Summary is based upon the 
material contained in other chapters, but it begins with an outline 
of the rise of the modern colonial empires. After establishing the 
necessary distinctions between the different kinds of colonies, it dis- 
cusses the characteristics and importance of colonial trade. The sum- 
maries of the other chapters of the report include brief statements 
of the general policy of each of the colonial powers, but the survey 
of colonial tariff policies is mainly developed subject by subject. In 
the sections of the Introduction and Summary devoted to treaty 
obligations, import duties, export duties, intercolonial trade, the 
treatment of colonial products in the market of the mother country, 
and minor and concealed preferences the reader will find a general 
presentation of those topics. It is felt that the material presented in 
this chapter will be sufficient to introduce the subject, and it has been 
published separately under the title Introductory Survey of Colonial 
Tariff Policies, which may be obtaiR^d from the Government Print- 
ing Office for 10 cents a copy. ^"^^~~— -____— ———-~^*" ' 

It is believed that the text or notes include substantially every de- 
velopment of any importance in the field of colonial tariffs to the 
middle of November, 1921. 

In the preparation of this report the Tariff Commission has had 
the services chiefly of Dr. Benjamin B. Wallace, Dr. Jacob Viner, 
and Dr. Stanley K. Hornbeck. In addition, assistance was rendered 
in the preparation of the report by Mr. P. T. Kitchens, Dr, Percy 
Bidwell, Mr„ Gilbert Hirsch, Mr. Walter E. Myer, and Miss Violet 
Bacon Foster. 

Ill 



CONTENTS. 

Page. 

Chapter I. Introduction and summary 1 

II. Colonial tariff policy of Belgium 80 

III. Colonial tariff policy of France 129 

IV. Colonial tariff policy of Germany 22(6 

Appendix to Chapter IV. Present status of former German 

colonies and of other mandated territories 265 

V. Colonial tariff policy of Great Britain in the Crown colonies- 279 

VI. Colonial tariff policy of Italy 372 

VII. Colonial tariff policy of Japan 425 

VIII. Colonial tariff policy of The Netherlands 4.50 

IX. Colonial tariff policy of Portugal 478 

X. Colonial tariff policy of Spain \ 529 

XL Colonial tariff policy of the United States 571 

XII. Growth of preference in the British Empire, to 1914 630 

XIII. The preferential policy in Canada 659 

XIV. The preferential policy in Newfoundland 727 

XV. Preferential tariffs in South Africa 737 

XVI. Preferential tariffs in New Zealand 763 

XVII. Preferential tariffs in Australia 779 

XVIII. Preference in Great Britain since 1914 810 

Index 837 

IV 



Chapter I. 

INTRODUCTION AND SUMMARY. 



CONTENTS. 



I. Development or the pkesent colonial empiees : Theee periods . Page. 

First period 1 

Second period 2 

Third period 3 

Table 1 — Areas and populations of tlie colonial empires 5 

II. Classification and characteeization of " colonies " and mandated 

territories 5 

Spheres of iufluence 6 

Protectorates T 

Doubtful use of term " colonial " , 8 

Assimilation to the mother country 9 

Self-governing Dominions , 10 

Territories held under mandate of the League of Nations 10 

III. Geographical and economic division of colonies — Effect on 

TARIFFS 13 

Characteristics of colonial trade 14 

IV. Importance of colonial trade^ with special reference to the 

United States 16 

Table 2— Trade of the world, 1903 and 1913 17 

Table 3 — Importance of the colonial trade to the motlier 

countries 19 

Trade of the United States with the colonies of the world 19 

Table 4 — Average annual values of manufactured articles ex- 
ported and of raw materials imported, excluding foodstuffs, 

since 1870 20 

Table 5 — Trade of the United States with the colonies of the 

world. 1900. 1913, and 1920 21 

Table 6 — Summary of the trade between the United States and 

-'■ the world's colonies, 1900, 1913, and 1920 22 

Table 7 — Imports into the United States of principal articles 
of which more than one-half of the world's supply is de- 
rived from colonies 25 

Y. Treaties and other international arrangements imposing limita- 
tions in regard to colonial tariffs : 

Open-door agreements and pledges 26 

Treaties limiting rates 28 

General commercial treaties 29 

VI. Features of colonial tariff policies — Summary : 

Political L 31 

Economic — 

Types of colonial tariff policies 32 

Policy of tariff assimilation 33 

Preferential tariff policy 34 

The " open-door " policy 35 

National policies and colonial tariffs 36 

Table 8 — Colonies classified according to import tarilf 

" system 36 

The Netherlands, Belgium, and Germany -^- 38 

Great Britain — Crown Colonies 38 

The self-governing Dominions 39 

Italy 40 

Spain 40 

Portugal 40 

France 41 

Japan 41 

United States 42 

Reasons for exceptions to national policies 42 

V 



VI CONTEITTS. 

Page. 
VII. Rates and peefesences in colonial import duties — Compabati\te 

SUMMAEY - .^ 43 

Methods of comparison 43 

Open-door colonies : Netlieriands, Belgian, German, most British 

Grown Colonies ^ 44 

Assimilated and preferential colonies of — 

United States and Japan 45 

France . 45 

Portugal _-. —^ - 46 

Spain .^ „ 46 

Italy__ 46 

British Crown Colonies— 47 

British Dominions . 47 

Absolute amount of preferences 48 

VIII. Rates and peseeeences in colonial expoet duties : 

Purposes 50 

Rates . 51 

Difterentials 51 

IX. Inteecolonial trade — Summary . 53 

Table 9 — Tabular view of British Empire preferences 54 

X. Treatment of colonial products in the home market' 55 

General observations __. 55 

Policies of the colonial powers 56 

XI. Peefeeential taeiffs in favor of national shipping 59 

XII. Discriminations in minor duties and in methods of valuation 

AND PAYMENT ; CONCEALED PREFERENCES SUMMARY 63 

Minor fees 65 

Valuation of merchandise 66 

Depreciated currencies and exchange rates 66 

Formalities . 69 

Concealed preferences . 69 

Administration of the regulations 70 

XIII. Effects of preferential tariffs 70 

XIV. Factors other than the tariff in colonial teadei ^ 72 

XV. The outlook in regard to preferential tariffs 78 



INTRODUCTION AND SUMMARY. 



I. Development of the Present Colonial Empires : Three Periods. 

That nearly one-half of the world's area now consists of colonies 
is due to a variety of economic and political forces. These forces have 
shown their influence neither continuously through modern history 
nor with equal effect upon different powers. Their influence was 
relatively ineffective during most of the nineteenth century and when 
the colonial movement began again about 1875 it excited but little 
interest on the part of the three powers which had been the first to 
enter the field of colonial enterprise, while powers which had pre- 
viously been either nonexistent or indifferent to colonial expansion 
now joined in the race. The salient features of this modern colonial 
history may be seen to fall into three periods. 

FIRST PERIOD. 

The modern period of colonial expansion began in the latter half 
of the fifteenth century, when the Portuguese pushed their explora- 
tions down the coast of Africa and around the Cape of Good Hope 
to India, while Spanish expeditions crossed the Atlantic and found 
the continents of America blocking the westward route to the Spice 
Islands of the East. The Pope declared the unconquered portions 
of the world divided between Portugal and Spain, Before the 
period of its union with Spain (1580-1640) Portugal was the political 
equal and the commercial superior of England, During that period 
the Dutch, even while fighting to free themselves from Spain, ven- 
tured boldly and with striking success onto the high seas; and by 
1630 they possessed one-half of the world's merchant marine. Seek- 
ing colonies as a means of trade, they took from the Portuguese most 
of the Spice Islands, including Ceylon. By the end of the century 
they had settlements in Guiana and the Cape of Good Hope. 

Somewhat tardy in their entry, France and Great Britian profited 
by the pioneering of other nations and overcame the handicap of a 
late start by the vigor and effectiveness of their commercial and set- 
tlement activities. To them, in the second half of the seventeenth 
century, the Dutch lost much of the carrying trade. ^ The eighteenth 
century foimd France and Great Britian the leading colonial rivals. 
Between 1756 and 1815 Great Britian took from France, Canada, 
India, and various minor colonies, and from Holland practically all 
of her colonies (but the Spice Islands were later restored). In the 
same period Great Britian lost thirteen American colonies and 

1 This was the consequeBce much more of the enforcement of French and English navi- 
gation acts than of the wars of the period. 



2 COLONIAL. TAEirr POLICIES. 

France sold the Louisiana Territory, all that remained of her North 
American colonies.^ A little later Brazil declared its independence 
of Portugal, and virtually all ^ of South and of Central America es- 
stablished its independence of Spain. This left Great Britain the 
foremost of colonial powers.* 

Throughout this early period, colonial riA'alry was dominated by 
the theories and practices of mercantilism and monopoly. Although 
there was some settlement colonization in America and at the Cape, 
the chief object of early colonial ^enterprise was the acquisition of 
treasure in the form of precious metals ; and where these were 
not obtainable spices, silks, sugar, or slaves were taken for the pur- 
pose of securing money b}^ exchange. The- African and Asiatic 
" colonies " were mere trading stations, and even the English con- 
quests in India amounted simply to the occupa^tion of areas tribu- 
tary to and required for the strategic safeguarding of the ports. 
With certain exceptions, chiefly at the beginning and at the end of 
the period, monopolies were the order of the day. If the state 
did not keep the trade in its own hands (as in the case of Portugal), 
it granted monopolies to chartered companies or, later, excluded from 
the trade all but its own nationals. The principle of monopoi}^ ap- 
plied to all phases of the colonial trade : To the colony as a market, 
to the colony as a source of raw materials or commercial luxuries, 
and to the carrying trade between colony and mother country. The 
monopol}' was fortified not by differential tariffs, but by absolute 
prohibitions, sanctioned sometimes by even a death penalty, and it 
was relaxed only gradually, mainly bj^ the conclusion of commercial 
treaties. 

SECOND PERIOD. 

The six decades from the end of the Napoleonic Wars to about 
1875 form a second period in colonial history. Then, as a conse- 
quence of various influences — such as the successful revolt of tlie 
Americas, the liberal and humanitarian concepts of the philosophy 
of the French Revolution, the doctrines of Adam Smith and his 
successors, the decrease in the relative importance of colonial trade, 
and the great expansion of markets for the manufactured products 
of Europe resulting from the industrial revolution— the colonial 
powers loosened, in different degrees and with unequal promptitude, 
their restrictions on colonial trade. At the same time and in some- 

- Except some relatively UDimportant islands. 
^"^ Except tiie Guianas and British Honduras. 

- At tliat time some of the British colonial acquisitions were commonly regarded as of 
slight value. At the end of the eighteenth century England would gladly have traded 
Canada fo)' Guadeloupe and Martinique. Colonial trade was relatively more important 
then than now. but estimated by modem standards its total was insignificant. Of the 
8.280 vessels which constituted the English merchant marine in 1701, it is estimated 
that the whole number could not have carried on long voyages as much merchandise in a 
year as can a single large modern steamship. V^oyages to the East Indies frequently 
occupied more than a year. It is estimated that in the early years of the reign of Charles 
II, the total exports of J2>ngland averaged a little over £2,000,000 per annum, and that a 
century later it amounted to only £16,000,000. The hea.vy costs of transportation limited 
the trade to valuable commodities, such as spices, sugar, silks, and woolens. The various 
parts of Europe were practically self-sufficient, with the exception of a few seaports and 
the industrial centers, such as those of Holland, closely connected with them. The same 
was true of continental America and India. The West Indies, however, were devoted to 
sugar raising, of which they had practically a monopoly, and they imported a large pro- 
portion of what they consumed ; their trade, both in exports and' imports, was therefore 
more important than was that of the larger colonies on the neighboring mainland. Inci- 
dentally it may be noted that as a rule the foreign trade of a small area or a small 
population is greater per capita than is that of a similar but larger unit, which has 
almost invariably more diversified resources nnd a greater division of labor, (See Mar- 
shall, Aifi'eci : Trade and Industry, especially pp. 2.5"'and 38.), 



INTRODUCTION AND SUMMARY. 3 

what the same measure, the general interest m colonies declined. 
The idea of " barren sovereignty " aroused no enthusiasm, and in 
many quarters it was felt that the expenses of colonization were 
certain and burdensome while the profits, if any, were both uncertain 
and, since the ultimate destiny of colonies was independence, tran- 
sient. The free-trade movement scored its greatest victory in Great 
Britain,^ and there the anticolonial movement developed its greatest 
strength ; but among the other colonial powers, with the exception of 
France, indifference and inaction prevailed. In France, Louis 
Philippe and the government of the Second Empire went ahead with 
active colonial policies, witli little reference to public opinion. Under 
Louis Philippe (1830-1848) France acquired Algeria and various 
islands of Oceania. Napoleon III (1852-1870) directed the acquisi- 
tion of Cochin-China, Cambodia, and New Caledonia, extended the 
French hold on western Equatorial Africa, and made some treaties 
with the natives of Madagascar. He also backed the unsuccessful 
adventure of Maximilian in Mexico. The British, frequently in con- 
flict with Africans and Indians, extended their sway somewhat in 
South and West Africa and on a considerable scale in India, in spite 
of resolutions of Parliament and of the directors of the East India 
Company.^ During this period. Great Britain conceded " respon- 
sible " self-government to the settlement colonies, restored the native 
government of Mysore, acknowledged the independence of the Trans- 
vaal, gave away the Ionian Islands, and in a number of cases refused 
petitions for protectorates or disowned annexations made by sub- 
ordinates, both in Africa and in Oceania, including Hawaii. 

THIRD PERIOD. 

The third period of the mxodern colonial movement began after the 
middle of the nineteenth century, when the further development of 
industries and large scale production forced a keener competition for 
markets for manufactured goods. The Liberalism of the preceding ] 
period now yielded to the insistent demands of nationalism. The 
new nationalism expressed itself not only in the consolidation of the 
German and of the Italian states and of the Canadian provinces and 
in the disintegration of Turkey in Europe, but in the protective 
tariffs of the 'seventies and 'eighties, and, after the explorers had 
penetrated " darkest Africa," in the new phase of colonial expan- 
sion which has continued to the present day. After 1877, the area 
of the British holdings in Asia, Africa, and Oceania ^ increased four- 
fold f France acquired all but a quarter of a million out of the total 
4,000,000 square miles of her colonial empire;^ Germany, Italy, 
Belgium, Japan, and the United States acquired all of their colonial 
possessions.^ 

Most of the colonial acquisitions in this third period were at the 
expense of rather primitive governments in Africa and Oceania or 

5 See Chapter XII, pp. 632 tL 

6 Two-fifths of India still consists' of " Native States." 

■^ Oceania is used in this report to include the islands of the Pacific oast of Ceylon and 
south of the Philippines and Hawaii, except Australia and New Zealand. 

^ The figures are for the colonial empires as they existed before the war. 

9 Alaska was purchased by the United States in 1867. For the purchase of Assab in 
1869 by Italian interests, see p. 373. 



4 coloistlalL taeiff policies. 

■ ■ A 

of better organized states in Asia ; but to a small extent the growtK j 

of certain empires represents only the change of title as between, 
colonial powers. The United States acquired the Philippine Islands,! 
the Canal Zone, and the Danish West Indies by purchase, and.; 
Hawaii ^° and American Samoa (including Tutuila) by amicable 
agreement with the existing governments. 

" Protection," in theory and in practice, may be regarded both as a ; 
cause and as an effect of nationalism. New emphasis upon both waS' 
in no small measure contributor^^ to the new movement in colonial 
expansion. To acquire a colony was to stake out a prospective pre- 
serve for national trade and to prevent exclusion from the area in 
jmiestion as a possible consequence of some other nation's taking it, 
I Colonial trade became again an object of exploitation; but to insure 
the advantages earlier sought through prohibitions and monopolies 
there was now substituted the differential tariff. As early as 1877 
i Portugal increased the slight differential duties already in force in 
some of her colonies. Italy, with the acquisition of her first colony, 
adopted the use of differential duties. France, in the years between 
1885 and 1892, " assimilated " ^^ most of her colonial tariffs. Japan 
and the United States adopted the principle .of preference or as- 
similation.^- The self-governing Dominions first increased their 
protective tariffs and then introduced preferential features. 

l^ot all countries and not all colonies, however, followed the new 
trend. Great Britain and Holland adhered to the free-trade prin- 
ciples of the preceding period, both at home and in their dependent 
colonies, Germany maintained an open-door regime in all the regions 
which she acquired. In theory, at least, Leopold of ^Belgium did 
likewise in the Congo Free State. The exceptions were thus consid-.^ 
erable in number, but some of them were of the type that " prove the 
rule." Bismarck, a protectionist, but without interest in colonies, 
embarked on colonial enterprise in deference, apparently, only to 
public opinion. One of -his motives in proceeding to the annexation 
/"of a million square miles of territory was undoubtedly to prevent 
I the erection of protective tariff barriers by other nations around 
I those regions. In this his policy was well in accord with that of 
Great Britain, and Germany and Great Britain were able to impose 
a free-trade policy in regard to the whole of Central Africa. Leo- 
pold acquired control in the Congo only on condition that a free- 
trade regime be maintained there. In other places, too, the keenness 
of colonial rivalrj^ was kept within bounds by agreements that the 
powers which acquired new territories would not institute discrimi- 
natory trade regulations. 

These agreements will be discussed under the heading "Treaties 
and Colonial Tariffs " ; they are mentioned here because the evidences 

i<5 Technically Hawaii was annexed by joint resolution, but the terms of the resolution 
embodied the text of a treaty which the United States Senate had failed to ratify. The 
chief cases, in this period, of transfer of sovereignty among the colonial powers were the 
sale or cession by Spain of most of her colonies. Various regions over which various 
powers had previously claimed more or less effe(itive suzeraintv became in this period 
colonies : The Transvaal, taken by Great Britain ; Morocco, Tunis, Tripoli, Cyprus and 
Egypt, los.t by Turkey to Prance, Italy, and Great Britain : outlying regions, lost by Siam, 
taken by France and Great Britain ; Korea,, Formosa, and Indo-China, lost by China and 
acquired by Japan and France : Karafuto, lost by Russia to .Japan. The lease of the 
Liaotung Peninsula, and other titles and privileges in South Manchuria which China had 
accorded to Russia, were transferred to Japan ; and Germany, France, and Great Britain 
acquired territorial leases on the coast of China. 

" See chapter on Colonial Tariff Policy of France, p. 143. 

^=' For the delay in the application of the principle to the Philippines, Formosa, and 
Korea, see pp. 588, 439, and 442. 







73 




I 

i;i'^ ISLANDS 



EXCLUDIN 

o 



^' 




/?0 



H 



r 






A 



1 i: 



185766—22. (To face page 4^ 




ASIA 

EXCLUDING MALAY ARCH 



1 -— - J- 



185766—22. (To face page 4J 



INTEODUCTIOlvT AND SUMMARY. 



of the efforts which were made in certain cases to assure the main- 
tenance of an open door are proof of the importance at that time 
attached by some countries to differential tariffs. 

Table 1. — Areas and populations of tJie colonial empires} 



Cotmtiies, 



Areas. 



Square miles. 



Mother 
country. 



Posses- 
sions. 



Percentage 
of world's 

total 
colonial 

area. 



Ratio: 

Mother 

country to 

colonies. 



United Kingdom 

France. „ , 

Germany 

Portugal , 

Belgium 

Netherlands 

Italy 

Spain 4 

United States 

Japan 

Totals 



121, 

3 912 

208' 

35, 

11, 

12, 

110, 

191, 

3,624, 

148, 



687, 361 
089, 897 
134, 193 
804, 552 
909, 600 
781. 592 
591, 200 
134, 760 
119, 333 
113, 482 



59.38 

19.14 

5.31 

3.77 

4.25 

3.66 

2.77 

.63 

.56 

.53 



1 to 104.3 
1 to 19.2. 
1 to 5.4. 
1 to 22.6- 
1 to 80. 
1 to 62.1. 
1 to 5.3. 
1.4 to 1. 
30.4 to 1. 
1.3 to 1. 



4,678,013 



21,365,970 



100. 00 



1 to 4.6. 



Countries. 



Populations. 



Mother 
country. 



Possessions 



Percentage 

of worid*'s 

total colonial 

population. 



Ratio: 

Mother 

country to 

colonies. 



United Kingdom 

France 

Germany 

Portugal 

Belgium 

Netherlands 

Italy.... 

Spain ^ , 

United States 

Japan 

Totals... 



46, 406, 000 
3 41, 476, 000 

64,926,000 
5, 958, 000 
7,842,000 
6, 779. 000 

36, 740, 000 

20, 720, COO 
105, 709, 000 

55.961,000 



393, 
56, 
12, 

8, 
7, 
48, 
1, 
1, 

11, 

21, 



327,000 
092, 000 
287, 000 
735, 000 
000, 000 
102, 000 
750, 000 
305, 000 
719, 000 
814, 000 



9.98 
2.19 

1.55 
1.25 
8,56 
.33 
,24 
2. OS 
3.88 



1 to 8.5. 
1 to 1.4. 
5.3 to 1. 
1 to 1.5. 
1.1 to 1. 
1 to 7.1. 
21 to 1. 
15.9 to 1. 
9.0 to 1. 
2.6 to 1. 



392, 317, 000 



562,161,000 



100. 00 



1 to 1.4. 



^In making this and other comparative tables from which only broad comparisons are to be made, time 
has not been speni, in an etiort to obtain figures which are exactly comparable — e. g., population figure 
of the same year or figures of area uniform in tiieir inclusion or exclusion of water suriaces. Of coui'se, 
neither the area nor the population of these empires is any accurate measure of their value: the two largest 
probably contain the greatest proportion of deserts, vnth. the exception of the unimportant Snanish and 
Itahan Emphes. 

2 France mcludes Alsace-Lorraine: the other areas are the prewar areas. 

3 The popiiiation figures for France, Germany, and Portugal are those of 1910-1911; otherwise recent 
figures or estimates have been used. 

^The area and population ol the Canary Islands is here included with the Spanish colonies. 

"The total areas and populations of the colonial empires may be compared with those of the rest of the 
world: 22,600,000 square miles with perhaps 700,000,000 inhabitants. Latm-America has an area of 8,284,000 
square miles with 88,000,000 inhabitants; Siberia, 6,294,000 square miles, with 29,000,000 inhabitants; and 
China, 3,914,000 square miles, with about 320,000,000 mhabitants. 

II. Classification and Characterization or "Colonies" and 
Mandated Territories. 



Tht word " colony " is used broadly to include a great variety of 
dependencies, some of which would/ if the word were employed in 
a strict sense, be excluded. This report is a study of the colonial 
tariff policies of the colony -holding powers; for present purposes, 



6 COLONIAL TARIFF POLICIES. 

it suffices to distinguish comparative degrees of political dependency. 
The first and most important distinction to be established is that 
between those dependencies which determine their own tariff policies 
and those whose tariff policies are dictated wholly or in the main by 
the "mother'' countries. This adduces at once two groups, on the 
one hand the British self-governing Dominions, on the other hand all 
other colonies. 

The subtle ana constantly changing political relations of the 
world's territorial divisions defy simple or hard and fast definition 
and classification. There are three types of international relation- 
ship in reference to which the applicability of the designation 
" colony," or even of the designation " dependenc}^ " may be disputed. 
There are tAvo types of dependenc}^ whose approximation to inde- 
pendence renders the application to them of the term colony doubt- 
ful. And there is a type whose close assimilation to the mother 
country makes questionable an attempt to classify them separately. 

Further there have emerged from the war " mandated " territories 
which must be classed, for the present at least, as dependencies, but 
which are clearly not in any strict sense " colonies " of the mandatory 
powers; if colonies at all they are colonies rather of the League of 
K'ations. 

Before taking up the doubtful cases of the use of the term " colo- 
nies," it will be well to define protectorates and spheres of influence. 

Spheves of Infiuence. — The least clearl}^ marked of " dependent " 
relationships is that of the " sphere of interest " or " sphere of in- 
fluence." These terms have somewhat different connotations when 
used in respect to regions in Asia on the one hand and to regions in 
Africa and Oceania on the other hand, in general,. a sphere of in* 
fluence is a region wherein a given power claims — frequently but not 
exclusively by reason of " peaceful penetration " — to have a pre- 
dominant interest which entitles it to any special economic or politi- 
cal rights which may be accorded or obtained therein. This claim 
may be tacitly or more or less explicitly recognized by other powers. 
An explicit recognition is usually embodied in a bilateral agreement, 
by which two powers define certain territories and each agrees to 
seek no special rights in the region thereb}^ resigned to the economic 
activity or the political aspirations of the other. In Asia. " spheres 
of interest " have been staked out within the territories of established 
independent states, such as China, Siam, and Persia; and their 
creation has usually had no other immediate effect than progress to- 
ward monopolization of railway, mining, and other concessions by 
nationals of a power whose " sphere " is recognized. In Africa south 
of the Sahara and in Oceania, where the native peoples have only 
primitive political organizations and where the existence of " govern- 
ments" has scarcely or not at ail been recognized by the European 
states, the recognition by the other colonj^-seeking powers of a sphere 
of interest in a given territory has been practically equivalent to the 
creation of a title deed. B}^ agreements among the powers, in the 
years between 1880 and 1900, nearly all parts of Africa and Oceania 
not previously occupied were divided among the colony-holding 
states. As a rule, bases for occupation or conquest of the territory 
had been established antecedently, and frequently treaties had been 
made with the local chieftains ; but the use of the term "sphere of 
interest" or "sphere of influence" indicates that actual possession 



INTBODUCTION AND SUMMARY, 7 

had not been established. The degree to which control has since been 
made effective is of minor concern. These territories in Africa and 
Oceania have long since come to be regarded as protectorates if not 
as colonies, and their ports of entry are controlled by Europeans. 
Accordingly they are dealt with in this report ; but the "spheres of 
interest " in Asia are excluded. 

Frotectorates,~~\]i\dQT prevailing modern usage a " protectorate," in 
the stricter sense, is a state, otherwise theoretically independent, whose 
foreign affairs have been placed by treaty under the control of some 
other state, but whose administration and laws remain w^holly or in 
considerable part free from outside interference ; or, in looser usage, 
it is a colony in which the administration is carried on through native 
rulers and in accordance with native law but with more or less super- 
vision by " advisers " or " residents " representing the protecting 
power. The " self-governing colonies " do not fall within this defini- 
tion because they have never been independent states and their 
relations to the mother country are not defined by treaty ;^^ other- 
wise their status is closeh^ similar to that of the least dependent pro- 
tectorates.^* The important difference between the two is that they 
have been moving in opposite directions, protectorates tending 
toward loss of control over domestic affairs and reduction to colonial 
status, and self-governing colonies proceeding toward practical if not 
legal independence. The essence of the relationship between a pro- 
tectorate and the protecting power lies in the latter's control of 
foreign affairs; but, especially if the native government is not solvent 
or does not preserve order, responsibility for financial and foreign 
affairs compels interference with internal administration. The gen- 
eral tendency is for the protecting power to impose progressively 
more and more of its methods and institutions. 

' The protectorates found in North Africa and Asia, such as Tunis 
and Morocco and the states of the Malay Peninsula and Indo-China, 
have special treaty relations with their protectors ; they have greater 
likelihood of retaining a measure of independence in their internal 
adjninistration than have the so-called protectorates of Central 
Africa, where the native states were not recognized by other powers 
and have been recognized by the acquiring country chiefly because 
the establishing of a series of protectorates was a convenient method 
of gaining control or establishing order without violent opposition.^^ 
But such territories or states do not constitute true protectorates; 
the37^ are not dependent or quasi-dependent states carrying on foreign 

13 Tjip Transvaal and Orange Free State were independent, but their present self-govern- 
ment does not rest upon a treaty basis. 

^* The difference between a colony and a protectorate is logically expressed in the con- 
trol of the former by the colonial oflice and regulation of affairs of the latter by the 
foreign office, as in France and Great Bi'itain. Relations with a protectorate in the 
stricter sense are diplomatic lather than constitutional. The tendency is for the pro- 
tecting power to exercise increasing authority within a protectorate and to transfer its 
control from the foreign office to the colonial. Consequently there has been a great de- 
crease in the number of British protectorates under the supervision of the foreign office. 
Since about 1905 Somaliland, Uganda, Nyasaland, and the East African protectorates 
have been transferred to tlie colonial office, and only Egypt, Sarawak, and the territory 
of British North Borneo remain under the foreign office. The French protectorates of 
Annam, Laos,, Tonquin, and Cambodia, which, with the colony of Cochin-China, compose 
French Indo-China, are under the colonial office ; while Tunis and Morocco are under the 
foreign office. 

'^^ In some cases native chieftains have voluntarily placed their territoriesi under Euro- 
pean protection. Some writers iiave made maich sport over " the strange and generous 
passion for giving away of kingdoms" exhibited by native rulere. (Woolf, Leonard: 
Empire and Commerce in Africa, 1920, p. 135.) In many cases these rulers signed docu- 
ments which they did not comprehend, but in other cases the advantages and disadvan- 
tages of the act had been weighed. Consider the case of Hawaii, and compare the rise of 
the feudal system in Europe. 



8 COLO:^IAL TAEIFF POLICIES. 

relations through representatives of the protecting power; the;/ are 
rather units of local government, having no foreign relations of any 
kind ; they have not granted to their protectors a limited right of 
supervision; their protectors, on the contrary^ have permitted them, 
to continue, in varying degrees, the native forms of administration. 
The self-government v^hich the United States permits to Indian 
tribes is comparable to this. Parts of Java and of the Philippines 
are so governed. Until 1915, indeed, the Sultanate of Sulu might 
even have been classed as a protectorate. Further, the term " pro- 
tectorate " may be simply an official misnomer ; for instance, all of 
the German colonies were officially designated protectorates (Schutz- 
gebiete), and throughout a large part of the " Nyasaland Protector- 
ate " no native government had been recognized. 

The numerous regions ordinarily listed as protectorates are in- 
cluded in this study, as a rule without inquiry as to the exact degree 
of control wliich the protecting power exercises and without investi- 
gation as to whether the protecting power fixes the tariff rates by 
treaty right or by exercise of political pressure. Many of the Native 
States of India maintain their own tariffs ; and it may be that else- 
where, in Sarawak and Brunei, for instance, the British Government 
has not exercised the determining influence in tariff matters. It can 
scarcely be doubted, however, that, if these dependent governments 
had wished to grant special favors to third countries, means would 
have been found to prevent their doing so. In Indo- China, the Fed- 
erated Malay States, and Tunis, existing tariff provisions indicate 
plainly the exercise of more or less complete control by the protect- 
ing country^ 

With protectorates may be included territories administered by 
chartered companies; in the latter as in the former, international 
responsibility and, in the last analysis, all final authority lies with the 
mother country. 

DOUBTFUL USE OF TEEM " COLONIAL." 

Certain '^ protectorates " constitute the first of the doubtful cases 
in connection with the use of the term " colony." As a state which 
was previously independent ^^ falls more and more under the control of 
another state, there is frequently a diff'erence of opinion as to the time 
at which it may be properly designated as a protectorate or colony. 
Thus, Egypt was popularly regarded as a British " colony " before 
1914, when it was not officially even a protectorate and when many 
works (e. g., the Statesman's Year-Book) classifi.ed it as part of the 
Turkish rather than of the British Empire. Before 1920 the Ameer 
of Afghanistan was subsidized by the British Government and was 
bound by treaty to carry on foreign relations only through British 
agencies, and Eussia had recognized this arrangement; but the 
British were pledged not to interfere in the internal affairs of 
Afghanistan and it was frequently classed as an independent country. 
Many writers, especially European publicists, have designated Cuba, 
and sometimes the Dominican Kepublic, Haiti, Liberia, Panama, and 
Nicaragua as protectorates of the United States. But, inasmuch as 

16 Or owed a aominal aUegiance to some state which was too weak to exercise real 
control. Such was Turkey's suzerainty over Egypt, Tunis, and Morocco, and China's 
over Korea. 



INTRODUCTION AND SUMMARY. 9 

the I'nited States has no control over the foreign affairs of Cuba ex- 
cept in relation to certain subjects and on the basis of a veto power, 
and as the right to interfere in Cuba's internal affairs is contingently 
limited and likely to be exercised rarely, if ever, and as the tariff 
favors given and received reciprocally between the two countries were 
solicited by Cuba and were negotiated, not dictated, such classifica- 
tion seems unwarranted/^ A discussion of the classification of 
doubtful cases does not lie within the scope of this report; only 
Egypt, of the countries mentioned, has been included in the account 
of tariff policies. 

Assimilation to the mother country.— AX the other extreme, diffi- 
culty is encountered in determining at what moment a territory in 
process of assimilation to the mother country should be said no longer 
to be a colony. Various criteria may be suggested for this determina- 
tion : The constitutional or legislative affirmation that the territory 
is incorporated with the mother country ; uniformity of civil and po- 
litical rights and of governmental organization and fiscal system; 
and lastly, public opinion and the usage of writers upon the subject. 
These criteria are all defective; the first is formal and may be con- 
tradicted by the others ; and the second, if entire uniformity be in- 
sisted upon, is too rigid, since it includes territories which are not 
colonies. Ireland, after a century of incorporation in the United 
Kingdom, has laws and a fiscal system not altogether uniform with 
those of Great Britain ; tlie Isle of Man and the two Channel Islands, 
Jersey and Guernsey, have tariffs, revenues, and debts separate from 
those of the United Kingdom, and to them the laws of Parliament 
do not apply except by specific provision; yet these islands are not 
classed as colonies. Algeria, likewise, has been formally declared a 
part of France ; ^'^ French laws extend to it, unless a special excep- 
tion is made ; and it is administered in many respects as a part of 
France ; yet the mass of its population is dealt with as f oreign,^^ its 
finances are separate and even its tariff is not absolutely uniform 
with that of France, and French writers give it a prominent place 
in discussing the French colonies. If uniformity of political rights 
and fiscal arrangements be not insisted upon further than representa- 
tion in the national legislature, and approximate uniformity of tar- 
iffs, then some of the more distant French possessions (e. g. Guade- 
loupe and Keunion) are parts of France rather than colonies. 

The possessions of the United States which have a " territorial '^ 
status, now only Alaska and Hawaii, are not usually regarded in the 
United States as " colonies," though they have only " Delegates " in 
Congress and are ultimately subject to Congress in the exercise of the 
rights of local government which have been granted to them, and 
/they have no guaranty that they will ever attain statehood. The 
^population of Hawaii is alien to the extent of 88 per cent: geo- 
|graphicail5% racially, and legally Algeria seems more entitled than 
/Hawaii to be considered an integral part of the country which 
governs it. Porto Kico is politically less closely related to the United 

^" The treaty and commercial relations betn^een Cuba and thei United States have already 
been described and accounted for in the United States Tariff Commission's report on 
" Reciprocity and Commercial Treaties" (Government Printing Office, 50 cents), and that 
subjfi^ct will not be discussed here. 

IS Compare the Portuguese colonies, which are officially styled " Overseas Provinces." 
^® Or was until February, 1919, when about half a million natives were given the 
franchise. 



10 COLONIAL TAEIFF POLICIES. 

States than is Hawaii, never havincr been designated a " territoiy." ^o 
If comparison be made between Porto Rico and the French " as- 
similated " colonies, the latter, with their representation in the 
French legislature, would seem to have become more really than the 
former a part of the mother country. 

Omitting further discussion, Algeria, Madeira, and Azores are 
included in this studj^, while Corsica, the Isle of Man and the Chan- 
nel Islands, Alaska, and Hawaii receive no attention. 

Self-governing Dominions. — In a class by themselves must be 
placed those Dominions which, without having declared their inde- 
pendence, have asserted the right to rank as independent for certain 
purposes, such as representation and participation in the League of 
Xations. The British self-governing Dominions, and they alone, con- 
stitute this class. 2^ Fiscal autonomy enabled these Dominions for 
many years to maintain protective tariffs which were in conflict both 
with what is generall}^ regarded as the economic interest and with 
the general tariff' polic}^ of the mother country. Even the f referen- 
tial tariff of Canada was, at the time when it was established, con- 
trary to the polic}^ of Great Britain as shown in the dependent colo- 
nies. However, these Dominions are still technically classed as colo- 
nies, and their tariff' policies are dealt with in Part II of this report. 

It is unwise to attempt an arbitrary or a hard and fast classi- 
fication of dependencies. Official classifications are frequently out 
of date or euphemistic in arrangement. Treaties declarative of the 
protectorate relationship frequently emphasize the sovereignty of 
the weaker state at the moment when that sovereignty is being in- 
fringed by the stronger. Radical writers, inveighing against the 
acquisitive greed of the powers, f requenth^ employ the term " colony " 
or " protectorate " on flimsy grounds and in an attitude of gloomy 
prophec3^ For the purposes of this stud3^ subtle distinctions are 
unnecessary and special attention need not be given to justification 
of individual inclusions and exclusions. 

TERRITORIES HELD UNDER MANDATE OF THE LEAGUE OF NATIONS. 

The territories held under the mandate of the League of Nations 
are clearly not " colonies " of the mandatory powers within any 
strict use of the term " colony." No single nation holds title to any 
of these territories, and the Mandatory Power administers, or assists 
the inhabitants to administer, a mandated territory in accordance 
with the principles embodied in the Covenant of the League of Nations 
and under the supervision of that league. The central idea is not 
possession but the administration of a trust. In view, however, of 
the inclusive sense in which the word colony is popularly used and 
the intimate connection between mandated territories of class C 
and the mandatories, it has been considered warrantable to include 
in this study some reference to mandated territories and their tariffs. 

By article 119 of the treaty of peace " Germany renounces in favor 
of the Principal Allied and Associated Powers all her rights and titles 

20 The Porto Ricans were made American citizens in 1917. But so long- as the Porto 
Rican does not acquire a residence in some State or travel abroad this new status has 
little practical effect. 

"1 India can not yet be put in this class in spite of representation in the League or 
Nations and of increasing powers of self-government. The promised " independence " of 
Egypt may bring- her into this class rather than that of sovereign states. 



IISrTEODUCTION AND SUMMARY. 11 

over her overseas possessions." ^2 The title to these territories, there- 
fore, is vested in these powers and not in the League of Nations,^^ and 
these powers represented by their Supreme Council (Council of 
Four) allocated the mandates and ratified the division of Togo and 
Kamerun previously agreed upon by France and Great Britain, and 
of German East Africa agreed upon by Great Britain and Belgium. 
Article 22 of the Covenant of the League of Nations, which forms 
an integral part of the peace treaty, provides for the administration 
of the former German colonies and of the Asiatic territories which 
were taken from Turkey. This article reads as follows : 

Akt. 22. To those colonies and territories which as a consequence of the late 
war have ceased to be under the sovereignty of the States which formerly gov- 
erned them and which are inhabited by peoples not yet able to stand by them- 
selves under the strenuous conditions of the modern world, there should be 
applied the principle that the well-being and development of such peoples form 
a sacred trust of civilization and that securities for the performance of this 
trust should be embodied in this covenant. 

The best method of giving practical effect to this principle is that the tute- 
lage of such peoples should be entrusted to advanced nations who by reason 
of their resources, their experience or their geographical position can best un- 
dertake this responsibility, and who are willing to accept it, and that this tute- 
lage should be exercised by them as mandatories on behalf of the league. 

The character of the mandate must differ according to the stage of the de- 
velopment of the people, the geographical situation of the territory, its eco- 
nomic conditions, and other similar circumstances. 

[Class A.] Certain communities formerly belonging to the Turkish Empire 
have reached a stage of development where their existence as independent na- 
tions can be provisionally recognized, subject to the rendering of administra- 
tive advice and assistance by a mandatory until such time as they are able to 
stand alone. The wishes of these communities must be a principal considera- 
tion in the selection of the mandatory. 

[Glass B.] Other peoples, especially those of Central Africa, are at such a 
stage that the mandatory must be responsible for the administration of the 
territory under conditions which will guarantee freedom of conscience and re- 
ligion, subject only to the maintenance of public order and morals, the prohibi- 
tion of abuses such as the slave trade, the arms traffic and the liquor traffic, 
and the prevention of the establishment of fortifications or military and naval 
bases and of military training of the natives for other than police purposes and 
the defense of territory, and will also secure equal opportunities for the trade 
and commerce of other members of the league. 

[Class C] There are territories, such as Southwest Africa and certain of the 
South Pacific Islands, which, owing to the sparseness of their population, or 
their small size, or their remoteness from, the centers of civilization, or their 
geographical contiguity to the territory of the mandatory, and other circum- 
stances, can be best administered under the laws of the mandatory as integral 
portions of its territory, subject to the safeguards above mentioned in the in- 
terests of the indigenous population. 

In every case of mandate, the mandatory shall render to the Council an annual 
report in reference to the territory committed to its charge. 

The degree of authority, control, or administration to be exercised by the 
mandatory shall, if not previously agreed upon by the members of the League, 
be explicitly defined in each case by the Council. 

A permanent commission shall be constituted to receive and examine the 
annual reports of the mandatories and to advise the Council on all matters 
relating to the observance of the mandates. 

Attention may be specially directed to three points: First, the 
principle is clearly recognized in article 22 that the mandated ter- 

22 The treaty with Turkey contains a similar provision relating to Turkish territories 
in Asia but omitting reference to Associated Powers. 

23 See the appendix to Chapter IV, p. 266. 

185766°— 22 2 



12 COLONIAL TAEIFF POLICIES, 

ritories are to be administerecl primarily in the interests of the resi- 
dent populations, and that the mandatories are trustees rather than 
possessors of the territory. Second, the mandated territories are di- 
vided into three classes, subject to separate, and in some respects 
very different, provisions. While the treaty does not define the ter- 
ritories belonging- to each class, they may be tabulated as follows : 

MANDATORIES AND MANDATED TEERITORIES. 

Class A. Class B. Class C, 

Great Brita,in : Great Britain : Great Britain : 

Mesopotamia. ^ Tanganyika.^ Nauru.^ 

Palestine. ' Part of Togo.^ Australia : * 

France: F r a ct i onof Kam- New Guinea.' 

Syria. erun.^ New Zealand : - 

Belgium : Western Samoa. 

Ruanda and Urundi.^ South Africa : * 
France: South-West Africa. 

Kamerun.^ Japan : '^ 
Togo.^ Caroline, Marianna. 

and Marshall 
Islands. 

1 Formerly German East Africa, wliicli included also Ruanda and Urundi. 

2 As arigiiially announced the mandate was to be lield by the British Empire. The 
mandate as issued is to His Britannic Majesty, but the Governmeats of Great Britain, 
Australia,, and New Zealand have reached a tentative agreement for the division of the 
phosphates taken from Nauru. 

3 For the division of Central African territories, see the appendix to Chapter IV, p. 267. 
^ The mandates are " conferred upon His Britannic Majesty to be exercised in his 

behalf " by the governments of the Commonwealth of Australia, the Dominion of New 
Zealand, a'nd the Union of South Africa. 

5 The former German colony of New Guinea, excluding NauiTi and the islands north of 
the Equator. The territoiy includes Kaiser Wilhelmsland, the Bismarck Archipelago, 
and lesser islands. 

*5 The status of Yap, which is part of the Caroline group, remains -unsettled. 

j Only in territories of class B does article 22 explicitly require the 
maintenance of the open door, and even in this case the benefit is 
1 guaranteed only to other members of the league. In mandated ter- 
1 ritories of class C the open door is not required by article 22, and 
i the mandates already approved for this class m.akes no provision 
I for it. In fact differential duties have been introduced in South- 
Y/est Africa and Samoa, and by discriminations of other kinds 
Australia has effectively monopolized the trade of the territory en- 
trusted to her control.^* On the other hand the drafts of the man- 
dates for class A embody provisions for the maintenance of the 
open door for the benefit of members of the League of Nations. The 
exclusion of other states from the terms of the mandates has not so 
far resulted in any policies of discrimination against such states. 
Third, the last two paragraphs of article 22 contemplate that the 
members of the league, presumably acting through the assembly 
of the league, will define the terms of the m^andates and will organize 
the permanent supervisory commission ; but the assembly has so far 
taken no action upon the terms of the mandates, and those which 
have been approved have been approved by the council of the 
ieagTie. The council has also determined that the permanent com- 
mission shall be composed of nine members, including a majority 
from states which are not m.andatory powers. 

^ For further discussion of these points, see the appendix to Chapter IV, pp. 275-278. 



INTEODUGTIOIs]" AND SUMMARY, 13 

III. Geographical, and Economic Division of Colonies — Effect on 

Tariffs. 

The political division into " dependent " colonies and " self-gov- 
erning " colonies corresponds in general to the geographical division 
into tropical colonies and nontropical colonies and to the economic 
classification into plantation and settlement colonies. The latter are 
those in v^hich white men can live permanently ; in them the tendency 
toward economic and industrial development similar to that of 
European states and toward self-government or independence is 
distinctly greater than in the tropical colonies. The British self- 
governing Dominions afford the chief examples.^^ 

Tropical colonies, except for liinited areas of high plateaus, are 
plantation colonies and with them may be associated various colonies 
at the border of the Tropics, or even in the Temperate Zone, in which 
nationals of the colonizing country can not settle in large numbers 
since a comparatively dense population was already in occupation 
of the territory when it became a colony. Malta, Egypt, and Korea 
are examples of nontropical and well-populated colonies. These 
nonsettlement colonies are sometimes subdivided into plantation and 
exploitation colonies. Since the practice of the enslavement of the 
natives and the seizure of the lands tilled by them has been aban- 
doned, agricultural plantations can predominate only -^^ in the less 
thickly populated territories— chiefly tropical Africa, Oceania, 
Guiana, but also in parts of India, Ceylon, the Malay Peninsula, 
Inclo-China, Java, and the Philippine Islands. Outside of Asia 
plantation colonies usually suffer from a shortage of labor, and their 
development has been attained by varying degrees of oppression of 
the natives, from slavery up.-'^ Nonsettlement colonies are, as a 
whole, characterized by commercial, agricultural, and industrial de- 
velopment, in succession and then simultaneously, by the capital and 
under the direction of nationals of the governing states. If the land 
is already well occupied, agriculture is left to the native population 
except for scientific experimentation and education,^^ and the na- 
tionals of the colonizing power engage in a supervisory capacity in 
government, transportation, engineering, mining, and, to some extent, 
manufacturing. 

These nonsettlement colonies, especially those properly called plan- 
tation colonies in the stricter sense, frequently produce conspicuously 
only one or two products, and they all export principally raw ma- 
terials, most of which do not compete with products of the temperate 

25 Other regions previously of the same type have gained their independence — the United 
States and the States of South America. Compare the development taking place more 
slowly in India, Indo-China, and northern Africa. 

26 Ib the West Indies many plantations continue from slavery days and there is room 
for others. 

^' See pp. 75 and 279 for the number of Asiatics who have migrated or been imported 
into Malaya, Oceania, and Africa, Compare recent discussions of forced labor in British 
Bast Africa and the well-known criticisms of tlie labor policies pursued in the Congo Free 
State, German Kamerun, and Fortuguese Sao Thome. Some colonies — for inslance, the 
Gold Coast and Nigeria — are now showing how rapid may be the development of a tropical 
colony if the natives be given proper encouragement as proprietors rather than as peons 
or day laborers. 

28 Before the war it seemed likely that the natural indigo of India would be driven 
from the market by synthetic Indigo. Recent experiments are said to have shown that 
the product per acre can be increased fivefold and that, aided by greater increase of 
costs in Europe, natural indigo need not fear the competition of the synthetic product. 
A criticism has been made that the colonizing powers neglect the products for native 
consumption and devote their experiments unduly to cotton, rubber, cocoa, and other 
articles of international commerce. 



14 coLo:sriAL tariff policies. 

zones. Even in tlie case of India, raw materials still constitute two- 
thirds of the exports, after a considerable decrease in the proportion 
during the war. In these colonies the whites import practically 
everything that they consume, including foodstuffs. The natives, 
according to their numbers and the degree of their civilization, im- 
port quantities of sugar, liquorSj kerosene, and a certain range of 
other goods, particularly cotton textiles. These colonies therefore 
offer markets of considerable value to the industrial nations. As 
they are almost without industries of their own,^^ if they have pro- 
tective tariff's, these are devised for the purpose of according a mar- 
ket for the industries of the mother country ; but even then, as the 
rates imposed are practically never higher \han those of the tariff 
of the mother country, and as the differential is not always equal to 
the full amount of the rate, and as foreign countries are usually at 
less disadvantage in making contact with the market of the colony 
than in invading the market of the mother country, the protective 
itariff is not in the colony so great a barrier to trade as it is in the 
mother country. For instance, an identical rate of duty in the 
Philippines and in the United States constitutes, as an obstacle to 
Japanese trade, a lower barrier in the former than in the latter. 
Where these colonies have tariffs for revenue only, or merely m.od- 
erate rates of duty such as prevail in the Italian colonies, the char- 
acteristic tariff is one of ad valorem rates, say 10 per cent, on all im- 
ports not specially exempted as necessary to"^ the developm.ent of the 
colom^, with higher specific rates on alcohol, beverages, and tobacco 
and a limited number of other articles; it contains also usually ex- 
port duties, occasioned by the need of revenue in comparatively poor 
and undeveloped countries and by the fact that the system of mono- 
culture makes the collection of an export duty an easy and equitable 
substitute for taxes on land or on the natives direct. 

CHARACTERISTICS OF COLONIAL TRADE. 

The significance and danger of national control of the world's raw 
materials was revealed hj the war. These raw ma.terials predomi- 
nate in the export trade of the colonies. Upon the colonies the world 
is wholh/ dependent for certain materials, notably jute and copra, 
and largely dependent for many products, animal, vegetable, and 
minerEil. Such are tea, cocoa, vanilla, spices, cinchona, camphor, and 
numerous oil-producing seeds and nuts; rubber, hemp, and kapok; 
wool, ivory, ostrich feathers, shellac, and goatskins; diamonds, 
graphite, tin, manganese, m-ica, asbestos, and phosphates. By enu- 
merating special kinds and qualities of articles the lists might be 
extended almost indefinitely. Thus, though the United States pro- 
duces two -thirds of the world's cotton, tire manufacturers and others 
imported 400,000 bales of Egyptian cotton in 1920. 

The colonies, especially the minor colonies, are not self-sufficient. 
They produce a few staple articles rather than a variety. Therefore 
what they produce they must export, and what they consume they 

^ It is not possible to include in the text tlie exceptions to and the qnaliflcations of 
the generalizations which it is necessary to make in speaking of great groups of colonies. 
The "most important exception to the statement that the nonsettlement colonies are almost 
without industries is that India possesses many large modern factories (see p. 327). The 
outstanding points in regard to the agriculture, industries, and commerce of the various 
colonies are given in the chapters on the Colonial Tariff Policies of the different powers. 



IliJ^TEODUCTIOJ^ AND SUMMARY. 15 

must import.^^ In a few cases, however, the distinction between pro- 
duction and exportable surplus is important. India rivals Cuba as a 
sugar producer, yet she imports more than she exports. Though 
China produces most of the world's rice, three-fourths of the quan- 
tity which passes in international trade is provided by Burma and 
French Indo-China. Of w^ool exports over one-half comes from the 
British Dominions. In considering the possible monopolization by a 
certain power or powers of the world's supply of a given article, not 
only the present exportable surplus but the total production and the 
potential production must be considered. If a given country pro- 
duces one-half of the wool which it consumes and none of the rubber, 
and if this country finds itself confronted by a monopoly of the ex- 
portable surplus of these two articles, its position in respect of the 
two is obviously different. 

The import trade of the colonies is characterized by the great pre- 
dominance of manufactured articles. Foodstuffs, beverages, and to- 
bacco play an important part in the trade, but perhaps on the whole 
not m.ore important than in Europe ; but while Great Britain, for ex- 
ample, imports raw m.aterials to a value twice as great as that of the 
manufactured articles imported, in the colonies, even including the 
Dominions, the proportions are more than reversed. In the Domin- 
ions and to a lesser extent in India and some of the other colonies, 
manufactures are developing; but except for the Dominions and 
India the comparatively small size of the colonies, together with other 
factors, render it highly probable that their industrial development 
will be slow and restricted to a few lines. The colonies are therefore 
more dependable markets for the disposal of manufactures than are 
independent countries. 

The export trade of different colonies of the same power in the 
same part of the world is often quite different, as may be seen in the 
British West Indies or in British West Af rica ; ^^ the import trade, 
on the other hand, in its larger features, is simdlar in all the colonies. 
Textiles (cheaper cottons, made-up clothing, sacks), machinery and 
tools, prepared and preserved foodstuffs (dr}^ fish, canned meats, 
sugar, condensed milk), liquor and tobacco, salt, kerosene, coal 
(chiefly for bunker purposes), matches, soap, glassware, sheet iron, 
cement, leather goods, and chemical products are the principal classes 
of the trade. In detail the differences are naturally very great. In 
colonies where there are no whites except a few officers, merchants, 
and missionaries, the native demand determines the character of the 
trade and this demand may not at first extend beyond cotton piece 
goods, liquors, salt, and brass rods or other trinkets ; but in the North 
African and Asiatic colonies the native demand may include almost 
as wide a range of articles as in the colonies settled by whites. The 
design and quality of textiles and the variety of machinery and im- 
plements used may vary completely from one colony to the next— 

"<* " Constime " is. of course, used in the general sense and not as applied to foodstuffs 
alone. The statement in the text is true' in its most unqualified form of the smaller 
plantation colonies, but even in the Gold Coast, for instance, whei-e there are no Euro- 
pean plantations, the natives are coming to depend upon imported foodstuffs. Various 
colonial governments, e. g., of the Philippines, Straits Settlements, and British Guiana, 
have taken special ms^asures to insure a food supply. For tlie predominance of one or 
several products in the export trade of the colonies, see p. 317 on the British West Indies 
and the various tables which give the chief products exported from the rhilippines. Porto 
Rico, Egypt,, Ceylon, Java, British West Africa, and the Congo. 

31 See pp. 317 and 308. 



16 colojStial tariff policies. 

for instance, sugar mills, Kaffir hoes, automobile trucks, gold dredges, 
barbed wire, and sheep shears are all in demand in colonial markets, 
but not necessarily in the same colony. Pottery making, tanning, and 
wood working are practiced universally, but different parts of the 
colonial market import quantities of earthenware, leather, and worked 
wood. In Tunis, however, raw hides are an important article of 
imqyort^ and from some colonies there is an export trade in leather, 
pottery, textiles, and other articles which are generall}^ more charac- 
teristic of the import trade. 

TV. Impoktaxce of Coloxial Trade, with Especial Eeferexce to 

THE UNITED States. 

From the point of view of trade, the colonies may be divided 
roughly into three groups. The British self-governing Dominions 
located in the temperate regions,^- with energetic and highly intelli- 
gent populations and already comparatively well advanced in indus- 
tries, may be put into the first group. They have a high per capita 
trade ^^ and their total trade constitutes more than one-third of the 
total trade of all colonies combined. A second group may be formed 
of the major colonies of Asia and of Xorth Africa, of which by far 
the most important are India, Java, and Egypt. ^* These lie for the 
most part in or near the Tropical Zone, and their populations, large in 
number and dense in distribution, consist mainly of hard-working 
natives, a fair proportion of whom are skilled craftsmen. Perhaps 
on the whole less richly endowed in natural resources, lacking ma- 
chinery, and not having developed large scale organization, these 
colonies, thanks to the mass and the industry of their populations, 
maintain a trade which is in some cases as great as that of the self- 
governing British Dominions. The total trade of these major Xorth 
African and Asiatic colonies, extending from Morocco to Korea ^^ 
likewise exceeded in 1913 a third of the total colonial trade. 

In a third class m.ay be grouped all mxinor colonies. Of these only 
a few, comparatively small in area, lie outside the tropics. ^^ Their 
populations are not large and are as a rule inferior in productive ca- 
pacity. Except for some whose unimportance is due to their insignifi- 
cant area, they are in the primitive s*t ages of agTicultural development 
and have achieved little in the way of mining or manufacturing. 
They have not developed adequate s^^stems of communication. Em- 
bracing most of Africa, and scattered in various seas, particularly 
the western Pacific, their total trade, though they number four score 
and include comparatively^ advanced regions such as Nigeria, is less 
than that of the four Dominions. However, the undoubted possi- 
bilities of the vast areas included, when adequate communication 

32 Xorthern Australia extends into the Tropic?. 

33 Canada's trade in 1919-20 was $273 per capita. South Africa's per capita trade is 
much smaller than that of the others, due partly to the presence of the large black popula- 
tion. Per capita ti'ade is not neeessarih/ an index of prosperity ; an increase in popula- 
tion may he accompanied by greater diversification of industries, a closer approach to 
self-sufficiency, and a decline in the per capita foreign trade. 

^ The others are Morocco. Algeria, Ceylon, Indo-China, the Philippines, Formosa, and 
Korea. The total trade of these colonies in 1913 ran from Algeria's $2-50,000,000 to 
Morocco's $48,000,000. If the classification be made merely on the basis of trade (1918) 
Porto Rico and Dairen must be classed with these major colonies. 

35 1. e., those named in the text and note above, but not including Porto P.ico, Dairen, 
Hongkong, the Malay States, and the Straits Settlements. 

36 British : Gibraltar, Malta, Cyprus, Bahrein Islands, Weihaiwei, Bermuda, and Falk- 
land Islands. French : Tunis, and St. Pierre and Miquelon. Italian : Libia and Rhodes. 
Spanish : Canary Islands, Madagascar, Mozambique, and Formosa lie partly in the Tem- 
perate Zone. 



INTRODUCTIOlSr A^D SUMMAEY. 



17 



shall have been provided and the labor problems have been solved, 
give these colonies a high potential value. Table 2 gives an indica- 
tion of the relative commercial importance ^^ of the mother countries^ 
colonies, and other regions of the world in a normal prewar year. 

Table 2.— Trade of the ivorld,^ 1903 and 1913. 
[Values in millions of dollars.] 



Countries. 



1903 



1913 



Tnerease. 



Amount. 



Per cent. 



COLONIAL POWERS. 



Great Britain 

'Canada. 

Australia 

South Africa 

New Zealand 

India 

Egypt , 

other possessions 

Total Crown Colonies and India. 

Total British possessions 

France 

Algeria 

Indo-China 

Tunis 

French Morocco 

other possessions 

Total French possessions 

Netherlands 

Dutch East Indies 

Dutch West Indies 

Total Dutch possessions 

United States 

PhiUppines 

Porto Rico 

Total United States possessions. 



Japan. 



Formosa and Korea . . . . 

Dairen 

Portugal 

Portuguese possessions. 
Germany 

German possessions 

Spain . 



Spanish possessions . 
Belgian , 

Belgian Congo , 

Italy... ^ 



Eritrea and Somalia — 
Libia , 

other European countries ». 

Turkey. 

China 



Nontropical South America . 



TROPICAL COUNTRIES. 



Brazil 

other South America ^ 

Cuba. 

Mexico 

Central America 

Persia, Siam, and Liberia. 



Colonial powers 

British Dominions 

All of the colonies 

Total colonies 

Total colonial empires 

other nontropical countries . 

other tropical countries 

World total 11 



4, 394 

2 473 
419 
395 
135 

2 1, 017 

182 

463 

1,662 

3,084 

1,747 

122 

70 

30 

11 

83 

316 

1,094 

180 

6 

3 185 
2,418 

66 
29 
<96 
300 
35 

97 

87 

2,622 

«21 

364 

920 

6 13 

652 

3 

(?) 

2,981 

2 181 

355 

535 



301 

110 

163 

■1103 

48 
85 



15, 209 
1, 422 
2,418 
3, 841 

19, 050 

4,031 

992 

23, 892 



6,830 

2 1, 130 

770 

553 

220 

2 1, 662 

299 

1,443 

3,404 

6,078 

2,969 

246 

r6 

62 

43 

153 

629 

2,814 

422 

10 

432 

4,224 

107 

80 

4 193 

678 

113 

56 

134 

131 

4,967 

6 111 

433 

48 

1,692 

6 25 

1, 185 

15 

8 

4, 980 

2 298 

721 

1,269 



684 
277 
305 
4 223 
101 
167 



25, 927 
2,674 
5, 164 
7, 838 

33. 764 
7,268 
2,055 

42, 789 



2,436 

657 

3 352 

158 

85 

645 

117 

980 

1, 742 

2,994 

1,222 

124 

56 

32 

32 

69 

313 

1,120 

3 243 

4 

3 246 

1, 806 

41 

57 

4 98 

378 

78 



38 
•44 
2,345 
90 
69 



772 


84 


12 


89 


533 


82 


12 


482 



2, 019 
117 
366 
734 



383 
167 
141 

4 120 

52 
82 



10, 717 

1, 252 

10 2, 629 

10 3. 881 

14, 714 

3,237 

1,062 

18, 896 



iThe trade statistics relating to the different countries and colonies can be compared only in a general 
way. They differ in accuracy, in methods of valuation, and in the exclusion or inclusion of Government 
supplies, bulhon and specie, and transit trade. The percentages of increase are more directly comparable. 



18 



COLOXIAL TAEIFF POLICIES. 



It will be seen from the figures that the total external trade of 
the colonies in 1913 was Tf billions of dollars, out of the world total 
of nearh" 43 billions. The colonies other than the self-governing 
Dominions contributed 5^ billions. The absolute amount of colo- 
nial trade is therefore considerable, and there are three points lend- 
ing sjDecial importance to it. First, the trade of the colonies has been 
growing at a mxore rapid rate (percentage) than that of other coun- 
tries. The total colonial trade was, in 1903, 16.1 per cent and, in 
1913, 18.3 per cent of the world total. The colonies other than the 
Dominions increased their share of the total from 10.1 to 12.1 per 
cent. In no case did the trade of a mother country increase as 
rapidly as that of its colonies.^^ The Dominions had a more rapid 
commercial development than did other temperate countries, and the 

but the statistical •methods of some of the colonies may have been changed ^^ithin the decade. The flgures 
for the British possessions other than Egypt include bullion and specie. The Dominions produce and 
export gold and silver, while India is a large importer of treasure; but the movement of specie into and 
from Egypt roughly balances, and, as it is an unusually large item (see p. 302), it has been omitted. In- 
clusion In the Indian figures of Government stores and treasm-e, whose values were practically the same 
in 1903 and 1913, and of reexports and overland trade, which increased less than 50 per cent ta the decade, 
considerably reduces the percentage of gi-owi;h for Indian trade. The sea-borne trade of merchandise 
imported for private account, and of exports, the produce of India, increased by 82 per cent in the decade 
before the war. 

2 Years ended March 31, 1904 and 1914. 

3 Throughout the table the totals and the amounts and percentages of increase have been obtained from 
figures carried to the nearest thousand instead of to the nearest million. Reducing or raising the figures 
to the nearest million introduces slight discrepancies in some of the final digits of the totals and in some of 
the percentages. The figures of the table may be compared with the following figures for the Dutch 
Colonies, carried to the nearest thousand: 



1903 



Increase . 



1913 



Amount. 



Per cent. 



Dutch East Indies ■ 179, 897 

Dutch West Indies j 5, 590 

Total Dutch nossessions , ' 185, 487 



422, 457 
9.506 



242, 560 
3,916 



134.83 
70. Of} 



431, 963 



246, 476 



132. 88 



4 Including Guam and Samoa, whose total in both vears was less than half a million: 19D3, 3275,000; 1913, 
S389, 000; per cent of increase, 41.5 

° Dairen was not a Japanese colony in 1903 and trade figures were not published until the latter part of 
1907. 

6 1902 and 1912. 
^ Figures unavailable. 

8 Not an Italian colony until_1912. 

^' Bulgaria, Abyssinia, and Haiti are omitted. For Colombia, the Dominican Republic, Liberia, and 
Montenegro, figures for other years than 1903 and 1913 have been used. 

10 These figures are, or are based on, the totals of amoimts in the third column and not the diflerences 
between the totals of' the first two columns, i. e., they show. the increase only for those colonies for which 
figures are available for both years, and not the increase due to territorial acquisitions. 

11 The world total is the sam of the totals for the various countries; but as the same transaction is recorded 
in one country as export trade and in another country as import trade, evidently the world total thus 
arrived at shows approximately twice the value of the goods which actually cross national frontiers. 

37 It is not meant to imply that the relative trade importance of colonies can be examined definitively 
on the ba«is merely of figures of gross trade, even disregarding the statistical difficulties encountered in 
making comparisons between trade returns compiled in different countries and by varying methods. The 
gross values of the trade of two colonies may be the same in amount and yet the trade of the two be utterly 
different in importance estimated by any other standard. For instance, among the criteria of impor- 
tance are: Percentage of profit; possibilities of growth; the degree to which the products involved sup- 
ply ''key" industries; the proportion in v\-hich, if any, the products constitute natural nionopohes. Sta- 
tistics taken from a number of difierent countries may not have been compiled on the same basis as to 
values or valuations, may not possess the same degrees of accuracy, and may vary as to the grouping of 
items and the inclusion or exclusion of coin and biillion, government stores, and transit trade. 

as This rapidity of growth reflects the newness of many of the colonies, the extension of their railways, 
the estabhshment of plantations, and the smallness of the trade upon which the percentage is based. The 
rate of progress in comparison with older countries must therefore decrease, but it is probable that the trade 
of the colonies will gain in relative importance through several decades. 



I^TTRODUCTION AND SUMMARY. 



19 



other colonies kept pace with the tropical regions of the world,^* 
Secondi}-, the imports of the colonies consist largely of manufac- 
tured articles, including prepared foodstuffs. While their trade is 
less than one-fifth of the total international trade, they offer a mar- 
ket for perhaps one-fourth of the manufactures exported by the 
industrial nations. Thirdly, in like manner, the colonies supply 
perhaps one-fourth of the raw materials which enter international 
trade. 

If tropical products alone be considered it appears that in 1913 
the trade of the tropical and subtropical colonies was twice that of 
the independent countries of the same latitudes.*^ A comparison of 
the areas and populations of the independent and colonial powers 
of the Tropics makes it seem probable that this predominance of the 
colonies in supplying the world with tropical products will continue. 

No figures have been collected to show the total trade of countries 
other than the United States with the world's colonies, but the rela- 
tive importance to each of the colonial powers of the trade with its 
own colonies is roughly indicated in Table 3, 

Table 3. — iNiportancc of the colonial trade to the mother countries, 

[Trade of each motlier country with its own colonies in 1913 expressed as a percentage 

of its total trade.^] 



Per cent. 

Great Britain 34 

Portugal 20 

Japan 16 

France 10 

Netherlands- 10 



Per cent. 



Spain 3 

United States 3 

Belgium 1 

Germany . 5 

Italy . 5 

^ The figures of the table are roughly comparable, but only roughly, for the use of per- 
centages does not avoid all the difficulties involved in comparing the trade figures of 
different countries. (See Bureau of Foreign and Domestic Commerce, Miscellaneous Series 
No. 59, Methods of Computing Values in Foreign Trade Statistics.) The figures have not 
been revised to insure uniform exclusion of government; stores and bullion. The figure for 
Japan rests partly upon an estimate and in some cases colonial figures have been used 
in comparison v.^ith those of the mother country. 

When preferential tariff rates are extended only to goods the product of the mother 
country (as distinguished from goods reexported from the mother country) figures for 
the origin of the goods are probably fairly accurate. Otherwise the figures are apt to 
include reexports of products of other origin. For instance, the more careful considera- 
tion of the source, after Australia introduced her preferential tariff in 1907, reduced the 
imports credited to Great Britain from 62 per cent to 52 per cent of the total. 

TRADE OF THE UNITE© STATES WITH THE COLONIES OF THE WOSLD. 



The interest of American manufacturers and merchants in the dif- 
ferential colonial tariffs has been growing rapidly. This is true 
both of the import and the export trade. The statistics already pre- 
sented showing the total value of colonial trade and the rapidity of 
its growth suggest the potential importance of colonial markets as 
an outlet for prepared foodstuffs and other manufactures, but their 
immediate significance for American trade is much decreased by the 
fact that so many of the colonies partially exclude it by differential 
import duties. More immediately to the point are the figures of 
Tables 4 to T which show (1) the extent, to which the development of 

^ The percentages shown in the table are 109 and 107. Though both figures are aver- 
ages, the degree of accuracy present in the figures is not sufficient to justify a statement 
that the relative growth of colonial trade was greater than that of the independent tropi- 
cal countries. 

*o Including Mexico and Brazil, but excluding China, 



20 



COLOIiriAL TAEIFF POLICIES. 



American industiy lias already made our manufacturers dependent 
upon foreign markets for tlie disposal of their products and upon 
foreign sources for their raw materials, (2) the growth of American 
exports to and imports from the leading colonies, and (3) the growtL 
in our total imports from all sources of the chief commodities of 
which the world derives more than half of its suj)plies from colonial 
sources. 

Even before the war intervened to stimulate the process, the United 
States had developed steadily as an exporter of manufactured articles 
and an importer of rav/ materials. Table 4 shows the increasing per- 
centage of raw materials in American imports since 1870,*^ 

Table 4. — Average annual values of manufactured articles exported and of raio 
materials imported, excluding foodstuffs, since 1870. 





ilanufactures exported. ^ 


Eaw materials imported. 


'- Fiscal years ended J une 30. 


Value. 


Per cent 
of total 
exports. 


Value. 


Per cent 
of total 
imports. 


1 g7o_i 879 


§107,884,000 
150,055,000 
241,221,000 
585,713,000 
995,831,000 
2,834,564,000 
3,497,787,000 


20. 35 
20.06 
25.29 
37.66 
46.74 
59.51 
4&.00 


§74,246,000 
132,740,000 
185, 513, 000 
357,425,000 
580, 339, 000 
966,035,000 
1,481,165,000 


14. iSO 


18-80-1889.., 

1890-1899 - 

1900-1909. 


19. 52 
24.50 
32.86 


1910-1914. . 


34.38 


1915-1918 - - - 


41.77 


1919-1921. 


37.06 







/ 



1 Manufactured articles exported include both manufactures ready for consumption and those for further 

use in manufacture, but the figures for raw materials imported do not include manufactures for further use 
in manufacture. This latter class increased from about 9.5 per cent in 1899-1903 to 19.27 per cent in 1913 and 
19.57 in 1919. During the war it fell as low as 14.17 and in 1920 it was 15.28. The figures through 1914 are 
taken from the Annual Report of the Chief of the Bm-eau of Foreign and Domestic Commerce, 1916, page 8. 
The other figures are compiled from Commerce and Navigation of the United States, 1917, and from the 
Monthly Summary of the Foreign Commerce of the United States. June, 1921. 

In bringing the table up to date, it has been arranged to show the 
abnormal rate of change during the war : but the period since the war 
has given no reason to expect that the steadj^ tendency of the preced- 
ing half century will be reversed. 

Table 5 shows the value of the trade of the United States with 
the various colonies of the world in the fiscal years 1900, 1913, and 
1920, The most important colonies are shown separately and the 
others are grouped in political divisions. Table 6 shows the same 
figures in a more condensed form and grouped by geographic rather 
than by political divisions. The tables show that in a period of 
twenty years there was a tenfold increase in the value of American 
imports from the world's colonies, as compared to total importations 
which gTew 6,2 times. The exports to colonies increased, accord- 
ing to these figures 8.8 times, while the value of total exports was 
increasing only 5.8 times. Table 6 brings out the importance of 
Canadian trade in the total, particularly that Canada has taken half 
or more of our total exports to ail colonies. As tropical products, 
however, have come to form a larger ]3ercentage of our total imports, 
the importance of Canada in supplying our raw materials has de- 



*i The figures exclude foodstuff-? whether raw or partly or wholly manufactured. The 
percentage of foodstuffs in American trade has considerably decreased. In 1870-79 food- 
stuffs constituted 39.41 per cent of exports and 37.03 per cent of imports. In 1910-14 
these pereenta,ges had decreased to 19.78 and 23.54 per cent, respectively. 



INTEODUCTIOM" AND SUMMAEY. 



21 



Table ^.— Trade of the United States with the colonies of the world,^ 1900, 1913, 

and 1920. 

[In thousands of dollars.] 



Colonies. 




1913 



U.S. 

exports 

to. 



1920 



U. S. 

imports 

from. 



V. S. 

exports 

to. 



Canada 

Newfoundland and Labrador 

Aastralia. 

New Zealand 

South Africa 

British India ^ 

Straits Settlements 

Ceylon, Malay States, Borneo, etc 

Egypt 

Hongkong 

Jamaica 

Trinidad and Tobago. 

Barbados 

Bahamas, Windward, Leeward Islands 

B ermuda 

British Honduras 

British Guiana 

British West Africa. 

British East Africa 

Aden, Malta, and Cyprus » 

Fiji, Solomon, Tonga, etc 



198 
3, 795 
With British South 
Africa 
1,553 1,666 

2,024 1 



Total British possessions. 



121, 230 



Porto Rico 

Philippines . . . 
Virgin Islands. 
Guam 



3,079 

5,971 

569 



Total U. S. possessions. 



9,619 



Algeria, Tunis, Senegal, etc 

Morocco 

Guadeloupe, Martinique, and Guiana ' 

French India 

French Oceania 

Madagascar 



657 

Nots 

135 



438 
4 



Total French possessions 



Dutch East Indies ^ 

Dutch Guiana and Curagao. 



1,234 



27, 887 
1,546 



Kwantung (Dairen). 
Korea 



162, 744 



4,640 

2,640 

625 



7,905 



601 
-n. 
2,236 



323 
10 



1,534 
1,076 



Not shown. 



Azores and Madeira islands. 
Portuguese Africa « 



Canary Islands and Spanish Africa '■ 

Belgian Congo 

German possessions i" 

Libia, Eritrea, and Somalia 



23 



127 



414 
802 



239 
Not shown. 

1 12 

11 174 2 13 



Grand total. 



161,750 178,244 



415,449 
4,889 

43,352 
9,079 

14,488 

11,040 

3,607 

462 

1,661 

10,431 
5,287 
3,120 
1,485 
2,920 
1,466 
1,466 
1,814 
3,311 
1,052 
2,088 
277 



537,377 

4,303 

56, 772 

18,301 

36,514 

178,952 

188,283 

38,405 

105,872 

36, 825 

6,673 

9,890 

2,701 

3,349 

1,498 

2,880 

2,907 

31,147 

3,053 

6,754 

4,484 



298, 305 



538, 744 



1,276,940 



40,539 
21,010 



33, 155 
25,385 

894 
76 



* 133, 208 

72,982 

1,550 

5 49 



61,597 



59,510 



207,769 



733 4,143 
Not shown.. 



167 



1,012 
'412 



2,127 

485 

834 

4 



3,098 
996 
191 
3,402 
3,304 
1.811 



7,593 



12,802 



6,222 
1,841 



722 



324 
377 



154 



1,472 
93 



3,152 
1,379 

489 
1,371 

238 

2,248 

1,292 

15 

1,229 

184 



95, 801 
5,233 

15,683 
241 



,282 
,014 

189 

176 

91 

217 



373,436 i 617,444 



1,619,438 



890, 135 

15, 138 

85,791 

33,762 

48, 703 

79, 143 

14, 875 

2,045 

27, 230 

22,512 

15,066 

9, 553 

3,832 

8,296 

3,651 

3,442 

5,423 

19,213 

2,377 

3,621 

929 



1,294,739 



4 90, 724 

69, 291 

2,377 

5 314 



162,706 



15, 459 
4,515 

8,836 

2,087 

1,382 

368 



32, 647 



45, 647 
4,592 

9,796 
3,172 

961 
5,546 

1,743 

1,661 

1,158 

431 



1,564,797 



1 Commerce and Navigation, 1900 and 1913. Monthly Summary of Foreign Commerce of the United 
States, Jmie, 1920. 

2 In 1900 exports to Tripoli (Libia) were included v/ith exports to Egypt. 

3 Malta and Cyprus contribute not over 20 per cent of the total. 

4 For 1913 and 1920 Porto Rican figures for exports to the United States and imports from the United 
States, respectively, have been used. 

5 Figures for 1919, as reported by the Governor of Guam. 

6 Including St. Pierre and Miquelon. French Guiana and St. Pierre and Miquelon supplied the greater 
part of the imports of 1900 and 1913 but less than on-fourth of the other items. 

^ The imports from the Dutch East Indies have fluctuated greatly between 1890 and 1913. The highest 
figure during that period was that for 1900 and the lowest that for 1913. The average imports of the three 
fiscal years 1897-1899 were 17,149,000; for 1901-1903, 16,669,000; and for the four years 1909-1912, 14,345,000. 

8 Including not over $4,000 in any year from or to Portuguese India. 

9 The Spanish possessions in Africa contribute less than 5 per cent of the totals. 

10 Omitting Kiaochow. Figui'es for the ex-German possessions in the Pacific are not separately recorded 
for 1920. Their trade with the United States in 1913 was one-sixth of the total American trade with German 
possessions. 

" This item is for Libia only, which was not an Italian colony in 1900. 



22 COLOlSriAL TAEIFF POLICIES, 

Table 6. — Summary of the trade hetifeen the VniteCi States and the VJorlWs 
colonies, 1900, 1913, and 1920. 

[In millions of dollars. i] 





1900 


1913 


Coioiiies. 


Imports. 


Exports. 


Imports. 


Exports. 




Value. 


Per 

cent of 
total. 


Value. 


Per 

cent cf 
total. 


Value. 


Per 

cent of 

1 total. 


Value. 


Per 
cent cf 
total. 


Canada. 


39.9 
6.5 


4.70 


8S. 9 
45.0 


6.38 
3.23 


120.6 

19.8 


; 6.65 
1 1.09 


415. 4 

71.8 


16.85 
2.91 


Total Dominions 

India 

Ceylon, Straits Settlements, Malay 
8oates. etc 

D'otch East Indies 




46. 4 


5.47 


133.9 


9.61 


140.4 


1 7.74 


487. 2 


19.76 


1;;:: 

1.3 


5.34 

3.28 
.15 


4.9 

1.5 
S.6 


If 67. 9 
.35 !<! 

[ 4^.3 
.11 6. 2 
.62 4. 7 


3.75 

2.66 
.34 
.26 


11.0 

4.1 
3.2 
12.3 


.44 

'. 13 


Hongkong, Dairen, and Korea 

Total Asiatic colonies,exclu- 
ding Philippine Islands. . . 

porypt 


.51 


74.6 


8.77 


15.0 


1.08 


127.1 


7.01 30.6 


1.24 


S.3 


.97 


1.1 


.08 


19.9 
.4 

1.4 
2.4 
16.8 
2.6 


1.10 1. 1.7 
.02 ! 3.3 
.04 i 4.1 

.OS 1.3 


.07 




.13 


F''encli Africa 


.7 

.4 

.2 

1S.0 

3.6 


.OS 
.05 
.03 
2.12 
.42 


.6 
.5 
1.5 

15.9 

_ 1. S 


.04 
.04 
.11 
1. 14 
.13 


.18 


Madagascar, French Lidia^ and 
Oceania 


.05 


It alian , G erman ,B elgian, Sp anish, 
and Pcrtuijsicse colonies. ......... 

British, French, and Dutch West 
Indies . . . 


.13 
.93 
.14 


5.2 

21.1 

3.4 


.21 
.85 


British East Africa, Malta, Aden, 
and British Oceania 


.14 






Total foreign colonies, ex- 
cluding Dominions 


105. 8 


12. 44 


36.4 


2.62 


171.3 


9.45 


70.7 


2.S7 


United States possessions 

Total all colonies 


9.6 
161.8 


1.13 
19.04 


7.9 
178.2 


.57 
12. 80 


61.6 
373. 3 


3. 40 59. 5 
20. 53 617. 4 


2.41 
25.04 






Total from all soui'ces 


849.9 


1,394.5 1 

1 


1,813.0 




2,465.9 












1920 


Colonies. 


Impo 


-ts. Expo 


rts. 


Value. 


Per 

cent of 
total. 


Value. 


Per 

cent of 
total. 




537. 4 
115. 9 


10.26 
2.21 


890. 1 
183.4 


10.' 97 


Other British Dominions 


2.26 














653. 3 


12.47 


1 073. 5 


13. 23 
















India 


179. j 
226.7 

52:7 


3. 41 79. 1 

4. 33 16. 9 
1. 83 45. 6 
1.01 ' 35.5 


.98 


Ceylon, Straits Settlements, Malay States, ( 
Dijtch East Indies 


^tc 






.21 








.56 


Hongkong, Dairen, and Korec 


.44 




ippine I 


lands... 






Total Asiatic colonies, excluding Phil 


554. 2 


10.58 177.1 


2.19 


Egypt 


105. 9 
31.1 
4.1 
S. 5 
5.0 
35. 3 
14.3 


2.02 i 27.2 
.59 1 19.2 


.34 


British West Africa 


.24 


French Africa 


.08 ! 
.16 
.09 
67 
.27 


20.0 
3.8 
11.5 
62.7 
6.9 


.25 


Madagascar, French India, and Oc 
Italian, German, Belgian, Spanish 
British, French, and Dutch West ] 
British East Africa, Malta, Aden, t 


oania... 








.05 


and Poi 
ndies.. 


tuguese 


colonies. 




.14 




.76 


md Briti 


sh Oceai 
unions 






.09 










Total foreign colonies, excluding Dorr 


758. 4 


14 46 I 


3''8. 4 


4.06 














United States possessions 




207.8 
1,619.5 


3,97 1 
30. 90 1 


162.7 
1,564.6 


2.01 


Total all colonies. 








19.30 
















Total from all soinces 


5, 238. 6 j 


8.111.0 

















1 The percentages were calculated from figures extending to the nearest thousand. 



INTEODUCTION AND SUMMARY. 23 

creased; and it may be noted also that Canada accounts for the whole 
decrease in the percentage of American exports to colonies in 1920 
as compared to 1913. 

American statistics are no exception to the rule that figures for 
the destination of exports and the origin of imports lack accuracy, 
especially in relation to the more distant and smaller colonies. This 
is due to the lack or inadequacy of means of direct consignment 
and transportation. . As trade grows, however, direct communication 
is established with a greater number of colonial ports and the trade 
is recorded with a greater approximation to completeness, according 
to its origin or destination. 

The degree of accuracy of the figures for imports from the colonies 
can be checked roughly by the figures for the total imports of those 
articles which are derived most largely from the colonies. Thus, 
selecting rubber, tin, Egyptian cotton, cocoa, and tea as articles pro- 
duced in distant colonies, it is found that the imports of these five 
articles from Europe and from Canada were valued in 1900, 1913, 
and 1920, respectively, at $23,000,000, $87,600,000, and $103,300,000; 
that is, these items, if they might be regarded as derived altogether 
from colonial sources, Avould add 14 per cent, 23 per cent, and 6.4 per 
cent, respectively, to the recorded totals of imports from colonial 
sources. These percentages are certainly not excessive, for though 
some parts of the importations of the articles nam_ed were doubtless 
derived from noncolonial sources, only a small number of the co- 
lonial products have been included in the computation. An exhaus- 
tive tabulation would probably show that our total trade with the 
colonies as recorded in Tables 5 and 6 should be increased by, say, 20, 
30, and 10 per cent, respectively, for the three years. These correc- 
tions magnify the importance of colonial trade, but reduce the rate 
of its growth since 1900. In like manner the figures for exports from 
the United States to colonial markets should be increased to account 
for the American manufactures reshipped from European and other 
entrepots to the colonies.*^ 

If the colonies of other powers be divided into three groups^ — the 
open-door colonies, the British Dominions, and the dependent col- 
onies enforcing discriminatory duties^" — it can be seen at once that 
the trade of the United States with either of the first two groups 
greatly exceeds that with its own colonies. The possibility of the 
growth of this trade is also much greater, for American merchants 
already have most of the trade of Porto Rico and the Philippine 
Islands, sO' that American trade with them can grow only as the 
total trade of these islands ^continues to develop ; but if American 
merchants continue to ha\^e approximately an equal chance in India, 
Egypt, the Straits Settlements, the Dutch East Indies, Morocco, and 
the minor open-door colonies, they ma}- well expect to expand their 
trade in a much higher ratio than that of the general development of 
the commerce of those countries. With the third group of colonies, 
which includes the British West Indies and most of the French, 

*2 On the other hand, corrections might be made in the figures to exclude goods imported 
into the United States for shipment to Canada, Canadian goods exported t>y way of the 
United States, and trade with independent countries through such colonial entrepots as 
Aden, Hongkong, and Dairen. In 1915 nearly 16 per cent of Canadian exports went 
through the United States, but in 1919 only 12 per cent. (Times l!rade Supplement, Apr. 
10, 1920, p. 84.) 

" See list on pp. 36-37. 



24 COLONIAL TARIFF POLICIES, 

Spanisli, Italian, and Japanese colonies, the amount of the present 
American trade is given in the available statistics** as much less 
than that with the American colonies. The published figures are, 
however, as already explained, incomplete and it is certain that the 
large territories and populations involved, if the great handicap on 
Amierican trade could be removed, would offer to it a greater market 
than the American colonies now afford or will be able to afford in the 
future. 

In comparing prewar and postwar values the great rise in prices 
must be constantly/ borne in mind. For this reason the percentages 
of Table 6, which show the development of our trade with the col- 
onies in relation to our total trade, are more significant than are the 
total values. For the same reason it is desirable to examine more 
closely the demand of the United States for typical colonial prod- 
ucts, since in dealing with commodities singly the quantities as well 
as the values may be compared. 

Table 7 shows the quantities and values of the imports into the 
United States in the fiscal years 1900, 1913, and 1920, of the princi- 
pal articles of which more than one-half of the world's supply is de- 
rived from colonial sources.*^ The table shows that the importation 
of these typical colonial products increased from 14.8 per cent of the 
total imports in 1900 to 19.6 per cent in 1913. and to 22.4 per cent 
in 1920. 

A comparison of the quantities imported shows that the demand 
for every article on the list was greater in 1913 than in 1900, and with 
four minor exceptions, greater in 1920 than in 1913.*^ In most cases 
the increases are very great. Taking those articles in the table whose 
weight is expressed in pounds and for which the weights are avail- 
able for all three years, the total quantity imported^is found to have 
increased, in millions of pounds, from 975 in 1900 to 1,505 in 1913, 
and to 2,945 in 1920 — that is, the importation of 1920 was three times 
as great as in 1900 and practically twice as great as in 1913. The 
value of the imports listed in Table 7 was three times as great in 
1920 as in 1913. In normal times this would be a striking increase, 
but in view of the doubling of the quantities imported and in view 
of the general rise of world prices the mere trebling of the total 
value of the articles listed undoubtedly minimizes the importance of 
colonial trade. The relatively small increase in value miay be seen 
from the table to be due to the great fall in the price of rubber *^ and 
to the relatively small increase in the price of certain other com.- 
modities. 

^The figures are not ^ven separately for Formosa and for some otlier colonies of this 
group, but it would appear that our total trade with these colonies was in 1919 about 
§85,000,000 and in 1920 about .$110,000,000, Including in the list of colonies Cyprus and 
those of the British West Indies whose adoption of a preferential tariff came after the 
end of the fiscal year 1920. 

^° In the case of wool alone an article has Ijeen included of which the colonies produce 
less than one-half of the world's production : they produce, however, considerably more 
than one-half of the wool which passes in international trade. 

^ The decreases are in coconut oil, manganese ore, graphite, and hemp. The decrease 
in coconut oil is much more than offset by the increase in copra ; the decrease in man- 
ganese ore was due to orersupplies on hand at the end of the war. 

*'^ The great fall in price was due to oyersupnly. caused by the rap-id development of 
plantations in Malaya. The planters allege that the present price is considerably less 
than the cost of production and they tried to arrange to curtail production for the current 
year (1921) by as much as 50 per 'cent. 



IITTRODUCTION AND SUMMARY. 



25 



Table 7. — Imports into the United States of principal articles of ichicli more 
than one-half of the world's supply is derived from colonies} 



[Values in millions (and tenths) of dollars and quantities in millions of pounds 


or other units.] 




Unit. 


1900 


1913 


1920 


Average values in 
cents per pound. 


Article. 


Quan- 
tity. 


Value. 


Quan- 
tity. 


Value, 


Quan- 
tity. 


Value. 


1900 


1913 


1920 


Rubb8r2 


Pounds . . . 

...do 

...do 

...do 

.. .do 

Tons 

Carats 

Pounds... 

...do....... 

Number... 

Founds . . . 

...do 

...do 

...do....... 

...do 

...do 

...do 

Tons 

Poimds . . . 

...do 

...do 

...do 

,..do 


49.4 
155. 9 
67.4 
82.0 
70. 2 
(a) 

(*>) 
41.7 

0.0 

10.6 
95.5 
38.8 
230.0 

(0 
1.8 

"\^ 

46.1 


31.4 
20.3 

8.0 
22.0 
19.1 
(a) 
11.8 

5.7 

0.0 

.6 

(c) 

10.6 

1.4 

7.2 

3.4 

4.0 

.3 

2.7 

.5 
{^) 
1.2 
2.3 


113. 4 
195.3 
121. 9 

96.3 
114.7 

(a) 

140.0 

40.9 

(&) 

50.5 

94.8 

21.9 

185.4 

58.4 

280.9 

184.6 

.4 

5.6 

3.7 

56.5 


90.2 
35.6 
23.0 
24.8 
53.1 
(0) 
39.6 
17.4 

2.0 
1.8 
4.2 

17.4 
3.0 

12.6 
5.7 
9.3 
1.8 
2.2 
.8 
1.0 
6.3 
2.6 
2.0 


632.4 
427.6 
345. 3 
127.0 
131.1 
.3 
.7 
420.3 

258.2 

89.2 

21.8 

98.3 

34.2 

172.4 

73.0 

172.9 

275.1 

.3 

35.9 

4.0 

.3 

1.1 

46.9 


274.2 

212.8 

156.9 

121.5 

73.6 

19.2 

89.0 

72.9 

21.4 

4.8 

2.3 

25.8 

22.2 

20.4 

13.3 

9.7 

8.1 

8.1 

5.9 

5.6 

2.5 

2.4 

2.3 


64.0 
13.0 
12.0 
27.0 
27.0 


79.0 
18.0 
18.0 
26.0 
46.0 




43.0 


Wool 

Long-staple cotton. . 

Goatskins 

Tin 

Tin ore 


50.0 
45.0 
98.0 
56.0 












13.0 


12.0 

5.0 


17.0 


Coconut products: 

Copra 

Coconuts 

Coconut oil 

Tea 

Shellac 

Manila (hemp)3 

Spices 

Jute, raw 3 

Asbestos^ 

Manganese ore 

Kapoks _ _ 


8.3 


"ii'o" 

13.0 
7.5 

8.S 
1.7 


8,3 
18.0 
14.0 
7.6 
9,7 
3. -3 
1.0 


10,0 
26.0 
65.0 
12.0 
18.0 
5.6 
2.9 


"27.' 6' 


14.0 
27.0 


16.0 


Camphor. 


139.0 


Vanilla beans 

Graphite 3 


472. 
5.1 


252.0 
3.5 


209.0 
5.0 


Total 




152.2 

1, 025. 7 

14.8 




356.2 

1, 813. 

19.6 




1, 174. 9 

5,238.6 

22.4 








Grand totaiimports, 












Per cent of grand 
total . 



















1 Commerce and Navigation, 1900 and 1913; Monthly Summary of Foreign Commerce of the United 
States, June, 1920. The figures are those of general imports for fiscal years ending June 30. In giving 
values per pound fractions of a cent have been omitted where the value exceeded 10 cents. 

^Including balata, guayuie gum, guttajoolatong, and gutta-percha, valued at $5,161,000 in 1920. 

3 To obtain figures from wliich five digits could be dropped and to facilitate comparisons, tons have 
been changed to pounds for the items indicated. 

o None imported. Tin ore was first smelted in the United States during the war (see p. 339). Note that 
these figures are for total imports, regardless of source. For instance, all the tin ore comes from Bolivia, 
as the most important colonial sources are closed to the United States. 

& Quantities not given in returns. 

c Included in other vegetable oils, fibers, or feathers. 

If a calculation be made of the value of the imports in 1920 on 
the basis of the prices of 1913, a figure of $856,000,000 is obtained as 
a total for the articles whose value per pound is given in the table 
for the two years, as compared with an actual value in 1920 of 
$1,051,000,000"^^— that is, the increase in the total due to the higher 
prices of 1920 is only 23 per cent, a percentage far below that of the 
rise of world prices generally — and it follows, therefore, that the 
increase in the percentage of the total merchandise imported from 
19.6 per cent in 1913 to 22.4 per cent in 1920 is not a full measure 
of the increased importance of these colonial products in the trade 
of the United States. 



*^ I. e., omitting tin ore. diamonds, coconuts, maaaganese ore, and ostrich feathers. 



26 COLOXIAi TAEIFF POLICIES. 

Y. TsEATiES AXD Other Ixterxational Arraxgemexts Imposing 
LiMiTA^Tioxs IX Regard to Coloxial Tariffs. 

The various international obligations which aifect or have in re- 
cent times affected the tariffs of colonies may be discussed in three 
groups according to their objects: 

(1) Ov&n-door treaties. — The so-called '^open-door" treaties and 
agreements guarantee equality of tariff treatment, and, generally, 
equality in other commercial matters, as betw^een nationals and for- 
eigners and between national and foreign products. They may be 
either treaties between two or three powers or general international 
treaties, and they may be either limited or unlimited in respect to 
time. The pledges may be unilateral, bilateral, or multilateral; 
and the treaties may be betv\'een two or several or a considerable 
number of states. ^\ith these may be associated unilateral pledges, 
• not in treaty form, to maintain the open door for certain periods of 
time in certain possessions. 

(2) Rate-livuting treoMes. — Certain treaties fix maximum, mini- 
mum, or uniform rates for the tariff's of two or more colonies or on 
one or more articles for a larger group of colonies. Vrith these may 
be discussed certain treaties which limit to fixed maxima the tariffs of 
certain more or less independent states. 

(3) C OTn/nieTcial treaties of ordinary types. — Commercial treaties 
or treaties of " commerce and navigation '' or of " friendship, com- 
merce, and navigation " are entered into generally by all the com- 
mercial powers. Before the war the}^ usually contained the most- 
favored-nation clause. These treaties, however, by no means always 
include the colonies, and vrhen the colonies are mentioned the same 
provisions do not always apply to them as to the mother countries; 
also, unless there is a special stipulation to that effect, the most-fav- 
orecl-nation clause does not apply to special relations between colonies 
and mother countries.*^ 

The most important treaties affecting the tariffs of colonies are as 
follows : 

OPEX-DOOR agreements AND PLEDGES. 

^j the general act of the Conference of Berlin (1885) the Eu- 
ropean powers established in Central Africa,'^^ '• the conventional 
basin of the Congo," in which there was to be freedom of navigation, 
freedom from transit duties and commercial equality generally. Ex- 
port duties were not restricted in amount, but import duties were 
prohibited.^^ A modification made in 1890 allowed a general import 
rate as high as 10 per cent ad valorem at the port of entry, and higher 
rates on alcohol and alcoholic beverages, to which in 1910 were added 
arms and munitions. The United States took a leading part at the 
conference, but did not ratify the treaty. A revision of this treaty 
(and of the Brussels treaties relating to the traffic in alcohol and 
arms) was contemplated in the framing of the treaties of peace by 

*3 For full discussion of most-faYored-nation clauses, see the Tariff Commission's report 
on Reciprociry and Commercial Treaties, pp. 389-510 ; see also Hornbeck, S. K. : The Most- 
Favored-Nation Clause in Commercial Ti-eaties, 1910. 

^ See map. 

s^ For further information concerning this treatj', see Chapter II, p. 85. 









\ Madeira Is Casabli 

(Port) 



(Sp) ^ y^uby . 
C Bojador/: / 

RiodeOrg^f^ O ; 

1/ AA^y 




Monrovia^ <^^,coAS 



AFRl 



WITH THE 




Fold-out Place 



This fold-out is being dig: 
will be inserted at a fu1 



INTRODUCTION^ AND SUMMARY. 27 

which Germany, Austria, and Turkey undertook to accept any such 
revisions which should be agreed upon by some or all of the powers. 
Such revisions were signed by several powers on September 10, 1919, 
but have not yet been ratified. The revision of the general act of 
Berlin provides for the continuance of the open door, but removes 
the limitation of ten per cent as a maximum rate of import duty. 
(See p. 121.) The act of the Algeciras Conference of 1906 and the 
later treaties in regard to Morocco not only provided for the open 
door in the French and Spanish spheres and in the international 
zone at Tangier, but prescribed also a new maximum tariff rate. 
These treaties are valid without limitation of time. 

Other treaties or less formal agreements pledging the open door, 
in wider or narrower terms,^^ have also been made without time lim- 
itations — notably the notes exchanged in 1885 between Great Britain 
and Germany relative to their colonies in the Gulf of Guinea (Kame- 
run, Togo, Nigeria, and the Gold Coast) ; the Anglo-German decla- 
rations of 1886 in regard to a great area of Oceania ; the notes relating 
to spheres of influence and territorial acquisition in China which 
were exchanged by the powers in 1899 at the instance of Secretary 
Hay; the Anglo-German- American treaty of December 2, 1899, di- 
viding the Samoan Islands; and the Anglo-French treaty of 1906 
for a condominium in the New Hebrides. The open door was thus 
pledged for the greater part of the new colonial acquisitions after 
1880, including all the German colonies except Southwest Africa. 
These pledges were given at the time of the acquisition of the terri- 
tory or very soon thereafter. ^^ 

Other open-door pledges have been made for a limited time. Thus 
the Anglo-French treaty of 1898-1899 guarantees for thirtj^ years the 
maintenance of an open door in Dahomey, the Ivory Coast, the Gold 
Coast, Nigeria, and all the territory south and east of Lake Chad 
to 5° north and to the Kiver Nile.^* The United States maintained 
the open door in the Philippine Islands in accordance with the treaty 
with Spain ^^ for ten years from the date of ratification (April 11, 
1899) ; and Japan likewise, after the annexation of Korea in 1910, 

52 TTiese bilateral agreements or exchanges of notes generally pledged the open door 
specifically only for the countries concerned, but Great Britain in some cases gratuitously 
made the pledge applicable to the commerce of other countries than the one with which 
the agreement was being made. In all eases, however, these pledges were followed by an 
open-door regime in which all countries participated regardless of whether or not their 
commercial treaties entitled them to most-favored-nation treatment in the colonies of the 
powers which were parties to open-door agreements. The status of these agreements, in 
so far as Germany was a party to them, is now in some doubt, since by the treaty of 
Versailles Germany has renounced all her rights under the Anglo-German-American treaty 
of 1899 relative to Samoa and has accepted a clause by which all her bilateral conven- 
tions with any of the allied and associated powers have lapsed except such as the said 
power gives notice of its desire to maintain. No notice has been given of the desire of 
France or Great Britain to revive any of these open-door agreements, and perhaps, 
therefore, the British pledges made to all the world but embodied only in the agreements 
with Germany have now lapsed. 

53 The longest time which elapsed was in the case of the Fiji Islands,, v/hich -were put 
under British protection in 1874 and Included in the declarations exchanged with Ger- 
many in 1886. The chief territories acquired in this period for which there were no 
open-door pledges were Indo-China, Burma, the Malay States. Italian Eritrea and Libia, 
and the French extensions of territory in North Africa and Senegal. 

^ See p. 216. The line of 5° north latitude was the limit of the conventional basin of 
the Congo, so that this treaty added to the open-door territory the territories between 
the geographical basin of the Congo and Lake Chad. 

55 The negotiators in behalf of the United States declared that it was the policy of the 
United States to maintain the open door ; the treaty guaranteed only to Spanish trade the 
same treatment as was accorded to American trade. 

185766°— 22 3 



28 COLOXIAL TARIFF POLICIES. 

pledged the open door and the maintenance of the previous Korean 
tariff for a period of ten years. 

TREATIES LIMITING RATES. 

Several agreements for imiform tariff schedules for certain colo- 
nies have expired, namely, for Dahomey and Togo (1S87) ; for Togo 
and the part of the Gold"^ Coast east of the River^Yoita (1894-1904) ; 
that for the Congo, French Congo, and Portuguese Congo (1892- 
1910) ; and for British and German East Africa and Italian Somalia 
(1892-1905). _ The three Brussels' treaties of 1890, 1899, and 1906 
prescribed minimum rates of duty upon alcoholic beverages through- 
out all the territory in Africa 'between 22° south and 20° north, 
including parts or all of over a score of colonies belonging to seven 
clifferent powers. In 1919 a revision of this treaty was signed at 
Saint-Germain-en-Laye and an even larger territory was made sub- 
ject to its provision.^^*^ The four agreements named successively 
higher rates as the minimum, concluding with 800 francs per hecto- 
liter of pure alcohoL^^ 

Somewhat different are the treaties by which the states of north- 
em Africa and southern Asia, from Morocco to China, have agreed 
to limit their tariff rates to certain maxima. These provisions, to- 
gether with the pledge to give most-favored-nation treatment to the 
various powers, are of im-portance in cases where parts of these ter- 
ritories fail into the possession of colonial powers. The open door 
was guaranteed in this manner in Tunis at the time of the establish- 
ing of the French protectorate, and it was not until 1898 that the 
French obtained reiativehf a free hand there. ^"^ In the same way for 
decades before the conference of Algeciras the treaties of Morocco 
with various powers entitled them to a limitation of import duties to 
10 per cent and to equality of treatment in Morocco. In Egypt the 
general rate of 8 per cent established under the Turkish regime is 
still maintained. Similarly, in parts of China " leased •' by the vari- 
ous powers the tariffs are limited, at least for a certain period, by the 
restrictions imposed long since by treaty in respect to the tariff of 
China. If Turkey and Persia fall under the sway of European 
powers, it may be expected, on the basis of their treaties with other 
countries, that the open door will be maintained, 

^ This treaty has apparently been ratified only by France. The status of the Brussels 
treaty after 1916 was not clear. The conventions of 1899 and 1906 were supplementary 
acts subsidiary to the treaty of 1890 and contain little else than rerisions of the minimum 
rate. The convention of 1906 vras to be in effect for ten years, but its intent is clearly 
■"that after the expiration of that i>eriod the rate should be reconsidered and not that the 
treaty should lapse. In any event after the end of the prescribed ten years the colonial 
powers continued to increase rather than decrease the duties upon alcoholic beverages 
through their African colonies. 

°' The object is to hinder the sale to the natives. The Brussels conferences also recom- 
mended the prohibition of the sale of liquor to natives in areas where they had not already 
become accustomed to its use. This recommendation has been put in force through large 
areas both within and without the limits to which the treaty applies. By the Brussels 
treaties and certain others limitations upon the sale of arms to the natives have also 
been agreed upon. 

58 And not until 1919 did they denounce the treaty which contained the last restriction, 
which in practice operated somewhat In the same way as an open-door provision — the 
limitation to 5 per cent ad valorem of the rate on cotton textiles from the British Empire. 
As in similar cases noted above, this rate was applied to foreign cottons generally. 



INTBODUCTIOl^ AND SUMMARY. 29 

GENERAL COMMERCIAL TREATIES. 

The treaties of commerce and navigation which regulate the in- 
tercourse of nations may be divided into four classes in respect of 
their inclusion or exclusion of provisions relating to the colonies. ^ 

(1) Many commercial treaties, even when both contracting parties 
are colonial powers, make no reference to the colonies, or mention 
them only to exclude them from the scope of the convention. To 
this class belong some of the French treaties and most of those of the 
United States (which has concluded only four general commercial 
treaties since the acquisition of the Philippines and Porto Rico), and 
of Germany, Spain, Italy, and Belgium (whose colony was acquired 
in 1908). 

(2) Other commercial treaties make a sweeping inclusion of the 
colonies, in some cases by using such expressions as "throughout 
their territories and possessions." Some of the oldest British treat- 
ies belong to this class. The French tariff law of 1892 granted tha 
right to the minimum tariff in the assimilated colonies to all coun- 
tries which by treaty were entitled to that tariff in France, so that a, 
group of French treaties which did not specifically mention the col- 
onies were of practical effect in them. (These French treaties have 
been denounced.) Some treaties, for instance the Spanish- American 
treaty of 1902,^^ contain stipulations relative to customs duties, ton- 
nage dues, and treatment of vessels in the ports of the countries 
making the agreement, but in other clauses of the same treaty re- 
lating, e, g., to rights of residence, either use such expressions as 
" throughout all parts of the territories," or " in the States, terri- 
tories, and dominions." 

(3) Other treaties again provide either that some or all of the 
colonies of one of the powers concerned may withdraw from the 
convention, or, where the colonies had not originally been included 
within its scope, that they might become parties thereto, and. in some 
cases that they might thereafter separately withdraw. Most of the 
British treaties made since 1881 contain one or other of these pro- 
visions. Some of these treaties provide that the British colonies 
even without adhering to the treaty shall continue to enjoy most- 
favored-nation treatment in the ports of the other contracting party 
so long as the colonies continue to grant most- favored-nation treats 
ment, A few of the French treaties also provide that the provisions 
of the treaty should become applicable to such colonies as the French 
Government may designate. 

(4) A few commercial treaties mention the colonies for the pur- 
pose of making special provisions for them. The majority of the 
Portuguese treaties provide 4hat colonial products reexported from! 
the mother country shall receive the same treatment as Portuguese 
products. The treaty with France, however, limited^*' this conces- 
sion to the products of certain colonies. The treaty between Por-: 
tugal and Italy provides for most-favored-nation treatment of the 
products of the colonies of one country in the market of the other 
country, but explicitly withholds the like right in regard to the 

s^^Malloy: Treaties, Conventions, [etc.] of tbe United States, vol. 2. p. 1701. 
'^ The treaty has been denounced. 



30 colo:jvIajl taeiff policies. 

colonial markets. The treaty betTveen Italy and Egypt excludes 
Eritrea from its provisions, in its reciprocity treaty with the 
United States, Cuba explicitly withholds any preferential reduc- 
tion of duty upon American tobacco and that of the American insu- 
lar possessions. Several treaties made by Great Britain and the 
Netherlands in the first half of the nineteenth century contain various 
special provisions in regard to trade with their colonies, most of 
them more restrictive than the policies now in force. 

With the general commercial treaties may be considered certain 
special treaties or agreements made by the mother countries, or by 
accredited representatives in the colonies, on behalf of one or more 
colonies. Such are various treaties made on behalf of India or 
Egypt. Earlier illustrations — of agreements which have now ex- 
pired — were the reciprocity arrangements between the United States 
and Spanish or British colonies in the West Indies ; the treaties pro- 
viding for free trade between Togo and its neighbors, that regulating 
the intercourse of Eritrea and Egj^pt,^^ ancl a group of Franco- 
British treaties made on behalf of various British colonies. Some of 
these treaties, it will be seen, concerned intercolonial relations exclu- 
sively. Conventions of this description which are still in force are 
the Mozambique-Transvaal arrangement and the numerous inter- 
colonial reciprocity agreements to which the British Dominions and 
the British West Indies are parties. 

The treaties which by their terms regulate trade with the colonies 
deal with the treatm.ent to be accorded (1) in one country to the 
products of the colonies of the other or (la) to such products when 
reexported from, the mother country, or (2) in the colonies of one 
country to the products of the other country, or (3) in the colonies 
of one country to the products of the colonies of the other. The 
general treaties of commerce of most of the colonial powers deal 
chiefly with (1) ; those of Portugal generally include (1-a) ; the 
French treaties recently terminated either explicitly or by construc- 
tion belonged under (2) , and some of the more recent treaties of Japan 
(e. g., the treaty of 1911 with the United States) include (2) and 
(3). The French legislation ^^ by which certain American products 
have enjoyed in France the minimum or intermediate tariff rates, 
extends the same treatment to products of Porto Rico. On the whole 
the commercial treaties of the colonial powers deal much more with 
the customs and tonnage duties and other commercial regulations to 
be enforced in national ports and markets by the citizens and the 
products, both of a given foreign country and of its colonies, than 
they do with the similar rights to be enjoyed in the colonies. 

The content of the commercial treaties in so far as they regulate 
the import trade of the colonies does not differ markedly from the 
content as applicable to the mother country. The most-favored- 
nation clause is found in a large part of them in connection with the 
customs duties, tonnage, and other navigation dues, and a wide range 
of provisions in regard to commerce, residence, taxation and prop- 
erty. When the treaty deals with the colonial markets separately 

<'! This treaty is being continued temporarily in force. 

6- This legislation was the result of negotiations carried on in 1010, which were never 
published as a definite international agreement. 



INTEODUCTION AND SUMMAEY, 31 

the clause usually reads: "the most-favored foreign nation," mak- 
ing it clear that special treatment, e. g., preferential tariffs, may be 
accorded to the mother country. But even when the Avord foreign 
is not inserted, the most-favored-nation clause is interpreted in the 
same way, and the general commercial treaties now in force between 
the colonial powers do not accord the open door in the colonial mar- 
kets. Open-door provisions are confined to (1) commercial treaties 
made by states formerly independent but now protectorates,^^ or (2) 
political treaties between the powers—peace treaties or those making 
settlement of territorial questions.^* The general commercial treaties 
usually reserve the coasting trade of the mother country to national 
vessels, and in case the treaty deals with the subject, the coasting 
trade of the colonies is usually likewise restricted to national vessels ; 
but a few treaties stipulate that a part or all of the intercolonial trade 
and that between the mother country and the colonies shall remain 
open to foreign vessels. 

VI. Features of Colonial Tariff Policies — Summary. 

POLITICAL. 

In considering colonial tariff policies, the first and most funda- 
mental distinction of which account must be taken is of a political 
rather than of an economic character : It is based on the difference 
in location of the tariff making authority. This authority Ues \ 
primarily either with the home government or with the administra- \ 
tion of the colonies individually. Complete fiscal control has been t 
granted only to the self-governing Dominions of the British Empire. ' 
That the British self-governing Dominions at present all impose pro- 
tective duties and grant preferential rates ^^ to a part or to all of the ; 
British Empire is significant but incidental : The fundamental fact I 
is that they are free to determine their own tariff policies ; in regard | 
to them Great Britain can be said to have had in recent decades only ^ 
a negative tariff' policy,^^ 

In respect to all the other British colonies and to all the colonies j 
of other powers, tariff policies are in greater or less degrees subject I 
to the control of the home governments. 'Not alone the policy, but ' 
even the rates, may be prescribed by the national legislative assembly 
(assimilated colonies) ; or by royal decree (Spanish colonies) ; or 
they may be determined locally subject to vetoes (Philippines, some 
British Ct^own colonies) ; or subject to general restrictions, such as 
that the preference to the home countr}^ shall not be less than a cer- 
tain am.ount (Portuguese colonies, charter of Ehodesia) or subject 

s^ Or they are renewals or revisions of sncli treaties made after the establishment of 
the protectorate, e. g., the treaties of Egypt and those relating to Morocco. Compare 
the treaty. United States-Tonga, denounced in 1920 by Great Britain,, which now holds a 
protectorate over that group. 

^The treaty of Berlin, 1885, was officially unrelated to territorial questions, but never- 
theless the connection was intimate. The treaty of 1904. which provided for freedom of 
transit across certain British and French colonies into Egypt and Morocco, respectively, 
was part of the general settlement of all outstanding questions which inaugurated the 
entente cordiale between Great Britain and France. 

^^ Except Newfoundland. 

^^The policy has been not to interfere further than to see to it that the Dominions 
observed such most-favored-nation treaties as were binding upon them as part of the 
Empire, and that they did not discriminate against the United Kingdom : and further, the 
policy was, until 1919, to grant no preferential rates to colonial products. 



32 COLONIAL TARIFF POLICIES. 

to restrictions imposed upon the mother country by treaty pledges; 
or they may be promulgated by a governor who is subject to orders 
from the colonial office (Italian colonies and many of the British 
Crown colonies). 

ECONOMIC. 

In recent decades conflicts of public opinion over tariff policies 
have dealt almost exclusively with the range and the rates of import 
duties — the question of adopting protection or of increasing or de- 
creasing its extent. In this respect, as in others, the British self- 
governing Dominions have shown their resemblance to independent 
nations rather than to dependencies. But in these Dominions and 
in Great Britain for the last score of years a second question- — ^though 
it was frequently rather another phase of the same question — has 
divided the attention of those who concerned themselves with tariff 
fpolicies, namely, the question of the extent to which and the condi- 
I tions under which preferential rates should be granted to the prod- 
jucts of other portions of the empire. The center of the controversy 
nas been the tariff relations between Great Britain and the Domin- 
ions; and as both mother country and the Dominions have consist- 
ently refused to consider their tariff relations a matter for bar- 
gaining,^'^ the discussion in each territoiy has dealt simpl}^ with the 
import duties to be imposed in its jurisdiction.' In the Dominions 
and Great Britain, as in other mother countries, the tariff policy 
relative to the dependent colonies has received comparatively little 
attention; it has been the affair of legislative committees, of the 
colonial ministrj^, and of colonial societies, rather than of public 
opinion. 

While metropolitan (national) tariff policies deal almost exclu- 
sively with the range and rates of import duty, colonial tariff poli- 
cies must give consideration to : First, the import duties imposed in 
the colonies; second, the export duties commonly employed in the 
colonies; and, third, the duties, if any, imposed on colonial products 
in the home market. Minor features, important in some cases, are 
the duties on intercolonial trade, transit duties, shipping restrictions, 
and additional or supplementary duties such as octrois and municipal 
taxes. The French octrois de mer and other consumption duties are 
relatively important, and considerable attention will be given them 
in the chapter of this report which deals with the Colonial Tariff 
Policy of France. The scope of this report does not require attention 
to municipal taxes collected in single ports or to pilotage and other 
minor fees, but in a number of places these have been referred to 
in so far as they contain preferential features. Transportation re- 
strictions directly connected with tariffs, such as the limitation of 
preferential rates to merchandise transported in national ships or 
to goods transported directly have, of course, been given attention. 

TYPES OF COLONIAL TAKIFF POLICIES. 

Current practices disclose the prevalence of three types of tariff 
policy: The policy of tariff assimilation, the policy of preferential 

6' This Is not true of tlie relations of the Dominions among themselves. 



INTEODUCTION Al^B SUMMARY. 33 

tariff treatment without tariff assimilation, and the policy of the 
"open door." These may be distinguished primarily according to 
the treatment accorded to national as compared with or contrasted 
with foreign products seeking to enter the colonial market. At a 
later point all the various elements of the colonial tariff policies 
will be taken up more in detail under headings respectively appro- 
priate. (See pp. 43-70.) 

(1) Policy of tariff assimilation.—When the rates of duty of the 
tariff of the mother country are enforced also in the colony, the trade 
between these two units being free; that is, where mother country 
and colony form essentially a customs union, the tariff policy which 
prevails is that of assimilation. Typical instances appear in the 
practice of France, in that of the United States in reference to 
Porto Eico, and in that of Japan in Formosa. In the tariffs of 
these countries the schedules of duties are framed primarily for the 
purpose of protecting the domestic manufacturer in the home market ; 
and these schedules are extended to the colonies for the purpose of 
holding the colonial market for the producers of the mother country. 
Conditions in the colonies may be utterly different from those in the 
mother country, but coloniar interests have little or no direct rep- 
resentation in the national legislatures and the cover of the blanket 
of protection is not apt to be extended to them. In some cases, how- 
ever, the national legislature imposes duties for the special benefit 
of colonial products. Such, for instance, is the French duty on rice.^^ 

Free entry of national products into the market of the colony has 
its logical concomitant in free entry of colonial products into the 
mother country. This reciprocal favor granted by the mother coun- 
try is, however, not ordinarily an equivalent favor. Colonial prod- 
ucts are chiefly raw materials, and raw materials usually enter im- 
porting countries free or at low rates of duty. Hence colonia-1 prod"- 
ucts usually meet small barriers or none in foreign countries, and are 
protected in the market of the mother country by small duties or 
none. Consequently, free entry to this market is not as valuable to 
the colonial products as is free entry to the protected markets of the 
colonies to the industrial products"^ of the mother country. There 
are, however, certain important commodities which are largely ex- 
ported by various colonies— for instance, sugar, coffee, tobacco', and 
cocoa— which are usually taxed by the mother country for revenue 
purposes, and their free admission may give to such colonial products 
a decided advantage.^^ 

But the advantage may be of almost negligible proportions, even 
though the differential be considerable. These products are world 
staples, with well-established grades, qualities, and prices; the im- 
port duties upon them are normally charged to the consumers, and 
the benefit which a differential affords to the colonist is not great— 
except for the important assurance of favorable treatment in a 
known market— unless the market of the mother country can absorb 

, 63 Again, the protective tariff of the mother country may contribute to building up an 
industry m the colony also — thus, the French tariff treatment of textiles and the' growth 
of the cotton industry in Indo-China. 

«9 Contrariwise, fiscal considerations may prevent the granting of the colonial product 
01 the entire remission of the duty, as in France, especially before 1914, or as in the 
preteren tial rates of the United Kingdom. On the other hand, these duties are frequently 
sumciently high so that a partial remission constitutes an effective preference. 



34 COLONIAL TAEIFF POLICIES, 

the 'u^hole colonial product and more. For, if the binders for the home 
market have to pay the open-market price plus the higher duty on 
the part of the supply they can afford to pay the same total price to 
the colonists, assuming an equality of freight and other costs. Un- 
less there is a combination among these buyers, the price in the 
colonial market under these conditions is likely to go close to the 
world price plus the differential. If, however, the colonists can sell 
only a part of their product in the home market, the ruling price 
for all of it will be close to the world price, less the freight to the 
dominant market. 

(^) Preferential tariff policy.- — The largest tariff preferences, 
which are granted at the present time, are found in the trade between 
countries and their assimilated colonies. Assimilation is, therefore, 
the most extreme preferential policy ,'^*^ but for convenience the use 
of the terms preferential policy and preferential or differential tariffs 
[is here restricted to those tariff systems in which tariff assimilation 
' is absent, but lesser degrees of tariff favors are granted. A prefer- 
ential tariff system in this narrov^er usage may then be defined 
as one in which the mother countr}^ and the colony have different 
j tariffs and in which there is partial or entire exemption from duty 
for the trade in one or both directions. Occasionally rates adopted 
in the tariff of a colony are higher than those in the mother country, 
but except in the case of the colonies of free-trade Great Britain such 
higher rates are found only sporadically and on a few items.'^^ Oc- 
casionally also the rates on certain articles are the same either 
through coincidence or by design.-^ Normally, however, the rates 
are lower than, and are imposed without reference to, those of the 
mother countries. 

The existing preferential tariff's may be divided into two types: 
Those of the British Dominions and those of a considerable number 
of dependent colonies— the Philippines, various British Colonies, and 
the colonies of Italy, Spain, and Portugal. '^^ The British Dominions 
are industrial nations pursuing protective-tariff policies and levying 
high rates of duty upon manufactured goods. These rates are fixed in. 
reference to all competition, including that of Great Britain and the 
sister Dominions, but there are higher schedules of duties levied upon 
non-British goods. This represents the actual method of arriving at 
the rates,'^^ but the tariff schedules may have the form of levying cer- 
tain rates on goods of non-British origin,'^^ and granting certain re- 
ductions or specified lower rates to British products. Upon a com- 
paratively small number of items dutiable at relatively low rates the 
differential reduction takes the form of free admission. Generally, 
however, the base rates are relatively high and the preference is a 
minor fraction of the rate, from one-fourth to one-half. 

''^ But see note on p. 72. 

''I Usually in application to commodities for which the colonial tariff has not a detailed 
classification and to which as a class there is assigned a rate higher than the lowest rate 
applied in the mother country to the poorer qualities — the diffei-ences being recognized in 
classification — of the same class. 

■^2 In the .Philippines and in some of the French colonies some articles have been made 
dutiable at tlie same rates as in the mother country to prevent attempts at evading the 
metropolitan (national) duty by importation by way of the colony. 

■^3 See footnote on p. 713 for the difference in the character of the preferences which 
Canada grants to Great Britain and to the British West Indies. 

'* Except in the earlier grants of preferential rates by Canada to Great Britain, where 
the preference was designed to operate as a general reduction of duties. 

"'^ Or of colonies which do not enjoy preferential treatment ; the preferences are not in 
all cases given to all parts of the Empire. (See pp. 53, 54.) 



IITTEODUCTIOX AND SUMMARY. 35 

The mother countries, except Great Britain, have protective tariffs, 
but the rates in the tariffs of their dependent colonies are levied more 
largely for revenue and range generally from about 10 to 20 per cent. 
The differential in favor of the mother country is usually, outside of 
the British Colonies, the whole or the major part of the dutyJ*^' 
Preferences in the colonial market are usually accompanied by pref- 
erences to colonial products in the home market, but the extent of the 
two is by no means always comparable. The United States grants 
free entry to the products of the Philippines, but Portugal gives 
Angola the benefit of but 50 per cent reduction compared with a 
preference in the latter of 90 per cent, and Italy has so far given 
Libia no tariff favors whatever. 

(S) The '' open-doo?-'^'' policy. — It may be that in the tariff of a 
colony no distinction is made between the products of the mother 
country and those of other countries. The policy there prevailing 
is that of the " open door." The principle of the open door is not to 
be confused with free trade ; it implies simply equal terms of entry 
for all. In an open-door regime a tariff' may be devised either with 
a view to protection of local industry — as was the case in the self- 
governing Dominions before preferences were granted— or for reve- 
nue only, which is the usual case. The rates in open-door tariffs are 
usually lower than those in either the assimilated or the preferential 
systems. The colonies of the Netherlands and of Belgium and the 
majority of the British Crown Colonies have, as all the German 
colonies had, low rates and no discriminations against foreign trade.'^ 
Reciprocally, the countries named had granted no favors in the 
hom.e m-arket to the colonial products until in 1919 Great Britain 
granted preferential rates upon the limited tariff schedule of the * 
United Kingdom, Where the open door is maintained as an excep- 
tion from the general national policy, as in the Canary Islands and 
Spanish Morocco, American Samoa, and some of the French colonies, 
these colonies ^^ receive certain favors in the mother country. 

" Free trade " in the strict sense implies absence or approximate | 
absence of any duties. A free-trade regime prevailed in Central 
Africa before 1890 (though there were export duties) and in India 
as late as 1894, but it now persists only in a few small areas where 
the transit trade is predom.inant— for instance, in Aden, the Straits 
Settlements, Djibuti, and Melilla. The term "free trade " is fre- 

'^^ It may be expressed as a specified part or percentage of it or by separate rates on 
various items. 

''''Colonial tariff policy of DoimarTc. — Since the sale of her West Indian Islands and the 
grant of independence to Iceland, Denmark possesses only the Faroe Islands and Green- 
land. (Iceland, though it has been " independent " since Dec. 1, 1918, recognizes the 
Ts^ing of Denmark as sovereign and conducts its foreign affairs through Denmark.) It has 
not been thought advisable to include in this report a study of the colonial tariff policy 
relative to these colonies. It may be said, however, that before the recent diminution of 
the Danish Empire the earlier discriminations against foreign products had disappeared 
from the colonial tariffs, but they continued in the tariff of the mother country, Danish 
shipping received certain favors in the Virgin Islands up to the time of their sale to the 
United States, but the colonial government was authorized to extend, under certain cir- 
cumstances, these favors to foreign vessels. Sugar and liquors manufactured in the 
Danish West Indies from products of those islands paid in Denmark only the amount of 
internal tax, with a deduction equal to the export duty paid in the West Indies, but not 
exceeding 5 per cent. Other products or manufactures thereof from these islands paid 
two-thirds of the usual duty. Articles manufactured from the raw materials of the 
remaining colonies continue to enter Denmark free by special provision of the tariff law. 
Denmai'k levies few duties upon raw materials and apparently none that affects imports 
from these colonies ; e. g., the only duty on fish is levied on salmon, trout, sardines, and. 
spiced anchovies. 

"''^ With two exceptions among the French colonies. 



38 



COLOIs^IAL TAEir^ POLICIES. 



quently used loosely in reference to open-door regimes — that is, 
regimes whose characteristic feature is not absence of duties but 
absence of diiferentials. The usage is due partly to the prevalence 
of low revenue rates in ox)en-door colonies. 

The open door with moderate duties is found in some colonies of 
countries whose prevailing policy is assimilation or preference — 
France, Portugal. Spain, and the United States—and in the leased 
territories of Japan. The exceptions are made because of treaty or 
similar obligations, or for other reasons. (See p. 42.) Such treaty 
provisions or obligations are described elsewhere m this section under 
the heading " Treaties and other international arrangements impos- 
ing limitations in regard to colonial tariffs." (See p. 26.) 

NATIONAL POLICIES AND COLONIAL TAEIFFS. 

At this point the tariff policy of each colonial power may be sum- 
marized briefiy.^^ As is seen in Table 8, the colonies of the N'ether- 
lands and Belgium are, and those of Germany were, all open-door 
colonies, as are also the majorit}^ of the British dependent colonies. 
The countries which pursue a policy of assimilation — free trade be- 
tween the colonies and the mother country and in both the same tariff 
against outsiders— are France, Japan, and the United States (in 
Porto Rico) ; while Spain, Portugal, Italy, and the British Dominions 
pursue a preferential policy without going so far as free trade be- 
tween the colonies and the mother country. The British Dominions 
alone systematically levy protective duties against products of the 
mother country. It will be observed from the table that all except 
Germany, Belgium, and the Netherlands have colonies where by 
exception, for reasons indicated and discussed below, the national 
policy is not put in force. 



Table 8. — Colonies classified according to import tariff system. ' 
[See maps, pp. 4, 26, 310, -316.] 



Countries. ! AssiTnilated. 


Preferential. 


Open Door. 


Belgium 






Belgian Congo. 
French Morc>cco. 


France 


Algeria. 

French Indo-China.i 

Timis.2 

Madagascar. 

Reunion. 

Martinique. 

Guadeloupe. 

New Caledonia. 

French Guiana. 

Gaboon. 


French West Africa: 

Senegal. 

Guinea. 
French Oceania. 
St. Pierre and Miquelon. 




French Somaliland. 
French West Africa: 

Dahomej'. 

Ivory Coast. 
French India. 
French Equatorial Africa. 
New Hebndes.s 


merlj-). 

1 Different 

2 One or tv 


lal export duties. 

70 items of differential e- 


3 Anglo- 
.port duty. * Now n 


German Southwest Africa. 

Kamerun. 

Togo. 

German Samoa. 

New Guinea. 

Kiaochow (leased territory). 

French Condominium, 
amed Tanganyika. 



79 Longer summaries will be found in Section III of the chapters devoted to the dependent colonies of 
the different countries, and in the fuial sections of the chapters of Part II. 



INTRODUCTION AND SUMMARY. 
Table 8. — Colonies, etc. — Continued. 



37 



Countries. i Assimilated. 

I 


Preferential. 


Open door. 


Great Britain 




Dominions: 

Canada. 


British India. 2 







Newfoundland. 






Australia. 


(Under Australia:) 






New Zealand. 


Papua . 






Cook Islands. 


Norfolk Island. 






South African Customs 


Colonies in Asia: 






Union- 


Aden. 






Union of South Af- 


Ceylon. 






rica. 


Straits Settlements. 






Rhodesia. 5 


Federated Malay States— 






Basutoland. 


Perak.2 


• 




Bechuanaland. 


Selangor.2 






Colonies: 


Negri Sembilan.2 






Trinidad. 


Pahang.2 






British Guiana. 


Protected Malay States— 






Jamaica and Caymans. 


Johore. 






Turlcs and Caicos. 


Kedah. 






Barbados. 


Perils. 






Leeward Islands- 


Kelantan. 






Dominica. 


Trengganu. 






Montserrat. 


Hongkong. 






St. Christopher- 


Vfeihaiv/ei (leased terri- 






Nevis. 


tory). 






Virgin Islands. 


Colonies in Africa. 






Antigua. 


Nigeria. 2 
Gold Coast. 2 






Windward Islands- 






Grenada. 


Sierra Leone.2 






St. JAicia. 


Gambia. 2 






St. Vincent 


British Somaliland. 




British Honduras. 


Keava ' and Uganda. 






Bahamas. 


Zanzibar and Pemba. 






Cji)rus. 


Nyasaland. 






Fiji- 


Anglo-Egyptian Sudan. 
Other colonies: 
Gibraltar. 
Malta. 

Britisli North Borneo. 
Brunei. 
Sarawak. 
Tonga. 
Solomons. 

Gilbert and ElUce Islands. 
Mauritius. 
Seychelles. 
Falkland Islands. 
Bermuda. 
St. Helena. 


Italy. 




Eritrea. 


Italian Northern Somaliland. 






Somalia. 1 


Rhodes. 






Libia. 




Japan 


Formosa, or Taiwan. 
Saghalin,or Karafuto. 




Kwangtung (leased territoiy) 






Kiaochow (leasedterritory). 




Korea, or Chosen. 






The Netherlands . 






Dutch East Indies. 








Curacao. 
Dutch Guiana. 


Portugal 




Mozambique.! 
Angola. 1 


Macao. 






Portuguese Congo. 






Cape Verde Islands.i 








Portuguese India. 








Timor. 








Sao Thome and Princinei 








Portuguese Guinea. 




Spain 




Fernando Po.i 
Spanish Guinea. 


Canary Islands. 






Spanish Morocco. 






Rio de Oro. 




United States 


Porto Rico 


Philippines. 
Virgin Islands. 


American Samoa. 






Canal Zone. 






Guam. 





1 Also differential export duties. 

2 One or two items of differential-export duty. 

an relation to New Zealand, the Cook Islands constitute an assimilated colony. 

5 Northeastern Rhodesia lies within the basin of the Congo and maintains the open door in accordance 
with the general act of the Conference of Berlin, 1885. The rest of Rhodesia has greater preferences thaa 
the other territories in the South African Customs Union. 

• Formerly British- East Africa. 



38 COLOITIAL TARIFF POLICIES. 

The Netherlands^ Belgium^ and Germany. — The Netherlands since 
1874, and Belgium and Germany since they became colonial powers 
have maintained in all their colonies the open door and low or mod- 
erate tariffs for revenue only. They have made no exceptions to the 
rule that no direct tariff favors were to be enjoyed either in import 
or export duties either in the colonies or in the mother country. In 
all three cases, hov>^ever, a great share of the trade of the colonies has 
remained with the mother country.®^ 

Grea(t Britain.— Bet\YQen 1860 and 1919 Great Britain maintained 
the open door in India and in the Crown Colonies generally, with 
either free trade or low tariffs for revenue only. In this period no 
British dependent colony had a general system of preferential 
rates,^^ but ten of the West Indian tariff schedules already contained 
preferential rates upon a fairly extensive but by no means complete 
list of Canadian and British goods.^^ ■ Previous to 1919 there was also 
a preferential export duty upon tin ore exported from the four Fed- 
erated Malay States. Beginning with September, 1919, the British 
market has given a special preference to colonial imports, and this 
may be described as a general system of preference since it extends 
to all of the articles dutiable under the British tariff; but it must be 
noted that the British tariff before the war was limited to sugar, 
cocoa, coffee, tea, tobacco, liquors, dried fruit, gasoline, and a few 
lesser items, and that only a very few manufactured articles were 
added during the war. The British Government accepted this pref- 
erential principle as applicable to the whole Empire and during 
1919-1921 there has been a considerable extension of differential 
tariffs in the dependent colonies. In these years complete preferen- 
tial import schedules have been adopted or extended by all the 
tariff divisions of the West Indies except Bermuda, and the amount 
of the preferentials has been increased ; a complete system of prefer- 
ences has been introduced in Cyprus; and differential export duties 
have been, imposed upon raw hides and skins exported from India, 
upon palm kernels exported from Nigeria, the Gold Coast, Sierra 
Leone, and Gambia, and upon tin ore exported from Nigeria. There 
are thus, in addition to the self-governing Dominions and the pos- 
sessions dependent upon or intimately associated with them, 25 tariff 
jurisdictions among the British Crov^m Colonies, including India, 
v/hich now have more or less extensive differential duties— 16 (Cy- 
prus and 15 in the West Indies) have more or less complete schedules 
of differential import duties, and 9 (4 Federated Malay States, 4 

^° This has been due to various factors, of which the most tangible are : For the Nether- 
lands, the domination established before the trade was thrown open, shipping subsidies, 
the reseiwation of the colonial coasting trade to national vessels, and the remnants of the 
'■ culture system " ; for Germanyj certain shipping restrictions, as well as subi^idies ; and 
for the Belgian Congo, a practical monopoly of trade by the State (abandoned after 
Belgium took over the colony from King I^eopold) established by means of land legisla- 
tion, the taxation system, and other instrumentalities. 

s^ The only exceptions were the South African dependencies, which are outside of the 
self-governing Union of South Africa, but within the South African Customs Union, and 
the Cook Islands, governed by New Zealand. British possessions in South Africa 
have the preferential tariff of the South African Customs Union, with the exception of 
Rhodesia, part of which lies within the basin of the Congo where treaty provisions 
require the open door, and the rest of w^hich is subject to the provisions of the charter of 
Ehodesia, which limits the rates leviable upon British goods and thus in effect requires 
preferences greater than those of the Union. These possessions are treated in this report 
as dependencies of the Dominions rather than as Crown Colonies of Great Britain, since 
with the partial exception of Rhodesia their tariff policy is determined by the Dominions. 
But see chapter on South Africa, p. 743. 

*'- These i-ates were the result of the negotiations with Canada in 1912. The list con- 
tained 47 items and the reductions were generally 20 per cent of the duty ordinarily 
levied. 



Unttroductioit and summary. 39 

West African colonies, and India) have differential export duties 
upon not more than two articles each. But since only about 5 per 
cent of the total trade of the British Crown Colonies is affected 
b}^ these differential duties (see pp. 369, 370) , the open door is still th© 
polic}^ prevailing in the dependencies of Great Britain. 

The self-governing Dominions, — The four great self-governing 
Dominions ^^—-Canada, Australia, New Zealand, and South Africa- 
pursue tariff policies which are more characteristic of nations than 
of dependent colonies. These Dominions are industrial nations sys- 
tematically seeking the development and diversification of local in- 
dustries. By the use of tariff walls they reserve their markets to 
domestic manufacturers and producers. Seeing in the tariff an in- 
strument of domestic political and economic policy, they have ex- 
tended its use to the larger field of imperial and international affairs. 
Since the sentiment for drawing the Empire more closely tog-ether 
may be utilized either in favor of a reduction of duties upon British 
products or in favor of an increase of the duties on foreign products, f 
statesmen of the Dominions have frequently found the preferential \ 
tariff a useful means of popularizing changes which they desired to \ 
make in the general level of tariff rates. These facts explain in a \ 
broad way the adoption of preferential tariff policies in the self- ■ 
governing Dominions a dozen to tw^enty years earlier than in free-' 
trade Great Britain. 

As already mentioned, the type of preferential tariff found in the 
Dominions is peculiar to them. It is distinguished from the pref- , 
erential schedules of the dependent colonies in that the base rates are | 
high protective duties instead of moderate protective^* duties or j 
revenue rates and in that the differentials granted constitute a minor 
rather than a major fraction of the base rate. Upon a relativelj^ small 
number of items, rarely dutiable at more than 10 per cent,^^ the differ- 
ential reduction takes the form of free admission. Generall}^, how- 
ever, the base rates run from 20 to 50 per cent, and the preference is a 
miiiDr fraction of the rate, usually from one-fourth to one-half, and 
amounts to from 5 to 20 per cent ad valorem. 

The preferential schedules of the self-governing Dominions are 
applicable primarily to products of the United Kingdom. To a 
limited extent they are extended also to the products of the other 
Dominions, and to the rest of the Empire, but there is no uniformity 
in this matter = Between 1898 and 1907 all the Dominions adopted 
preferences in favor of Great Britain. This was clone without bar- 
gaining on the subject and without receiving any reciprocal favor 
until 1919.^*^ In 1903, when New Zealand introduced her preferen- 
tial rates, she made them immediately applicable to the whole British 
Empire, and all increases in her differentials^^ made since that data 

83 Throughout t^is discussion the Dominions do not include Newfoundland, which has 
no preferential tariff. 

^ The rates applied in the preferential-tariif colonies to raise revenue and to give partial 
protection to the industry of the mother country. 

S5 In New Zealand a dozen articles dutiable at 20 per cent are on the Empire free list. 
In Canada in 1919-1920', after the repeal of the war tax on imperial products and before 
its repeal on other products, the British free list was composed largely of articles other- 
wise dutiable at 7 J per cent, but a few items had rates even higher than 20 per cent. 
In South Africa and Australia articles ordinarily dutiable at not more than 3 per cent 
and 5 per cent, respectively, are on the British free list. 

**6And see p. 824 for the insignificance of the advantages to be derived by the Dominions 
from the preferential schedules adopted in Great Britain in 1919. 

**'' I. e., in the voluntary and one-sided preferences. Her reciprocity agreement with 
South Africa conceded certain rates not granted to other British possessions. 



40 COLONIAL TAKIFF POLICIES. 

liare had an equally wide field of operation. The other three Do- 
minions have granted tariff favors to sister Dominions only after 
negotiations and special concessions,^® and as the negotiators have 
frequently failed either to agree among themselves or to satisfy the 
legislative bodies whose ratification of the agreement was necessary, 
the network of preferential agreements among the Dominions is by 
no means complete.®^ The British Crown Colonies and India have 
been regularly included in the preferential legislation of New Zea- 
land, but in Canada the preferential rates were extended to the 
dependent colonies only gradually between 1898 and 1913, while 
South Africa and Australia have granted to those colonies no favors. 

Italy, — Italy maintains colonial tariffs with low rates of duty but 
otherwise with large preferences to national goods. Italian goods 
enter Eritrea practically free and receive a preference in Somalia 
which is especially effective on cottons — the chief article of trade. In 
Libia there is a preference by the process of undervaluing Italian 
goods to the extent of about 50 per cent, and certain open preferences 
on textiles and sugar. The- export duties of Eritrea are insignifi- 
cant and those of Libia very low and neither colony has differentials 
in these duties; in Somalia a few of the chief items of export have 
differential duties. Somalia offers special rates to certain products 
of Eritrea. The preferences in Italy to colonial goods are very 
limited, though the tendency is to increase them. 

Spain.' — Spain is by tradition among the countries which restrict 
their colonial trade by preferential tariffs. Differential rates are 
granted to the chief colonial products when they enter Spain in 
Spanish ships; and in both the import and export schedules of 
Fernando Po preferences are granted to the mother country. The 
im^porcance of Spanish preferences, however, was much diminished 
in 1898-99 by the loss of Cuba and Porto Eico and the sale of the 
Spanish colonies in the Pacific. Spain had long maintained the open 
door in the Canary Islands (except for preferentiais given to cocoa 
and coffee of Fernando Po) and with the recognition of her posses- 
sion of a part of Morocco (in which the maintenance of the open 
door is required by treaty) , the greater part of her colonies became 
open-cloor colonies. But in 1914 a preference was granted to Spanish 
sugar in the Canary Islands. 

Portugal. — Portugal applies most thoroughly in her colonies the 
principle of preferential tariffs, but without going so far as tariff 
assimilation. At the same time there is less uniformity in the Portu- 
guese system, and there are more exceptions required to any gen- 
eralization that may be attempted than in reference to the other 
colonial systems. Generally speaking, however, there are duties on 
all imports both in Portugal and in the colonies and on all exports 
from the colonies, and in all these duties there are differential rates 
in favor of Portuguese or colonial goods or in favor of Portug-uese 
ships. Colonial products, except a few more favorably treated, pay 
in Portugal, if transported in Portuguese vessels, only one-half of 
the usual rates, and a law of 1914 prescribes that in the colonies the 

s« Except that Canada responded to New Zealand's free extension of her preferential 
scliediile to the proauets of Canada by a like free extension of her preferential schedules 
to the products of Xew Zealand. (See p. 695 for the extension of Canada's pre.ferential 
rates to products of sister colonies not Dominions.) 

s" See under the heading Intercolonial trade, p. 53. 



INTKODUCTIOl^ Als^D SUMMARY. 41 

preferences to Portuguese products transported in Portuguese ves- 
sels shall not be less than 50 per cent. This is now the preference 
in Portuguese India, and in Portuguese Guinea, and on many articles 
in Mozambique, but in the other colonies the old differentials of 80 
and 90 per cent generall}/ prevail. Macao is a free port, and in that 
part of Angola which lies within the conventional basin of the Congo 
the open door is maintained. A peculiar feature of the Portuguese 
system is that foreign goods " reexported " from Portugal receive 
in the colonies a 20 per cent reduction in the colonial duties. These 
reexported goods pay in Portugal certain fees, but not the Portu- 
guese tariff, and this is frequently the most convenient way of getting 
articles into the colonial market. 

France, — France adopted in 1892 tariff assimilation as its prevail- 
ing policy. This regime is applied to Algeria, Inclo-China, Tunis, 
Madagascar, and five less important colonies, though the tariff 
of Tunis is not fully assimilated to that of France. These assimi- 
lated colonies enjoy free trade with France,^^ except that colonial 
sugar and pepper pay duties, though. at a much lower rate than 
similar foreign products, and except that the colonies®^ have cer- 
tain additional duties not called customs duties, which are collected 
on imports from France as well as on those from foreign countries. 
This assimilation of the tariff rates, however, is not absolute, and 
each colony has a list of exceptions based on the local needs. The 
articles listed come in free or at lov/er duties than the French tariff 
rate,^^ In some of the nonassimilated colonies — for instance. West 
Africa and Oceania — there are special tariffs, lower than the French, 
giving preferences to French goods; and in other colonies the open 
door is maintained either by treaty, as in Morocco, Dahomey, and the 
Ivory Coast, or by policy, as in French Somaliland and French India. 
In Morocco, however, the open door is guaranteed hv treaty only in 
the seaports, and imports and exports overland from and to Algeria 
and the Spanish city of Melilla are dutiable at much smaller rates 
than in the seaports,^^ The general tendency is to develop closer and 
closer relations with the nonassimilated colonies by granting in- 
creased preferences to their products on entry into France. Inter- 
colonial free trade is the rule for all the French colonies, with the 
exception of Tunis. 

JapoM, — In 1909 Japan applied the policy of tariff assimilation to 
her colonial possessions, which were at that time Formosa, the Pesca- 
dores, and Saghalin. In the foUov/ing year, when Korea was an- 
nexed, the open door was pledged therein for 10 years, and the 
assimilation of its tariff" followed immediately upon the expiration 
of this period — August, 1920. A few items of Japan's tariff had 
earlier been changed to give a preference to products of Korea. 
Overland trade between Korea and Manchuria, if carried by rail, 
enjoys special reductions in the import and export tariffs of China. 
In the territories leased from China— Kiaochow and Kwangtung — 
the Chiiiese maritime customs are in force, except that a part of the 
port in Kiaochow and the whole of Kwangtung constitute free areas, 
so that in the latter only merchandise in transit through the territory 

^° Trade between Prance and Tunis is not entirely free. 

^1 France also has a few consumption duties which fall equally on goods of all origins. 

^2 A very few have higher rates. 

»3 See p. 210. 



42 COLONIAL TATtirr POLICIES. 

is dutiable. Products of these territories are subject in Japan to the 
minimum tariff rates ; that is, those of the conventional tariff. In a 
word, Japan's policy is entire tariff assimilation of her colonial pos- 
sessions, except that free admission to Japan is not granted to the 
products of the leased territories in which Japan's tariff' can not be 
enforced because of treaty obligations. 

United States. — The United States pursues the polic}^ of preferen- 
tial trade relations with its colonies. American products enter free 
in all the insular possessions,^- except only Samoa, where the in- 
definite maintenance of the open door is guaranteed by treaty. Like- 
wise, from all the insular possessions^* local products enter the 
United States free. The rates of the United States tariff are in force 
in Porto Eico, but the Philippines, Virgin Islands, Guam, and Samoa 
have individual tariffs. The rates are fairly high for the Philippine 
Islands. In the Virgin Islands the tariff of the Danish regime is 
temporarily continued in force. No export duties are levied in the 
insular possessions other than the Virgin Islands, and there they are 
uniform regardless of the destination of the products. 

REASONS FOE EXCEPTIONS TO NATIONAL POLICIES. 

; The countries which pursue a general policy either of assimilation 
/or of preference make various exceptions to their general practice. 
Some of these have not been traced to their causes, but the reasons for 
most of them are sufficiently obvious. These reasons may be classified 
under four headings : International relations, geographical influence, 
fiscal demands, and the interest of the consumer. In the first two of 
these are found the explanations of the widest variations from polic'f , 
namely, in the cases of the open-door and special tariff' colonies among 
the powers which pursue a more restrictive policy. In reference to 
the larger areas, the explanation lies usually in the requiremients of 
treaty or siiniiar obligations;^^ in the smaller areas, geographical 
and communication features are usually the determining factors.®^ 
If national goods obtain a monopoly, more or less com4olete, of a 
colonial market by reason of free entry there, it is obvious that little 
or no revenue will be derived from customs. Accordingly, fiscal needs 
have led to the imposition of uniform consumption duties upon im- 
ports into the French assimilated colonies, and in other cases the 
needs of the treasury have made impossible reductions in the duties 
on national goods in colonial markets®^ or on colonial products in 
the home market.^® 

Policies of assimilation naturally tend to the prevalence of compar- 
atively high import duties. But the interest of the consumer and 
the need for developing the colonial resources have forced exceptions 
by way of lower rates or by extensions of the free list in all the col- 
onies in which any degree whatever of " tariff personality " is allowed. 

^ According to the agreement of 1904 with Panama the United States leYies no customs 
duties in the Canal Zone, and according to an opinion of the Attorney General the Canal 
Zone Is not an American possession within the meaning of the tariff act of 1909. There- 
fore, its products when imported into the United States are dutiable as foreign products. 

95 For instance, in the conventional basin of the Congo, Morocco, Dahomey, the Ivory 
Coast, Samoa, Korea, 1910-1920, and the Philippines, 1899-1909. 

90 For instance, in French India, Timor, St. Pierre and Miquelon, French Oceania. 

9"^ For instance, Somalia. 

98 For instance, Prance. 



INTRODUCTION AND SUMMAEY. 43 

These lower rates mean smaller preferences if the products of the 
mother country enter free or at fixed percentage of the usual duty, 
while the placing of an article on the free list abolishes the preference 
entirely. With the establishing of specific duties or of different pref- 
erences on different articles the differential is sometimes increased 
even though the duty be lowered. 

Vil. Kates and Preferences in Coloniae Import Duties — Com- 
parative Summary. 

Enumerated above, the different features of colonial tariff policy- 
import duties in colonies, export duties in colonies, treatment of 
colonial products in the home markets, intercolonial trade, naviga- 
tion restrictions, and finally discriminations by means other than 
tariff' preferences — may now be referred to in succession, with the 
object of instituting comparisons between the different colonial tariff 
systems. 

METHODS OF COMPARISON. 

Comparisons of the amount of discrimination involved in the 
preferential features of colonial tariff systems can be made only with 
difficulty. ^^ Four methods of comparison may be used: (1) In some 
cases the average rate of duty collected upon all imports or upon 
dutiable merchandise from the mother country and from foreign 
countries can be deri^^ed from the trade and customs statistics; (2) 
for ail preferential tariff schedules (except for the relatively few 
cases in which both specific and acl valorem rates are levied upon the 
same article) the amount of the preference upon each classification 
can be expressed as a fraction or percentage of the full duty, and a 
summary statement can be made of the fractions most frequently 
found in the tariff' schedules; (3) to the extent to which ad valorem 
rates prevail in the schedules of various colonies the amount of each 
preference can be expressed as a percentage of the value of the mer- 
chandise, and these preferences may be summarized in general state- 
ments; (4) where specific rates prevail (and in other cases after the 
labor of converting ad valorem to specific rates on the basis of the 
average prices for a certain period) the preferences on particular 
items may be expressed in dollars or cents per pound, yard, gallon, 
or other unit of measurement, but generalizations from these specific 
preferences are difHcult. 

The first three of the above methods are seriously defective, and 
the fourth is suited to detailed studies of particular articles rather 
than to general comparisons of the tariff systems of a hundred 
colonies. The first method is useful in comparing revenue tariffs, 
but misleading in comparing preferential or protective tariffs. The 
highest rates, resulting in the general exclusion of foreign goods, 
may show the lowest average rates of duty upon those foreign prod- 
ucts which actually enter a country or colony. The second method 

ss DifficuUies arise from the complexity and diversity of schedules, from the use of both 
specific and ad valorem rates, and from the necessity of coordinating the tariff rates 
both with the trade figures to determine the relative importance of different items and 
with production figures to determine the extent to which they are protective rather than 
revenue duties. And see the next paragraph for the effect of duties so high as to exclude 
the trade of foreign countries. 

1857GG°— 22— 4 



44 coLo:NriAL tariff policies. 

of comparison is defective, since it is obvious that a fraction of a high- 
duty may be as effective a differential as the remission of the whole 
of a lower duty. For instance, in the Philippine Islands American 
l^rinting paper enjoj^s a remission of the whole duty of 10 per cent ad 
valorem; in Australia British paper enjoys preferences (according to 
the subdivisions of the classification) of one-half of 10 per cent (or 
6 per cent ad valorem), two-thirds of 15 per cent (or 10 per cent ad 
valorem), and two-fifths of 25 per cent (or 10 per cent ad valorem). 
Evidently in this case tliQ preference expressed by the fraction two- 
fifths is greater than that expressed by the fraction one-half; evi- 
dently also on an ad valorem basis both the preferences expressed hj 
the fractions two-thirds and two-fifths are as great as the preferen- 
tial remission of the v/hole of the duty in the Philippine Islancls.^^^ 

While this method of com.i)arison thus yields onl^^ very general 
results, it has the advantage that it can be used both for specific and 
ad valorem rates, and by a study of the tariff schedules alone ; it has 
been used, accordingly, in the following paragraphs. The third 
method of comparison is less defective, but is useless for a direct 
comparison between, for instance, typical British and French colonial 
tariffs. Further, no statement of the amount of a preference, whether 
expressed by a fraction of the full rate or on an ad valorem basis, or 
as a specific rate, is of more than relative significance without an 
examination of the ability of the mother country to compete in the 
article or articles in question. Especially in the case of ad valorem 
preferences whose amount changes with changes of price, a given 
rate may exclude foreign trade at one time and not at another; it 
may be prohibitive on some articles and in some colonies and prove a 
negligible barrier to the trade of foreign countries in other articles 
or in other colonies. A differential consisting of one-third of a low 
rate may be almost negligible; of a higher rate may be prohibitive; 
and of a still higher rate may be superfluous — even the preferential 
rate may be a prohibitive protective tariff, as is sometimes the case 
in the British Dominions, 

These general observations upon methods of comparison are in- 
tended to warn the reader against attaching an unwarranted signifi- 
cance to the comparisons which follow. 

OPEN-DOOR COLONIES— NETHERLANDS, BELGIAN, GERMAN, MOST BRITISH CROWN 

COLONIES. 

In reference to rates and preferences in import duties, the tariff's of 
the open-door colonies require little attention. They contain no pref- 
erences and the variations in their rates are not important. The rates 
are, as a rule, not protective,^^^ but are adjustecl to bring in revenue. 

100 rpjjg equivalence is not exact, because the valuation in the Philippine Islands is that 
at the port of origin, while in Australia it is that of the port of origin increased by 10 
per cent. The Australian rates cited are those of 1920. 

101 There are some exceptions, for instance, the recent Indian import duty on cottons 
and the export duty on raw hides and skins. British Guiana, Jamaica, Trinidad, tho. 
Windward and the Leeward Islands levied duties on coffee, cocoa, and sugar even before 
the war had increased the demand for revenue, and in some of them the protective force 
of these duties was reenforced by export duties on the raw product. All of them, how- 
ever. Imported refined sugar, and only Barbados and St. Vincent exported it. The rates 
on coffee and cocoa were as high as 6 cents a pound, and on sugar 3 cents a pound for 
refined and IJ for raw (British Honduras), but usually they were much less. It will be 
observed that these protective duties preceded the grant of' preferential rates to Canada 
and Great Britain, so that these were at that time open-door colonies. But see p. 321 In 
reference to Jamaican coffee. 



INTRODUCTION AND SUMMARY. - 45 

Social and fiscal considerations determine what articles shall be left 
free and which shall be most highly taxed. Usually alcoholic liquors 
(if admitted) are subjected to high duties, while agricultural, indus- 
trial, and mining equipment, necessary for the development of the 
country, is left free; and the general mass of consumption goods is 
subjected to rates ranging between TJ and 15 per cent ad valorem. 
There are not infrequentlj^ found, even in colonies where the home 
government is meeting annualh^ a deficit in the colonial budget, rates 
of duty not exceeding 10 per cent. The high rates on liquors are offset 
by excise duties ; the low rates on other commodities offer little pro- 
tection for the encouragement of local industries. The rates are not 
high enough to interfere seriously with consumption and the m.ain- 
tenance of the open door renders the tariff without influence on the 
direction of trade. 

ASSIMILATED AND PREFERENTIAL COLONIES. 

The assimilated and preferential colonies have tariffs designed to 
affect the course of trade, and the rates and the amount of the prefer- 
ence in their tariffs are matters of importance. The amount of the 
preferences may be described either relatively or absolutely— that 
is, a statement may either give the fraction or percentage of reduc- 
tion of duty enjoyed by national products or may name the amount 
(specific or ad valorem) of the two charges respectively or of the 
differential, i. e., of the difference between them. Employing first 
the relative method, that of fractions or- percentages, tlie situation 
may be taken account of briefly as follows : 

united States and Jarpan. — The colonies '°^ of the United States 
and Japan give to national products a .preference to the full extent 
of the duties levied in the colonies. In Porto Rico and the Japanese 
colonies the rates are those of the metropolitan tariff. In the 
Philippines they are lower, and in Guam and the Virgin Islands 
still lower. 

France. — In the assimilated colonies of France there are found by 
exception some import duties lower than those of the metropolitan 
tariff, and there are moreover additional duties — under other namxes^ — 
v/hich fall on French and on foreign goods alike, so that Hiq differen- 
tial in some cases falls considerabl}- below 100 per cent of the total 
charges paid. To illustrate : If an article pays a customs duty of 
10 francs and an octroi of 2.5 francs, the total paid on the foreign 
product amounts to 12.5 francs while that paid on the French product 
is 2.6 francs. The preference on this article is therefore an 80 per 
cent differential. If the additional duty were 10 francs, the total 
pa^nnents would amount to 20 francs and 10 francs, respectively, 
and the preference would be a 50 per cent differential. These addi- 
tional duties differ widely in the different colonies, falling in some on 
only a few articles, in others on more, and in still others on nearly 
all. The rates vary widely, sometimes exceeding the amount of the 
customs duty, though more frequently they are much less. Taking- 
all the import charges together, the differential in favor of French 
goods probably runs from 50 to 80 per cent, and even higher, in the 
different assimilated colonies. 

^"2 Excluding Samoa and Japan's leased territories. 



46 COLOXIAL TABIFF POLICIES. 

In the preferential colonies of France, the tariffs of Senegal and 
Guinea contain a clifierential in favor of French imports which 
amounts to seven-twelfths (58.3 per cent) of the duty upon articles 
not enumerated, and this may be taken roughly as the characteristic 
rate. The numerous classifications of textiles have specific duties 
with preferences on the whole somewhat greater than the fraction 
named. Other important articles (dutiable at higher rates) have 
differentials relatively smaller — on liquors, tobaccos, sugar, salt, 
mineral oils, anns, and powders the differentials are from one-eighth 
to one-half. In the complicated schedules of Oceania the widest 
diversity exists, but the most characteristic rates are 12 per cent upon 
French products with 8, 10, or 13 per cent additional on foreign 
goods, so that the differential is from two-fifths to a little more than 
one-half of the total charges collected. In their preferential colonies, 
therefore, the French give to their own products differentials which 
scarcely exceed one-half of the total charges levied; and the differ- 
ence between the assimilated colonies and the preferential colonics 
is both in the percentage of the preferences and in the height of the 
rates upon which the differentials are reckoned. 

In the colonies of those countries which do not pursue a policy of 
assimilation, there is greater diversity both as between different sys- 
tems and within the colonies of single powers. 

Portugal.- — Except for the preferential colonies of the United 
States, where the preference is one hundred per cent of the duty, the 
percentage of preference on national goods is highest in the Portu- 
guese colonies: In Mozambique, Guinea, and Portuguese India, 50 
j)er cent; in the Cape Yerde Islands, 80 per cent; amd in the other 
preferential colonies, 90 per cent. In Mozambique, however, there are 
many items specifically scheduled on which the preferential is much 
greater than 50 per cent, as is also that on wine in Portuguese India. 
Some of the differentials on wine and tobacco exceed 90 per cent, and 
on the whole that figure may be taken as the characteristic Portuguese 
preference. 

Spain.—lri Fernando Po and Guinea the general preference is one- 
third of the 15 per cent duty — that is, Spanish goods in Spanish ships 
pay only 10 per cent ad valorem. But on textiles, ready-made cloth- 
ing, boots and shoes, coal, jewelry, and wines other than sparkling, the 
preference is the whole of the specific duties. Other alcoholic bever- 
ages receive no preference, while on beer, powder, arms, tobacco, and 
petroleum the preference is from 60 to 80 per cent. Considering the 
comparative importance of these enumerated articles on which the 
preference is 50 to 80 or 100 per cent, the average preference in this 
colony can scarcely be estimated at less than 50 per cent. Spanish 
Morocco and the Canary Islands are under the open-door regime, bat 
the latter has had since 1914 a differential duty of more than 2 cents 
per pound in favor of Spanish sugar. 

Italy. — The Italian colonies must be treated individually. In 
Eritrea, Italian goods pay at the rate of only 1 per cent; foreign 
goods pay, as a rule, 8 per cent, with 10 per cent on cottons and 15 
per cent on linen, sugar, and oils. The preferences thus range from 
874^ to 93-J per cent. In Somalia the preference amounts to 93^ per 
cent on articles not enumerated, and ranges from 33J to 90 per cent 



INTEODUCTIOK AND SUMMARY. 47 

on enumerated commodities, except that there is no preferences''-^ on 
arms, tanned skins, leather goods, mats, sesame oils, and manufac- 
tures of wood. Seventy per cent may be considered the charac- 
teristic preferntial rate.^^* In the tariff of Libia there are fewer 
varieties of preference, but it is not easy to determine or define what 
are the amounts. The only open preferences are those on textiles 
and on sugar, which commodities pay preferential specific surtaxes 
in addition to the uniform 8 per cent ad valorem duty. As the specific 
surtax remains a fixed sum and as the ad valorem duty, of course, 
varies in amount with variation in the price of the commodities, it is 
obvious that with an increase in price the relative importance of the 
surtax in making up the total of the charges will decrease. At the 
time when the preferential w^as imposed, the preference on Italian 
sugar was roughly one-half of the total duty on the foreign product, 
while that on textiles was perhaps, generally speaking, less than one- 
third. The rise in prices since 1914 decreased the relative propor- 
tions. There is also a concealed preference, indefinite in amount but 
apparently approximating 50 per cent on many classes of Italian 
goods, granted by means of undervaluation at the customs. Making 
a rough generalization, it may be said that the Italians grant Italian 
products a preference of about 90 per cent in Eritrea, 70 per cent in 
Somalia, and about 50 per cent in the much more important colony 
of Libia. 

BHtish Crown Colonies.— The general rates of preference in the 
West Indies are simple fractions of the duties ordinarily levied : In 
Trinidad, Guiana, Barbados, one-half; in British Honduras, the five 
Leeward and the three Windward Islands, one-third ; and in Jamaica 
and the Bahamas, one-fourth.^^-^ In Cyprus the reduction to prod- 
ucts of the Empire is two-fifths, one-third, or one-sixth. Thus minor 
fractions characterize the preferential tariffs of the British depend- 
ent colonies, in contrast to the larger differentials found in prefer- 
ential tariffs of the colonies of other countries. (For Fiji see p. 371.) 

British Dominions. — Of the four great self-governing Dominions, 
South Africa gxants the smallest preferences to products of Great 
Britain and the sister Dominions. The tariff schedule contains 
30-odd items upon which the duties are specific, and on these the 
preference ranges from one-fifth to one-thirteenth of the full rate. 
Ad valorem rates of 15, 20, and 25 per cent are levied on a great 
number of manufactured articles, and upon these the preference is 3 
per cent ad valorem, or from one-fifth to one-eighth of the full duty. 
There is also a long list of articles — 74 items— which are dutiable at 
3 per cent, if of foreign origin, but free under the preferential 
schedule. On the other hand there is a list of 54 items which enter 
entirely free, and upon which there is, therefore, no preference. 

In Canada the rate of preference to British goods has been some- 
what altered from the one-third at which it was placed in 1900, but 
the departures from this fraction are not wide ; the preference rises to 

i«3 The nonprGferential items pay 10 per cent regardless of origin ; both the duty and 
the absence of preference are for 'the protection of native industry. 

104 This is the rate on cottons, which make up one-half of the total imports. The 
differential on spices is 33 g per cent ; otherwise the smallest is 50 per cent. 

103 The fractions named are those specified in the agreement of 1920 with Canada, except 
that the Bahamas, in ratifying tne agreement, voluntarily increased the preference from 
one-tenth to one-fourth. 



48 COLO]SriAL. TAEIFF POLICIES. 

one-half only upon a few items dutiable at 5 and 10 per cent, respec- 
tively, in the two schedules,^^*^ and on a number of items it is only 
one-hfth. A considerable number of articles have no preference, 
since they are free from all sources, or, less frequently, they have 
only one rate. The articles free from Great Britain but dutiable 
from other sources are very few and dutiable at only 5 or 10 per 
cent."^ 

. In Australia the preferences upon articles dutiable at ad valorem 
rates are Terj similar to those of Canada. In a few cases the pref- 
erence amounts to one-half, but usually it is two-fifths, one-third, or 
one-fourth, except for some items otherwise dutiable at 5, 10, or even 
15 per cent, which are free under the preferential schedule. Upon 
items dutiable at specific rates the same and similar fractions prevail ; 
but, e. g., upon brandy, gin, and rum the preference is one shilling 
per gallon, which comes to onl}' one twenty-eighth to one-thirtieth 
of the duty levied upon the foreign product; upon cigars the pref- 
erence is one-eleventh; and on cigarettes, one twenty-second. On 
other tobacco, sugar, and many miscellaneous items there is no pref- 
erence. (Kates and differentials have been further increased in 1921.) 

Xew Zealand has less extensive schedules than Australia and 
lower rates. The preferential reduction found most frequently is 
one-third, but there are a few exceptions where the preference is as 
high as two-thirds, and a greater number in which it is a fraction 
smaller than one-third. On the other hand, there are a larger num- 
ber of items than in Canada or Australia upon which the ordinary 
duty is 10 or even 20 per cent and which are admitted free from the 
British Empire. (But see p. 778 for tariff of Xov. 3, -1921, ) 

Outside of South Africa, where the preferences are much smaller, 
the characteristic preference of the Dominions is evidently one -third, 
with the entire remission of duty on a small number of items duti- 
able chiefiy at low rates. 

The fraction one-third is less characteristic of the preferences found 
in certain British Crown Colonies, but it is characteristic of the dif- 
ferentials introduced in 1919 in the tariff of the United Kingdom, 
and while the chancellor of the exchequer. Austen Chamberlain, was 
not then ^* propounding the general tariff policy " of the country, he 
stated that one-third was '* what I may call the general Empire rate, 
so far as a general Empire rate exists." 

ABSOLUTE AMOUNT OF PRSFEEENCES. 

Up to this point the amounts of the preferences have been referred 
to in term^s of fractions or percentages of the rates of duty on for- 
eign products. By this criterion the preferences of the United 
States and Japan rank easily first, as these countries mauitain in 
their assimilated and preferential colonies differentials of the whole 
of the charges levied. After them, in descending order, come the 
colonies of Portugal, France. Italy, Spain, the British Dominions, 
and the British Crown Colonies. *^ This method of indicating and 
comparing the amounts of the preferences is comparatively the easier. 

106 There is one item dutiable at rates of 15 and 80 per cent. 

i<" Except that certain vessels, and the bags, barrels, or other containers in which salt 
is imported, are dutiable at 25 per cent if of foreign origin. Wines are dutiable at uni- 
form specific rates, but there is an additional duty of 30 per cent ad valorem on foreign 
■wines. South African wines pay only 25 cents a^ gallon. 



ijstteoductioi^" akd summary. 49 

but consideration based on determination of the absolute amounts of 
the preferences is much more important But it should be noted 
that a small differential on a standard eommoditj — for instance 
sugar or cheap cottons— is of much greater consequence than is a' 
differential of like amount or percentage on less standardized goods 
such as machinery, ready-made clothing, and large classes of manu- 
factured articles of types wherein articles of widely varying prices 
compete with each other. Fashions are of some importance,%ven in 
Africa, though it is generally understood that the natives of Africa, 
India, and Oceania show less discrimination in regard to quality 
and pay more conclusive attention to price than do purchasers in 
America and Europe. Again, where the preferences differ for dif- 
ferent articles it may be found that some even of the largest have 
actually no effect on trade, for the reason that even with this ad- 
vantage the industries of the mother country are not in position to 
compete, or that, on the contrary, foreign competition is nonexist- 
ent—as might be shown by comparison with neighboring neutral 
markets. In other words, even a general comparison of the abso- 
lute amounts of the preferences gives only rough results. For ap 
accurate determination of the effects of differential tariffs, a his- 
torical trade study, item by item, would be necessary. 

Without undertaking a detailed comparison of the height of the 
schedules in the various colonial tariff systems, it appears that on 
the basis of the absolute amounts of preference the order in which 
the systems have been ranked above would have to be somewhat 
changed. The United States, Japan, and France all have high pro- 
tective tariffs, and, with some exceptions in the French colonies, the 
rates of their national tariffs apply in their assimilated colonies.-'^^- 
The French tariff rates are higher than those of the Portuguese colo- 
nies, where most of the rates range from 5 to 20 per cent, so that the 
absolute amount of the preference is considerably greater in the 
French assimilated colonies than in the Portuguese, where, moreover, 
the preference is less than the whole amount of the duty. The great- 
est absolute preferences are found, therefore, in assimilated colonies, 
and in regard to them the preferences granted by France, Japan, and 
the United States would rank in the same order as that in which 
their national tariffs would fall if arranged according to the height 
of their rates, respectively, ^ 

Among the preferential colonies (as distinguished from the assimi- 
lated) the Philippine Islands have apparently the highest rates of 
duty, and as the preference there is the whole amount of the duty 
the differentials are obviously greater than those which prevail in 
the British Dominions or in the colonies of Italy, Spain, Portugal^ 
and Great Britain. The British Dominions also have high rates of 
duty; of the rates found with some frequency in their schedules the 
maxima are 25 per cent in South Africa, 35 per cent in Canada, 37^ 
per cent in New Zealand, and 45 per cent in Australia.^^^ In the 
Australian tariff of 1920, out of 583 differential items, the differen- 
tial on 367 items is 10 per cent and on 136 items 15 per cent ad va- 
lorem. Assuming an equivalence of the items, the average differen- 
tial comes to about 11.5 per cent. The Canadian and New Zealand 

108 rj.y^Q charges levied under names other than customs duties lessen the figure for the 
percentage of preference accorded in general to French products but do not affect tlie 
absolute amount of that preference. 

los Practically the only higher ad valorem rates are those on spirits. 



50 COLONIAL TAEIFF POLICIES. 

prefereiitials, which average about one-third of the full duties on 
the preferential items, probabb/ average under rather than over 10 
per cent ad valorem. The Italian colonies appear to have duties 
lower on the whole than those of the Spanish colonies of Fernando 
Po and Guinea, whence it is a question whether the larger percentage 
of the preference in the former is as important as the smaller per- 
centage in the latter. 

The various rates of the different Italian and Portuguese colonies 
are hard to compare, but the Portuguese reach higher maxima, and. 
as their differentials average higher in proportion their preferences 
are probably higher than those of Italy. The British Crown Colo- 
nies, in which the differentials are only one-fourth to one-half of the 
moderate rates of duties, have evidently the smallest discrimina- 
tions in favor of the mother countr^^ On the basis oi the absolute 
height of tlie differentials it would appear that the assimilated colo- 
nies of France, Japan, and the United States should be grouped, 
followed in descending order by the Philippine Islands, then by the 
Portuguese preferential colonies, the British Dominions, the prefer- 
ential colonies of Italy and Spain, and finally by those British Crown 
Colonies which employ preferential tariffs.. 

VIII. Kates and Preferences in Colonial Export Duties — 

Summary. 

Before the war export duties had been general^ dropped from 
European fiscal S3^stems. They are forbidden by the Constitution 
of the United States, and those which were inherited from the Span- 
ish regime in the Philippines were abolished in 1913 and are now 
forbidden by the organic law of August, 1916.^^" Japan abolished 
the Korean export duties in 1919. ^^''^ Many of the older British Crown 
colonies and. Dominions have no such duties, and there are other 
exceptions, but otherwise expor-t duties are found as a regular part 
of the European colonial system. There was a tendency for these 
duties to disappear with the development of the colonies, but the 
financial requirements of the war interrupted this tendency, and led 
to the restoration of a considerable number of export duties and to 
increases in the rates of others. 

PURPOSES. 

Export duties on raw materials have a protective effect upon the 
industries using those materials somewhat the same as the effect of 
import duties levied upon the competitive finished products. In very 
few cases, however, does it appear probable that protection for local 
industry was an object in imposing export duties in colonies. Export 
duties are frequently laid upon articles where there is no further 
industrial process to be protected; for instance, on bananas, tea, and 
polished rice. They are frequently laid without distinction upon 
articles in different stages of manufacture; for instance, hides, raw 
or tanner.^^^ 

no ijq^e Qj^iy export duties in the American colonial system are those of the Virgin 
Islands. Their rates have been continued temporarily from the Danish regime, except 
that on sugar, which has been raised. 

iioa But see p. 445. 

^11 In the (German colonies, particularly German East Africa, care seems to have been 
taken that the duties should have no protective effect. The rate of 15 per cent on ivory, 
on horns, and on some shells, hides, and skins was Imposed also upon articles manufac- 
tured from these materials, and the specific or smaller ad valorem rates on sugar cane, 
woods, matweed, and palm leaves were likev,'ise imposed upon the manufactured products. 



INTRODUCTION AND SUMMARY. 51 

Further, official statements abound declaring that the purpose of 
these duties is fiscal. The rates are usually too low to have much 
protective influence, and when financial situations permitted^ export 
duties have frequently been lowered or abolished. 

In certain cases, however, a protective purpose is avowed or is 
clearly evident from the circumstances. The recent differential ex- 
port duty of 5 and 15 per cent upon the export of raw hides and 
skins from India — the tanned article being free — is for the purpose 
inter alia of protecting two industries which were greatly stimulated 
or injured during the war.'^^^ In Somalia raw hides and wood pay a 
10 per cent export duty, while tanned hides and manufactures of 
wood pay only 1 per cent.^^^ 

Conservation is sometimes an object of an export duty, though this 
end is perliaps more frequently sought by prohibition. The prohibi- 
tions enforced by Canadian Provinces against the exportation of lum- 
ber and wood pulp secure both protection and conservation. The 
exportation of cows and heifers is frequently made dutiable or pro- 
hibited, with the object of building up the local herds. Export duties 
are also levied in connection with the inspection and gracling which 
is done to raise the average quality and better the reputation of the 
article exported, Angola has a heav}^ duty on the exportation of un- 
cleaned coffee, while in French Oceania the duty on vanilla is rather 
in the nature of an inspection fee."* 

RATES. 

The rates of export duties are generally low as compared to those 
of import duties levied in protective tariffs. Few export duties ex- 
ceed 10 per cent ad valorem and they average much less than that. 
But in Zanzibar cloves, in Kenj-a and Nyasaland, ivory, and in 
Mozambique and Angola, several products are dutiable at from 20 
to 30 per cent. The East Coast of Africa from the Sudan to Mo- 
zambique has almost exclusively ad valorem duties, but the British 
and French colonies of West Africa have general^ specific duties, 
as have the British West Indies, Ceylon, Fiji, and some others. 

DIFFERENTIALS. 

Differential features do not appear so frequentl}^ in export as in 
import duties. The open-door colonies naturally have no such differ- 
entials, nor are such generally found in the preferential colonies. In 
the Portuguese colonies alone may they be said to constitute a 
national policy. More or less extensive use of them, however, is found 
in certain individual colonies of other powers—in French Indo- 
China, in Spanish Fernando Po, and in Italian Somalia."^ In cer- 

^'^ India is one of the world's greatest sources for hides and skins. There has always 
been a local tannins industry, but great quantities of foreign leathers and leather goods 
are regularly imported. During the war Government orders gave a great stimulus to the 
tanning of hides, but the tanning of skins was prohibited. Protection was thought neces- 
sary to maintain the one industry and to revive the other. (See p. 352.) 

"3 And on these latter and on leather goods generally there is an import duty of 10 per 
cent without the usual differential in favor of Italian products. 

^-* Sep Commerce Reports, Jan. 7, 1921, pp. 120-123, for the grading and standardization 
of exports from the Philippines. 



52 COLOIS^IAL TAEIFF POLICIES. 

tain British colonies a few isolated items are found subject to differ- 
ential export duties. Indo-China is an important French colony, but 
it is only one among twenty ; tlie Spanish and Italian colonies named 
are of small importance. The French preference is limited to goods 
transported directly ; the Spanish preference to goods shipped in 
Spanish vessels. The Portuguese duties and the British are, there- 
fore, those that are important, the Portuguese because they cover 
most of the colonial field, the British because, with the exception of 
those in the Federated Malay States, they are recent, and because 
they indicate a tendency toward a monopolistic policy in the use of 
raw materials. The differential part of these British duties is ap- 
plied unless guaranties are given that the next step in the manufac- 
ture of the article will be taken within the Empire. Their rates 
were intended to be prohibitive. (But see pp. 338, 341, and 343=) 
The smelting of the tin and the crushing of the palm kernels are 
thus restricted to the British Empire, But no tariff restrictions have 
been imposed upon the tin or the palm-kernel oil. 

The differential is the whole of the export duty in Indo-China '^^' 
and in Fernando Po. The differential on raw hides is in Somalia 
one-half of the 10 per cent duty, and in India two-thirds of the 15 
per cent duty; i. e., 5 and 10 per cent ad valorem, respectively. The 
duties on tin-ore and palm kernels are preferential surtaxes on pre- 
viously existing, nonpreferential export duties. 

In Indo-China the export duties are very small. In Fernando Po 
the duty on cocoa is nearly 1 cent per pound. Except for one or tv/o 
prohibitive British duties, the rates are highest in the Portuguese 
system; the differentials on coffee and cocoa from -Sao Thome and 
Principe come to about 2 cents per pound. In Angola and Mozam- 
bique several duties of 20 per cent or more are found. Since the 
increase of the differential in Mozambique in 1916 and the decrease 
in Angola in 1920, the characteristic differential is 50 per cent in 
force in those colonies and in the Cape Verde Islands. In Sao Thome 
and Principe the differentials are greater, but the minor possessions 
have no discriminatory export duties.^^^ 

It will be seen that these rates make the amount of the differential 
in the case of the Portuguese colonies approximately as much as the 
total duty exacted in the colonies of other countries. Certain of 
these differentials are limited to goods transported in national ships, 
notably upon products exported from Mozambique, Sao Thome -and 
Principe. In these cases, produce exported to foreign ports in Por- 
tuguese vessels also receive a preference but at a much smaller rate — • 
10 per cent of the duty in Mozambique and about one-third of the 
duty in Sao Thome and Principe. 

"5 The peculiar Philippine system was abolished in 1913. Under this system the rebate 
on exportations to the United States consisted of the amount of the duty payable accord- 
ing to the tariff schedule of the United States, On manila, on which here was no duty 
in the United States, the rebate was the whole of the export duty. Cigars exported from 
the Philippines are now paying 1.5 cents a thousand, the receipts to be expended for adver- 
tising Manila cigars in the United States. 

lie pqi- the nonpreferential additional duty on Indo-Chinese I'ice, see p. 167. A decree of 
July 2, 1921, imposes .5 per cent ad valorem upon copra and trocas shell exported from 
New Caledonia to non-J'rench destinations. (B. T. J., Aug. 11, 1921.) 

117 From the major colonies a few articles may be exported free regardless of destination. 



INTEODUCTION AiSTD SUMMAEY. 53 

IX. Intercolonial Trade. 

Outside the British Dominions and the British West Indies, which 
have determined their own special tariff relations with each other 
and with the other British colonies, the general rule is that inter- | 
colonial trade is treated on the same basis as trade with the mother | 
country. In some cases foreign products reexported from, one colony 
to another pay in the second the difference in the rates of duty, if \ 
the second has the higher rates. Assimilated colonies, being within ! 
the tariff barriers of the mother country, naturally have free trade j 
with each other, while open-door colonies naturally levy duties on j 
intercolonial trade as on all other. In the French colonial system j 
the rule of intercolonial free trade is extended to all the colonies.'^^ ' 
So, also, in the United States : As Porto Eico is within the national 
tariff walls, its products enter the Philippines free and Philippine 
products enjoy the same advantages in its markets/-® The Portu- 
guese colonies generally give the same preferences to products arriv- 
ing from or destined to other Portuguese colonies as they give to the 
trade with the mother country, but there are exceptions. 

Italian Somalia gives special rates to four products of Eritrea, but 
of these that on coffee is only 8 per cent against 10 per cent on foreign 
coffees, while the Italian product enters at 1 per cent. Among the 
Spanish colonies is found the only instance outside of the British 
Empire of a colonj^ granting to another colony a favor which is not 
extended to the mother country. The Canary Islands levy upon 
Spanish products (except sugar) equally with all others, but they 
grant preferential rates to the coffee and cocoa of Fernando Po, the 
differential being about 2 cents a pound on cocoa and somewhat 
more on coff'ee. The open-door colonies of Great Britain and Hol- 
land have, as those of Germany had, no special provisions for inter- 
colonial trade and levy duties thereon at the same rates as upon any 
other imports. Belgium having only one colony has no intercolonial 
trade. 

The BHtish Eonpire. — In the British Empire the preferential tarv- 
iffs established in 1903 by New Zealand and in 1920 by Cyprus werei 
made immediately applicable to all products of the Empire. In cer-'^ 
tain other cases preferential rates granted primarily to Great Britain 
or to Canada have been extended to portions of the intercolonial 
trade, freely or after negotiating special arrangements. Canada ex- 
tended her preferences to New Zealand in 1904 (reciprocating New 
Zealand's action of the previous year) and to the British West Indies 
(without return from 1898 to 1913) and to most of the other British 
Crown Colonies from_ time to tim.e (1898-1913). 

Trinidad in 1917 extended her preferential schedule to the whole 
Empire, and in several other instances, mainly in 1920-21, West 
Indian Colonies have extended their preferences beyond the text 
of their agreements in respect to the rate of the preferences or the 

us pqj, tj^g exception in regard to French India, see p- 219. This freedom of trade among 
the French colonies refers only to customs duties, not to octrois and consumption duties. 
Te<?hnically, therefore, it covers even the colonies in which the open door is guaranteed 
by treaty inasmuch as they levy no " customs duties " in the French sense, but only tiiose 
other duties wliich fall equally on goods from alt sources. , , ^ .«= 

"9 Products of the Virgin Islands and Samoa, which are not within the national tariff 
walls, are dutiable in the Philippines as foreign goods, but products of Guam are exempt 
by act of the Philippine Legislature. (Act No. 2779, approved by the President, May t>. 
proclaimed and in force, June 2, 1918.) 



54 



COLONIAL TAEIFF POLICIES. 



number of favored products or the parts of the Empire to whose 
products the preferences were granted. With these exceptions, 
New Zealand, Cj^prus, and to a lesser extent Canada and some of the 
West Indies, the intercolonial trade of the British Empire does not 
rest upon the basis of the preferences granted to the mother country, 
except in so far as special agreements have been concluded, agree- 
ments which may include special concessions. These special conces- 
sions are normail}^ ^^° extended immediately to the mother country 
and to other Dominions or colonies entitled to preferences; but as 
they relate to articles in which the parties to the agreement are par- 
ticularly interested, such extension is relatively unimportant. The 
West Indies have made agreements only with Canada, and Aus- 
tralia ^^^ only with South Africa, otherwise the intercolonial trade 
of the Dominions and the West Indies generally receives the benefit 
of preferential rates, as may be seen in Table 9. In this summary of 
the imperial preferences of the British Empire the dates are those of 
the introduction and the chief revisions of the preferential rates and 
the preferences which have been extended only after negotiation and 
agreements are indicated by "Agr;" 1906-7 and 1912-13 indicate 
agreements which were negotiated in one year and became effective 
in the following j^ear. 

Table 9. — Tabular view of British Empire preferences. 



Preferences granted — 


To 
United 
King- 
dom. 


To Canada. 


To New 
Zealand. 


To Aus- 
traha. 


To South 
Africa.-. 


To British 
Westlndies. 


To some 
oral! 
other 
Crown 

Colonies. 


B"' Canada 


1898 

1900 

1904 

^ 1915 




1904 




! 1898 

! 1912-13 AgT 
1904 Agr. 1920-21 Agr 

1 


1898. 
1907. 
1913. 




[1903 

BvNerv Zealand. . A 1907 

[1917 


i The whole empire. 


By South Africa 


1903 
1996 
1915 


1904 Agr. 


190^7AgT. 


1906 Agr. 












Bj- Auatralia 


1907 
1908 
1911 
1914 
1920 








1906 Agr. 




• 


By British West Indies a . 


1913 1912-13 Agr. 
1920-21 1920-21 Agr. 












T>^ ttt^h^^ Tr^•■.^«-•^^T^^ imo 

















By United Kingdom,1919 
By Cyprus, 1920 
By Fiji. 1922.. . 



The whole empire. 



a The colonies which rotified the agreement of 1912 were Barbados, Trinidad, British Guiana, Grenada, 
St. Lucia, St. Vincent, Antiqua, Dominica, Montserrat, and St. Cln-istopher-Nevis. The agreement of 
1920 has been ratified by all the parties tiiereto except Bermuda, whose legislature has declined to ratify. 
Some of the West Indies haye extended their preferences to other West Indian Colonies, or to the whole 
Empire, but these details are omitted from the table. See chapter on the Crown Colonies and India, 
p. 363. 

120 xiie exceptions are the special concessions of New Zealand and Australia to South Africa. 

J2! Australia's concessions to South Africa were limited. (See p. 784.) 



INTKODUCTION AIv^D SUMMARY. 55 

X. Treatment of Colonial Products ix the Home Market. 

GENERAL OBSERVATIONS. 

The differential treatment of colonial products in the home market 
of a colonial power does not present to the other industrial nations 
problems of the same character and magnitude as do the differential 
import and export duties in the colonial markets. This is due to the 
nature of the products of the colonies, the relative fewness of the 
protective duties levied upon them, and to the difference in the 
effects of such duties from those of duties on manufactured products. 
In so far as duties are levied upon colonial products in the home mar- 
ket, and are effective, it is the competing colonies rather than the 
mother countries which are interested. 

Colonial exports are generally raw materials or foodstuffs. In ^ 
most countries these are on the free list or are subject only to very low \ 
duties^ and consequently as a rule important preferential reductions i 
of import duty in favor of colonial products can not be made in the 
mother country. But there are three classes of exceptions, and, since \ 
colonies so frequently export a limited range of products, for some \ 
colonies the exceptions are much more important than the rule. 
First, some of the products, particularly of the semitropical and non- 
tropical colonies, are the same as those of Europe, and such products ; 
may be affected by duties levied for the protection of agriculture. ) 
The tropical colonies also are interested in the protection accorded \ 
to beet sugar and tobacco. Second, even upon articles which it does ' 
not produce, the mother country may impose duties with the specific 
object of protecting the market for colonial products (French duty 
on rice, Portuguese on rubber). Third, the tropical foodstuffs known 
in Europe as " colonial products "—tea, coffee, cocoa, vanilla, spices- — ■ 
are usuall}^ subject to revenue duties which are high compared to the 
usual rates of protective duties, sometimes even exceeding 100 per 
cent ad valorem. 

France and Algeria afford a striking example of the first excep- 
tion, Algerian exports may be divided into two classes : First, wines, 
cereals, animals, vegetables, and fruits ; and second, ores, phosphates, 
fibers, hides, cork, and some others. The first class generally en- 
counter protective tariffs on the Continent of Europe, but they enter 
France free under the protection of the French tariff on similar 
foreign products; the second class may also enter France free, but 
in competition w^ith similar products from all other sources, like- 
wise free, while most other markets are also open to these products. 
The result is that the great bulk of the first class goes to France, while 
the larger part of the second class goes to foreign countries.^^^ 

The tropical colonies are generally most interested in the duties 
on " colonial products." These products are usually highly taxed in 
all markets and, as the duties are not usually protective of home 
interests,^^^ the chief opposition to granting a preferential reduction 
is apt to come from the officials of the treasury. On the other hand, 
the rates of these duties are usually so high that even if a full exemp- 
li This is the result in this case ; it is of course not meant that in all cases those 
colonial exports which receive a preference in the mother country find that their chief 
market while the nonpreferential exports go largely to other countries. The more rapid 
development of the minez-al resources of Algeria has led to a decrease in the proportion 
of exports to France. 

123 Except in the case of sugar and tobacco, whose claim to inclusion with " colonial 
products " may be disputed. 



56 COLOXIAL TAEIFF POLICIES. 

tion is not granted to the " colonial products " a reduction, of the 
duty gives a preference whose absolute amount is sufncient to give 
control of the trade. The British preferences reduce the rates by only 
one-sixth, as it was estimated that a greater reduction was unneces- 
sary. 

It should be noted, however, that the question whether the con- 
sumers in the mother country or the producers in the colony receive 
the chief benefit of the preferential rate depends mostly (if compe- 
tition be free) on whether the favored colonies supply or do not 
suppl}^ the whole demand of the mother country. If they do not, 
the producers are likely to receive most of the benefit, even though 
all other markets are free to the products in question. There may, 
however, be intermediate agencies which absorb much of the benefit, 
e. g., shipping companies in cases where the preference is granted 
only for products "transported in national vessels. The industrial 
nations as distinguished from their colonies have comparatively little 
direct interest in the tariff favors which their competitors give to 
their colonies= In so far as the colonial products are raw materials 
for manufacture, if the United States, for instance, admits them free 
from all sources, the preferential free admission by other countries 
of the same products from their colonies (importation from other 
sources being dutiable) gives these other countries no competitive 
advantage and may by limiting the sources of their raw materials 
give the United States an advantage. But the American market for 
foodstuffs may be slight!}^ narrowed, e. g., by the French differential 
duties on cereals and vegetable oils. 

Manufactured articles are exported in considerable quantities from 
no colonies except the British Dominions and India, and of the total 
export only a small proportion goes to Great Britain, Accordingly 
the present effect upon American trade of differential duties upon 
manufactures entering the markets of the colonial powers is ver^v^ 
small. The conclusion seems warranted that the preferential tariffs 
of the mother countries are without imm.ediate and direct effects of 
importance upon the commercial rivals of these countries. But such 
tariffs may have important effects in the long run. In so far as they 
are effective in creating a specially favorable market for colonial 
1 products, they stimulate the development of the colonies along cer- 
tain lines, and the competition of the favored colonies may eventually 
|become of importance. Secondly, tariffs rates which attract the 
^products of the colonies to tlie mother country build up direct ship- 
ping connections and give the exporters of the mother country an 
advantage in competing for the import trade of the colonies. 

•POLICIES OF THE COLONIAL POWERS. 

With due allowance for the differences in the character of the 
trade to and from the colonies, the policies of the different powers 
in regard to preferences to colonial products in the home market are 
fairlj^ consistent with their policies in regard to preferences in the 
colonial markets. In both markets there is a free list, which is at 
the same time nonpreferential for those articles whose exemption 
from taxation seems to offer a balance of advantage. In the colonies 
machinery and other aids to economic development are usually free. 



li^TTSODUCTIOI^ A5TD SUMMARY. 57 

while in the mother country it is raw materials which are free. 
Since " colonial products " are generally taxed, and since a trade 
study has not yet been made, it is impossible to say whether the 
countries which give a preference put a protective barrier about a 
larger proportion of their exports to their colonies than of their 
imports from those colonies. Colonies exporting " colonial prod- 
ucts '' receive greater preferential advantages than do those which 
export rubber, ivory, ores, phosphates, copra and other oil producers, 
wood, hides, cotton, jute, and other fibers. 

The countries which generally maintain the open door in their 
dependent colonies have granted no preferences in their home mar- 
kets except the few introduced by Great Britain in 1919, The powers 
which maintain preferential rates for their own products in the 
colonial markets have all granted certain favors also to colonial 
products in the metropolitan market, though these latter do not ap- 
pear to be so great as the former. The benefit of these favors is also \ 
made contingent in some cases upon transportation in national ves- ^ 
sels. Generally speaking, the favors to products of the assimilated 
colonies are greater than those to products from the colonies where 
the products of the mother country receive more limited ^^^ pref- 
erences. Thus colonial products from the assimilated colonies of 
France,"^^^ Japan, and the United States enter the mother country 
free. Among the products of the preferential colonies those of the 
American colonies alone enter the mother country entirely free.^^*^ 
The other preferential colonies, French, Spanish, Italian, and Portu- 
guese, as well as those colonies of France, Spain, and Portugal where 
by exception the open door is in force, receive for their products 
various favors short of entire exemption from duty. A special 
Spanish law enumerates and exempts most products of the Canary 
Islands, Rio de Oro, and Spanish Morocco, but Am.erican Sam_oa is 
the one open-door colony whose products are entitled to free admis- 
sion to the mother country, regardless of their nature/"^^^ 

Products of all the nonassimilated French colonies according to 
the law of 1892 paid the French minimum- duty, i. e., the rate paid 
by the same products from the most-favored foreign countries. Since 
1892 numerous preferences have been introduced, both by general 
modifications, such as that by which colonial products vfere exempted 
from the increases of rates in 1910, and by specific exemptions, par- 
tial or entire, for certain products of certain colonies. The Protecto- 
rate of Morocco is, however, still treated for tariff purposes as a 
foreign country. ^^'^ 

The generarrule for the Portuguese colonies since 1871 has been 
that their products enter Portugal on payment of one-half of the 
ordinary duties, but since 1892 this reduction has been limited for 
most of the colonies to goods transported in Portuguese vessels. By 
exception, a few articles enter free. As the Portuguese tariff levies 



^^ See note on d. 72. What is here meant is that the free admission ot colonial prod- 
ucts, as in the United States, France, and Japan, is a greater favor than the partial 
ex-emotion from dntv, e. g., in Portugal. But a statistical examination of the colonial 
trade' under prevailing rates of dutv might show cases In which the partial exemption 
vvas pf greater importance than the entire exemption granted to products ot other 
colonies. j_. ^. ■ • t„ ■« 

125 For fiscal reasons France long maintained important exceptions, but smce Jan. i, 
1914, these exceptions have been reduced in number and they are now confinefl to sugar 
Jin ri DPDtiPT* 

126 In the case of the Philippines various limitations on this freedom were in force until 
1913. 

^^ See Chapter III, p. 205, 



58 COLONIAL TARIFF POLICIES. 

duties on raw cotton, hides, rubber, and some other items, and very 
high duties on coffee, tea, and sugar, these preferences were, before 
the war, of considerable importance, particularly those on coffee, tea, 
sugar, and raw cotton, preferences vvhich came to about 4 cents, 20 
cents, 3J cents, and 1^ cents per pound, respectively^ 

From Spanish Guinea most of the colonial products actually ex- 
ported enter Spain free with the exception of coffee and cocoa, which 
receive differentials of about 3 and 6 cents per pound, respectively.^^^ 
Cocoa, however, constitutes 98 per cent of this trade, so that the 
characteristic preference is a differential not unusuall}^ high on a 
percentage basis but Yevj high in absolute amount. Practically all 
the products of Eio de Oro, Spanish Morocco, and the Canary/ Islands 
enter Spain free. 

The Italians have granted tariff favors only to imports from 
Eritrea. About a dozen articles enter free from that colony under 
the protection of duties levied on similar products of all other origins. 
Perhaps the most important item (wheat) was removed from the list 
b}^ the law of April, 1915, though at the same tim.e Eritrean cattle 
were given a small preference by the imposition of a special duty on 
them by weight instead of by head. 

Preferences in the home mxarket are closelj^ related to differential 
export duties in the colonies, and the tvro must be considered to- 
gether. But they are not interchangeable, and although their effects 
are likely to be cumulative if both are in force at the same time, their 
separate and individual effects maj^ be different. For instance, a dif- 
ferential import duty in Great Britain upon palm kernels would have 
no effect either upon the British crushing industrj^ or upon exporta- 
tion from the West African colonies as long as West Africa remained 
the chief source of supply and the German and other large markets 
were open. A differential import duty in Great Britain upon the fin- 
ished product (the oil), if high enough, would transfer the crushing 
industry to Great Britain to an extent sufficient to supply at least the 
local market ; ^^^ while the differential export duty in the colony, if 
the rate proves to be high enough and if it is not offset by counter- 
measures in other countries, will transfer to Great Britain the crush- 
ing industry for the whole supply from the British West African 
colonies. The benefit of a differential export dut)^ in a colony is 
likely to accrue to consumers or manufacturers of the mother coun- 
try; the benefit of the mother country differential import duties is 
likely to accrue to the colonial producer. In the case of the Portu- 
guese colonies, where differentials both in the colonial export duty 
and in the home import duty run through the whole system, it would 
appear that the effect of these duties is cumulative and that the high 
rate of both differentials renders the total differential higher than 
any found in any other system. 

In conclusion, the policies of the different countries in regard to 
the differentials affecting trade from the colony to the m.other coun- 
try may be summarized thus : Belgium and the Netherlands main- 
tain preferences neither in the export duties of their colonies nor in 
the import duties of the mother countr3^ That v\-as also the policy 
and practice of Germany. Great Britain allowed no differential 

128 25 per cent and 58 per cent of tbe ordinary duty. But see p. 5G2 for recent changes, 
^'-* Or it would drive the consumers to the use oi .su^bstitutes. 



INTRODUCTION AND SUMMARY. 59 

export duties in her colonies until one appeared in 1903 : a few others 
have been added during the war ; but in the home market no prefer- 
ence was extended to colonial products until the summer of 1919. 
Eritrea enjoys free entry to the Italian market for a dozen of her 
products, and several products of Somalia, including the most im- 
portant, have differential export duties. But Libian exports to Italj'' 
have received no favors. None of these powers, therefore, has smy 
thoroughgoing policy of favoring importations from its colonies. 

On the other hand, Spain grants free importation to nearly all 
the colonial products actually imported, and on the chief exception- 
cocoa from Fernando Po — there is a large import differential re- 
enforced by a considerable differential in the colonial export duty. 
The Portuguese preference in the home market is generally 50 per 
cent of the high duties in force, and this is reenforced by a compre- 
hensive system of differential export duties in the colonies. France 
and Japan grant free entry to the products of their assimilated 
colonies and France grants to the other and less irnportant colonies 
favors of considerable importance ; but she limits differential export 
duties to Indo-China, and there the rates are low. The United States 
alone grants free entry to the products both of its assimilated colonies 
and of its other possessions : the United States ^^^ and Japan have 
abolished export duties in their colonies. In respect, therefore, to 
trade from colony to mother countr3^ the powers are divided into 
those which give few or no preferences to imports from their colonies 
and those which have relatively complete systems of large differen- 
tials. In this case Italy is found with the nonpreferential powers, 
otherwise the grouping is the usual one. The imports from the 
colonies are favored chiefly by exemptions, partial or entire, in the 
home market. Portugal alone has a comprehensive sj'Stem of export 
preferences. 

XI. Preferextial Tariffs in Favor of National Shipping. 

The scope of this report does not call for a study of the general 
policies pursued by the nations in regard to shipping. Certain 
points, however, which relate to colonial trade have been noted, and 
may be summarized here. 

As already explained, where tariff favors are limited to goods 
transported in national ships or transported directly from the place 
of origin, this limitation is imposed for the benefit of the merchant 
marine and offsets rather than supplements the favors conferred on 
colonial trade. For in general an^^ limitation or condition attached 
to a favor operates to decrease the value of the favor; and the 
mere fact that a shipping restriction is impo>sed indicates that at 
least at the time of its imposition it was believed that a part or 
all of the colonial trade would find it more advantageous to use other 
than national vessels. Accordingly, a policy devoted to the stimula- 
tion of colonial trade calls by implication rather for freedom in the 
choice of transportation routes and agencies than for restrictions 
on them, and those countries which impose navigation restrictions 
do so because they foster their shipping with even more zeal than 
their colonial trade. It is evident, however, from the fact that ocean 

^^'^ Except iu the Virgin Islands. 
185766°— 22 5 



60 COLONIAL TAKIFF POLICIES. 

freights for even the longest commercial routes are normally only 
a fraction of the value of most commodities, that tariff favors may 
easily be large enough to determine the course of the trade in spite 
of such shipping limitations as are likely under normal conditions 
to be attached to them. 

National policies in regard to shipping may be distinguished as 
follows : 

1. The trade between the mother country and its colonies and the 
intercolonial trade may be open to all vessels without discrimination 
(Great Britain, Netherlands, Belgium, and Germany). 

2. This trade may be open to vessels of all nationalities but duti- 
able merchandise may receive the preferential tariff rates only when 
it is transported " directly" from the country of origin (France and 
British Dominions and Colonies). 

3. This trade may receive preferential tariff rates only if carried 
in national vessels or may receive additional preferential reductions 
if so carried (Portugal). 

4. This trade may be restricted to national vessels independently 
of tariff regulations (Spain, and in part of the United States, Por- 
tugal, and Japan). 

As the open-door colonies have no preferential tariffs, their ship- 
ping regulations have not been made the object of special investiga- 
tion. Even after the introduction of certain prefei-ences in Great 
Britain and in some of the Crown Colonies, the British have im- 
posed no shipping restrictions upon the coastwise trade of Great 
Britain, upon the trade between Great Britain and the colonies, or 
upon the intercolonial trade. The Dominions regulate their own 
coastwise trade and have their own shipping laws. Belgium and 
Italy do not, and Germany did not, restrict to the national flag the 
shipping engaged in the colonial trade, though they all grant or 
granted subsidies, subventions, or some kind of indirect aid.^^^ 

The Netherlands allow the vessels of " reciprocating countries " ^^^ 
to engage in the trade between the Netherlands and their colonies. 
In the Dutch East Indies 80 ports are open to general trade and in 
the ports of territories not under direct Dutch adjninistration foreign 
vessels lanj engage in the coasting trade ; but the right is reserved 
to the Dutch Government to forbid this coasting trade to " ships be- 
longing to (registering from) the realm in Europe or the Dutch East 
Indies." ^2^ 

Except Italy, all the countries which systematically ^^* grant pref- 
erences in their colonial trade pursue a restrictive policy in regard 
to shipping engaged in that trade. Most sweeping are the restric- 
tions of those countries which prohibit, by general laws regardless 
of tariff preferences, all use of foreign vessels in colonial trade. 
These countries all limit coastwise navigation to national vessels. 

131 Only one instance has been encountered in the course of this study in the way of a 
shipping restriction in the colonies of these countires ; a virtual monopoly of harbor rights 
in German Southwest Africa was granted to a German steamship company under the 
guise of regulating the loading and discharging of vessels. 

^'•'^ Apparently this means colonial powers which permit Dutch vessels to engage in the 
carrying trade between the mother country and its colonies, and also noncolonial powers. 

123 Low No. 477, 1912. In addition to the ports open to general comnierce there are 
" inland harbors " open only to Dutch and native vessels, but " the governor general is, 
under pressing circumstances, empowered to open the excluded coas-ting-trade ports to 
ships already permitted the entry into the g-eneral ports for specific trips in carrying 
specified cargoes." 

!'■* Excluding Great Britain, in whose dependent colonies preferential tariffs- are the ex- 
ception rather than the rule. 



liNTRODUCTION AND SUMMAilY. 61 

The United States assimilate trade to and from Porto Rico with 
coastwise trade, but owing to lack of shipping this rule has never 
been applied to the Philippine Islands, and by the merchant marine 
act of 1920 such application was postponed until Feb. 1, 1922,^^^^^ 

Japan restricts her trade with Formosa to Japanese vessels, but 
the coastwise trade of Korea and its trade with Japan have been left 
open to all comers.^^** 

Spain restricts the traxie between the mother country and the 
colonies to Spanish vessels, and in addition grants preferential tariff 
rates upon imports made directly from the colonies in Spanish ves- 
sels, i. e., the tariff reduction is used to build up direct connections 
with the colonies and is not granted to colonial products brought to 
Spain in Spanish vessels unless the voyage is direct within the mean- 
ing of the laws and regulations upon that subject- 
In the Portuguese colonial trade a great variety of regulations are 
in force. Foreign vessels have been allowed to participate since 1877 
in the coasting trade of Mozambique; since 1880 in the trade between 
Macao, Timor, Portuguese India, and Mozambique; and since 1881 
in the trade between Portugal and these four colonies east of the Cape 
of Good Hope.^^^ Except for the routes just enumerated, foreign 
vessels are excluded from the intra-imperial trade of Portugal; that 
iSj from the routes between Portugal or a colony west of the Gape^"^ 
and other Portuguese territory of the same region, to which may be 
added tlie coastwise trade of Angola ^"^ and the interisliand trade of 
the Cape Verde Islands. But while foreign vessels are admitted to 
certain trade routes within the Portuguese Empire, as well as to the 
trade between the ports of the empire and- non-Portuguese territories, 
the use of Portuguese vessels in these routes is encouraged by differ- 

185 Section 21 of the merchant marine act reads as follows : " That ft-om' and after 
February 1, 19^2, the coastwise laws of the United States shall" extend to the island Ter- 
ritories and possessions of the United States not now covered thereby, and the [shipping] 
board is directed prior to the expiration of such year to hav« established adequate steam- 
ship service at reasonable rates to accommodate the commerce and the- passenger travel 
of said islands and to maintain and operate such service until it can be taken over and 
operated and maintained upon satisfactory terms by private capital and enterprise : Pro- 
vided, That if adequate shipping service is not established by February 1. 1922, the Presi- 
dent shall extend the period herein allowed for the establishment of such service in the 
case of any island Territory or possession for such time as may be necessary for the 
establishment of adequate slilpping facilities theretov : Provided further, That until Con- 
gress shall have authorized the registry as vessels- of . the United. States of vessels owned 
in the Philippine Islands, the government of the Philippine Islands is hereby authorized 
to adopt, from time to time, and enforce regulations governing the transportation of 
merchandise and passengers between ports or places in the Philippine Archipelago : And 
provided further, That the foregoing provisions of this section shall not take effect with 
reference to the Philippine Islands until the President of the United States, after a full 
investigation of the local needs and conditions, shall, by proclamation, declare that an 
adequate shipping service has been established as herein provided and, fix a date for the 
going into effect of the same." (Statutes at Large, 1919-1920, p. 997.) 

1"" This was in accordance with the pledge made at the time of the annexation of'Kbrea 
(1910) to maintain tlie status quo for ten years. Tliis period has expired but no infor- 
mation is available to show that the Korean coastwise trade and' the Korea-Japan trade 
has been closed to foreign vessels. 

137 The law of 1881 opened all trade between Portugal and her colonies, but in 1885 the 
intra-imperlal trade west of the Cape was again closed: to foreign vessels. Strictly the 
trade between Portuguese India and Mozambique was not open^ until 1881; 

i^'* West African timber, however, which enters free^ need not come in Portuguese ves- 
sels, and since April 28, 1919, the same rule applies to the maize admitted free from the 
colonies. Cotton, which likewise receives greater favors than the usual 50 per cent 
differential, must be transported in vessels making regular trips between Portugal and 
the colonies. This last distinction is found also in application of the differential ton- 
nage duties of the Cape Verde Islands, and Portuguese Guinea. If all the regular lines 
connecting Portugal and the colonies are Portuguese, this discriminates: against Portu- 
guese and other tramp vesselsv 

""Foreign vessels generally have the right by treaty to discharge part of their cargo 
in one port and carry the remainder to other ports. A cargo transshipped for the coast- 
wise trade of Angola may be transferred only to a Portuguese vessel and: there are re- 
quired of foreign vessels formalities which are not required from Portuguese vessels 
making such transshipment. Foreign vessels are subject to differential shipping dues in 
Timor and the African colonies ; the differentials were increased in August, 1921 (decree 
7618), 



62 COLONIAL TAEIFF POLICIES. 

ential tariffs. Thus the 50 per cent differential in the import duties 
levied in Portugal on colonial products is limited to those transported 
in Portuguese vessels. The duties levied upon exports from the 
colonies, particularly^ those imposed in 1916 or later, not only limit 
the differentials on exports to Portugal to shipments made in Portu- 
guese vessels, but also grant a smaller differential to exports to for- 
eign countries in Portuguese vessels. Preferences of this kind are 
found in the export duties of Mozambique, Sao Thome, and Principe, 
and in the coffee dutj^ of Angola.^^^ The maize of Angola pays an 
export duty whose only differential is in favor of Portuguese ships 
regardless of their destination. It will be seen that the favors to 
Portuguese vessels affect chiefly the trade from the colonies to Portu- 
gal, being found both in the import duties of Portugal and in the 
export duties of the colonies. There are few shipping restrictions 
in the import duties of the colonies. 

In the French system '' direct " importation from the country or 
colony of origin rather than transportation in French vessels is the 
characteristic requirement for all imports which pay rates lower than 
those of the general (maximum) tariff. This requirement is enforced 
both in France and in the assimilated colonies, and is not limited to 
intra-imperial trade but is part of the general commercial policy of 
France.^^^ Colonial products, other than industrial raw materials, 
are dutiable at high rates, under the French general tariff and the rule 
which restricts lower rates to merchandise imported directly, effec- 
tively prevents these products from being imported from French 
colonies through European entrepots. The same object is sought in 
regard to imports of raw materials, with a few exceptions, from all 
non-European sources by means of special surtaxes on the importa- 
tion of non-European products through European ports.^*^ This lat- 
ter provision, especiall3^ is a counter measure to the Spanish and Por- 
tuguese preferential tariffs, which are designed to make the ports of 
those countries entrepots for the products of their colonies. The rule 
of direct importation operates in favor of French shipping (see p. 
159) and it is replaced by a legal prohibition upon foreign shipping 
only in two cases: In the Franco-Algerian trade,^^^ which is con- 
sidered part of the coastwise traffic of France, and in the importation 
of those products of Tunis, which receive tariff favors in France. 
Except in the Algerian trade, therefore, the French shipping restric- 
tions are found exclusively in connection with tariff favors. 

Foreign vessels engage freely in the trade between France and the 
colonies other than Algeria and in intercolonial trade, and, except 
on certain importations from Tunis, if they ply " directly " between the 

^^o Exports from Mozambique in Portuguese vessels receive a reduction of 50 per cent 
of the export duties if the destination is Portugal and of 10 per cent for any other desti- 
nation. Coffee and cocoa from Sao Thome and Princip4 pay about one-third of the full 
duty if shipped to Portugal in Portuguese vessels, but if shipped elsewhere in the same 
vessels they pay about two-thirds of the duty. 

1*1 The " minimum " tariff rates (i. e., the rates of the second column of the tariff, not 
the special reductions granted to products of French colonies) have been granted to many 
countries by treaty, but always with the limitation that these rates are to be enjoyed only 
by merchandise transported directly from the country of origin to France. " Directly " 
has received both in the foreign trade and in colonial trade various modifications — e. g., 
importation through another country also entitled to the minimum tariff rates is allowed. 
Specific exceptions are also made — e. g., transshipment at San Francisco for French 
Oceania is permitted. 

i« Products of the Cape Verde Islands imported through Funchal, Madeira, are au 
exception. 

"^ This restriction was suspended in 1915, and remained suspended until OcL 25, 1921. 



INTRODUCTION AND SUMMARY. 63 

ports — practically confining themselves to this trade — the merchan- 
dise which they carry is admitted on payment of the same duties as 
that carried in French vessels. However, many colonial products 
in France receive no tariff favors, either because they are on the free 
list regardless of origin or because they are listed with a single rate 
of duty, which is paid alike by the products of the nonassimilated 
colonies and those of foreign countries. These goods may be im- 
ported into France in foreign vessels either directly or indirectly 
without a tariff penalty ;^** and actually the participation of foreign 
vessels in the trade between France and her colonies is confined 
almost wholly to these articles. As all products of France enter her 
colonies free, and as the general free lists of these colonies are lim- 
ited, foreign vessels are practically excluded from the trade in that 
direction. 

Canada, Australia, and the British West Indies limit preferential 
rates to products transported " directly " from some other British 
country. The exemptions of the United States-Philippine trade are 
similarly limited. But the United States and Canada consider ship- 
ments in bond through contiguous countries as " direct." 

Port and tonnage dues and fees for various services, such as pilot- 
age, sanitary inspection, and measurements, are sometimes levied on 
a differential basis. Differentials in these dues, however, are rare 
outside of the Portuguese colonies, which generally discriminate 
either between national and foreign ships or, regardless of nation- 
ality, between tramp vessels and those which give regular services 
between the colony and Portugal. 

XII. Discriminations in Minor Duties and in Methods of Valua- 
tion AND Payment; Concealed Preferences — Summary. 

While this study is directed primarily toward the preferences ex- 
plicitly set forth in the laws and exhibited in the schedules of the 
customs tariffs, numerous other methods and instruments of dis- 
crimination against foreign trade have necessarily received some at- 
tention. These may be classified as (a) open discriminations either 
in the minor duties and fees collected at the ports of entry or in the 
requirements for the valuation of goods and for the payment of 
duties or in the formalities required in the transactions, and as (&) 
concealed preferences or "jokers" of various sorts, such as discrimi- 
natory classifications and preferential selection of dutiable articles. 

An open discrimination may be defined as one in which some such 
word as " foreign " or " national " is used, so that the text of the 
law or regulation reveals the existence of the differential treatment; 
but where the name of a particular foreign country or city is used 
in connection with specific articles it will generally be found that 
the name has come to indicate a type of article, and is used in the 
tariff schedule as a trade name, and not as a geographical term, 
e. g., Mocha coffee, Panama hats, Italian cloths, Brussels carpets, 
Nottingham lace, and China ware. And even where the place name 
has not become a trade name, and where the whole of the product 

"* Except that if imported indirectly nearly all products pay the surtax of indirect 
importation. The most common rate of this surtax is 3.60 francs per 100 kilos. (At 
normal exchange about 33 cents per 100 pounds.) 



64 GOLO:^IAL TARirr POLICIES. 

comes from one country, the separate designation may be defensible 
if the product has distinct characteristics and differs noticeably in 
quality and value from similar products of other countries. A con- 
cealed discrimination is one which results from the actual applica- 
tion of rules and tariff schedules whose phraseology and construction 
give no appearance of partiality, i. e., which use no terms denoting 
nationality or location. These concealed discriminations are revealed 
usually only by a comparison of the tariff schedules with the exist- 
ing trade. For instance, it is found that the French limitation of 
tariff favors to colonial products transported " directly " differs in 
no great degree in its results from the provision found elsewhere 
that the transportation must be in national vessels. 

Classifications may conceal discriminatory treatment.^"^^ For in- 
stance, the division of wines into those valued at 6 shillings and more, 
and those valued at less than 6 shillings, may constitute an effective 
method of discrimination in favor of Australian wines, but it is not 
an open preference^ such as naming Australian wines specifically 
and separatel}^ in the tariff schedules and granting them a rate lower 
than that on other wines. Accordingly, a knowledge of the nature, 
value, and origin of the various products at least as intimate as that 
implied in the details of the tariff classification is necessary to render 
it possible to recognize which of these classifications are discrimi- 
natory and which of the discriminations are really warranted by 
differences in the character or value of the classes of commodities 
differentiated. Thus a duty upon mineral oils levied upon oil im- 
ported in containers, at a rate per gallon twice as great as that upon 
oil imported in bulk, discriminates against the former only in case 
the container is worth less than the oil contained, and in case im- 
portation in bulk is the method characteristic of national firms, and 
importation in cans is the method used by their foreign rivals.'^*^ 

Less effective as a discrimination in favor of national goods is the 
effect produced by selecting articles imported mainly from foreign 
countries or exports to foreign countries for taxation, or higher taxa- 
tion, and leaving the chief products exchanged between the colony and 
the mother country free or at lower rates. In so far as distinct classes 
of articles compete with each other, this discrimination may be of ad- 
vantage to national trade. For instance, if beer is dutiable at 29 
per cent and brandy at 185 per cent (as it was in German Southwest 
Africa) the consumption of French brandy is likely to be curtailed in 
favor of German beer. Where there is a greater difference in the char- 
acter of the articles, as, for instance, between cereals and meats, or silks 
and cottons, or cement and iron, the competition is, as a rule, not suffi- 
ciently direct to render this form of preferential classification effec- 
tive. 

In both these cases, moreover, the mere presence of a discrimina- 
tion does not prove any intent to discriminate, neither does it prove 

1*5 Discriminatory treatment means, in this instance, treatment wlilch clistinguishea 
national or colonial products for the purpose of assigning to them^ separate rat(?s in th« 
tariff schedules. The extent to which it may be considjered legitimate to classify cheaper 
wines separately and give them a lower tariff rate is suggested in the discussion on p. 359. 

146 rj^iie illustration is suggested Ity tlie Mesopotamian duty upon oils, which, it is ailea^d, 
discriminates against oils imported in containers, but which is, so the British assert, 
simply the result of the reduction of the ad valorem rate of 11 per cent to specific term^. 
It is evident, however, that any changes in the relative value of the oil and the container 
v^m affect in one direction or the other the equal operation? of the- specific rates as pre- 
viously fixed and nulFify in practice the impartiality? asserted, to: haye -been observed iu 
imposing the duty. 



INTRODUCTION AND SUMMARY. 65 

unfair discrimination. The discrimination may be justifiable on weli- 
establislied economic or moral grounds. The articles taxed may be 
those generally recognized as most suitable for taxation either for 
fiscal or for social ends, or the taxation certain exports and the 
exemption of others may depend upon the relative prosperity of the 
industries and their capacity for paying taxes. It might be found, 
for instance, that the new industries being established in a colony 
were in the hands of nationals and were sending their products to the 
mother country, while the well-established industries, whose products 
could afford to pay taxes, were those in wdiich the natives or for- 
eigners were chiefly interested The Algerian export duty on phos- 
phates, which are exported chiefly to countries other than France, 
may represent an effort to secure a revenue at the expense of the for- 
eign consumer, but it should be noted that the taxation of phosphates 
seems to be generally recognized as desirable by the exporting coun- 
tries.^*^ 

In quoting certain cases, therefore, where classifications of these 
idnds appear to discriminate against the foreigner, no judgment is 
intended as to the fairness of the practice. That can only be deter- 
mined by a detailed trade study, such as has not yet been under- 
taken, and by the establishment of standards of fairness which do 
not yet exist. 

Minor fees. — Minor fees on goods imported or exported, as dis- 
tinct from shipping dues, are frequently found under a considerable 
variety of names — octrois, consumption duties, municipal taxes, port 
improvement duties, commercial and industrial contributions, sta- 
titical duties, landing duties, etc. The comparatively important 
octrois and consumption duties have been discussed in connection 
with tariff rates. The designations of the other taxes call for no 
special explanation except perhaps the statistical duties. These are 
generall}^ levied in French, Italian, and Portuguese colonies on goods 
otherwise free, for the purpose of more easily enforcing the regula- 
tions for the declaration and recording of the statistics of merchan- 
dise imported and exported. Their rates are low, not exceeding 1 
per cent, or they are levied at so much per package, ton, etc., re- 
gardless of value. Certain of the Italian preferences include exemp- 
tion from this statistical duty, and there is a differential rate of 0.1 
per cent and 0.2 per cent on cereals and meat, etc., exported from 
Loanda, Benguela, and Mossamedes. Difl'erentials in these minor 
taxes are characteristic of the Portuguese colonies and are not gen- 
erally found elsewhere. Thus, the municipal tax in Lourenco 
Marques is 25 per cent of the duty, which, of course, increases the 
total amount of the differential. The commercial and industrial 
taxes in Mozambique do not generally exceed 5 per cent and these 
all contain small differentials. A further discrimination is found 
here in that for this taxation (though not for the customs duties) 
foreign goods nationalized and reexported from Portugal are still 
classed as foreign. In Angola the industrial tax is IJ per cent ad 
valorem on foreign goods as compared with 1 per cent on national 
products, and the fee for transferring goods to the customhouse is 
likewise differential — \\ real per kilogram against 1 reaL^^^ In 

"■^ Except the United States, which has no constitutional power to levy export duties 
ontside of the " unincorporated " possessions. 

i*« One real per kilo equals, roughly, 5 cents per 100 pounds. 



66 COLONIAL TARIFF POLICIES. 

Sao Thome and Principe, however, while the municipal taxes gen- 
erally increase the differentials in favor of Portuguese goods, on a 
few kems the discrimination is against Portuguese products and 
somewhat reduces the total preference. 

Valuation of mercJiandise. — There have been found in a few cases 
open discriminations in the valuation of merchandise, in payment of 
duties, and in customs formalities. The Canadian anti-dumping law 
contains both open and concealed discriminations in favor of British 
trade. It requires that merchandise dutiable at ad valorem rates be 
valued at the price for which it is comm_only sold in the foreign 
country whence directly imported into Canada. This rule discrimi- 
nates against indirect importations, and therefore, in the nature of 
the case, against the transit trade of the United States. For in- 
stance, spices sent from the East Indiees directly to Canada are 
dutiable according to their export ]3rice in the Orient. But the 
"same spices, reshipped from the United States to Canada, are 
dutiable according to the American market price, which is higher 
by the inclusion of pofits and other charges. Spices enter the 
United States free of duty, but on many articles the market prices 
used in Canadian customs valuations include a duty or excise paid 
on the article or some component part. The foreign countries which 
levy these charges, in order to prevent them from constituting a 
burden upon the export or reexport trade, usually grant draw- 
backs upon exports, and to that extent the reexported articles may 
be sold abroad at a price lower than that prevailing in the country 
of export — but in such cases the Canadian duties are assessed accord- 
ing to the higher (domestic consumption) price, not the lower (ex- 
port) price. This provision of the law operates to the advantage of 
free-trade Great Britain. Thus the law confers upon British trade 
an advantage not at first apparent; it includes also an open prefer- 
ence in its provision that sugar refined in the United Kingdom 
and all articles upon which excise duties have been paid in any part 
of the Empire entitled to preference shall be valued at the market 
price of the place of origin, less the drawback allowed on sugar, or 
less the amount of the excise duty. 

An unusual discrimination was in force in Portugal in 1903- 
1912, in the tare allowance on sugar imported in sacks. The allow- 
ance was: On colonial sugar, 2 per cent; on foreign sugar, 2| per 
cent if imported in double sacks and 1-J per cent if in single sacks. 

Depreciated currencies and exchange fates. — Since the armistice, 
exchange rates have had an important effect upon trade. Countries 
whose currencies had depreciated have not only, for that reason, 
afforded poor makets in which to sell, but they have imposed many 
restrictions upon imports, in the effort to raise the exchange value 
of their currencies by decreasing their adverse trade balances. On 
the other hand, these countries have been at an advantage in selling, 
in spite of the fact that their price levels (in terms of their own 
currencies) have risen more rapidly than those of other countries. 

Most colonies use the currency system of the mother country, or, 
at least, currencies whose value is fixed in terms of that of the mother 
country (e. g., Egypt and the Straits Settlements). This fact, 
combined with the intimate relation which usually exists between 
the financial systems of colonies and mother countries, generally 



intrgductio:n" and summary. 67 

causes exchange values of the currency of mother country and colony 
to fluctuate together, B}^ exception, inclej)endent currency systems 
are found in Canada and the British West Indies, and during the 
war the rupee — used in India, Ceylon, Mauritius, the Seychelles, 
British East Africa, and Zanzibar — broke from its moorings and 
pursued a course independent of that of the pound sterling.^^^ 

Owing to the intimate connection and the tendency of the two cur- 
rencies to rise and fall together, fluctuations of exchange are less 
lii^ely to disturb the trade between colony and mother country than 
the trade of either with foreign countries. The fall in the inter* 
national value of the currency of a colonial power makes it easier 
for foreign countries to buy both from the mother country and from 
the colonies, and harder to sell to them. It thus enhances the effective- 
nehs of differential import duties in the colonies. ^^^'^ But this effect 
has been partially offset by changes in methods of assessing duties in 
some of the countries or colonies which employ ad valorem duties, 
and assess the article upon its price in the principal markets of the 
country whence directly imported, a price which is necessarily ^^^ ex- 
pressed originally in the currency of that country. Before the war 
these countries in making these assessments converted at par the cur- 
rencies of the major European countries, ignoring the fluctuations, 
Avliich were always small. But since the war Canada, Australia, and 
New Zealand have adopted rules for conversion at approximate mar- 
ket rates, though Canada does not recognize depreciation in excess of 
50 per cent. In Canada and New Zealand the rule for conversion at 
market rates was not at first applied to currencies which stood at a 
premium. This operated to the advantage of American trade. But 
a much more important advantage accrued to the United States in its 
trade with Canada before the change in the conversion rule ; and be- 
cause of the importance of this trade and of Canada's numerous and 
hi^rh ad valorem rates, the condition during- the maintenance of the 
rule of conversion at par may receive some consideration. 

The Canadian currency system is quite independent of the British, 
and the depreciation of the Canadian dollar has been only about one- 
half that of the pound sterling, but has none the less been sufficient 
to stimulate American purchases and hinder American sales in that 
country. On the other hand, the greater relative fall of the pound 
sterling has enabled Canadians to buy to advantage in Great Britain. 
Until July 22, 1920, the Canadian customs, in making valuations, 
ignored the dislocation of exchange rates and converted foreign mar- 
ket values into Canadian dollars at par. Thus, when sterling stood 
at a discount of 25 per cent, the customs still assessed at $48.66 (Cana- 
dian) an article sold in Great Britain for £10, though the Canadian 
purchaser had paid only $36.50 (Canadian) for it. On the other 
hand, an American article which sold in the United States for $100, 
but which cost $110 (Canadian) to $115 (Canadian), was valued by 
the Canadian customs only at $100 (Canadian). In so far, therefore, 

^•'» See p 331 fn. In the latter part of 1920 it became difficult to finance the exports of 
Great Britain to Australia, and the British pound commanded a premium in Australia. 

]5o«And lessens the effectiveness of differential colonial export duties ; but of course 
specific import or export duties lose their effectiveness as the value of the currency 

The Ameri- 



1" Of course, the prices of contract saies may be expressed m ^y.^'^^e^ncyi ho Ameu- 
can law requires that invoices give the value m the currency of the countij of oxpoit, 
leaving it to the customs officers to make the proper conversion. 



68 coLo::^ix^L tariff policies. 

as the duties were ad valorem, the exchange rates, in conjunction with 
the rule of vahiation, operated to decrease by 10 per cent or more^^^ 
the duties payable upon imports from the United States, and to in- 
crease by 20 per cent or more those paj'-able upon imports from Great 
Britain, and by 100 per cent or more those upon imports directly from 
France or Italy/^^ 

These decreases to the advantage of American, and increases to 
the disadvantage of British trade perceptibly lessened the advantage 
conferred by the preferential schedules and at certain rates of ex- 
change wiped out altogether some of the preferences. For instance, 
with'the United States dollars at 10 per cent above and British 
sterling at 20 per cent below Canadian par — not an extreme case — 
Canadian purchases from the United States of articles formally 
dutiable at ^5 per cent paid in effect 31.8 per cent, while the same 
article bought in Great Britain, and dutiable at a preferential rate 
of, say. 25 per cent, paid in effect 31.25 per cent.^^^ In July, 1920, the 
rule was adopted of converting foreign prices at current rates of ex- 
change in so far as they were expressed in depreciated currencies. 
This removed the disadvantage under which British and other Euro- 
pean goods had suffered, and on May 3, 1921, the application to 
appreciated currencies of the rule of conversion at current rates re- 
moved the advantage previously enjoyed by American products.^^^ 

In the customs system of Mozambique, the requirement that pay- 
ment of customs duty be made in gold at a normal (mint) rate of 
exchange has operated in recent years largely to increase the differ- 
entials against foreign goods. The requirement is restricted to pa}^- 
ments of duties on non-Portuguese goods assessed on an ad valorem 
basis. Most of the duties, however, are ad valorem, and since gold 
stood at a premium of at least 40 per cent through several years, the 
rule has largely increased the discrimination against foreign goods. 

^- By the percentage by which Canadian dollars stood below par in the United States. 

1^ When duties of 20 to 35 per cent, such as are common in the Canadian tariff, were 
doubled, trebled, or quadrupled l>y the operation of this method of valuation they obvi- 
ously became prohibitive. This effect upon the trade of a country whose currency was 
greatly depreciated was avoided bv buying through Great Britain or from New York 
importers ; the valuation in the latter case became that of the market value in the United 
States, since that was the country whence directly imported into Canada. But the ad- 
vantage of this indirect importation was considerably lessened by American duties and 
by the operation of the Canadian " antidumping " duty, since the value for assessment 
in Canada is the value in the open markets of the country whence directly imported and 
not the value in bond. French goods from New York (even though they went through 
the United States in bond) were assessed at the selling price in that city, which included 
American duties and profi ts as well as freight and other charges, and on the amount by 
which this price exceeded the value of the article as landed in bond the " antidumping " 
duty was levied. The maximum rate of this duty is 1-5 per cent ad valorem. 

1^ This illustration shows the equalization of certain rates upon British and American 
products, and it follows that when sterling was at its lowest the British preference in 
this instance gave place to a slight preference upon the American article. But it must 
be noted that this result is dependent upon the fact that the illustration used a prefer- 
ential rate in which the preference was only a small fraction (two-sevenths) of the total 
duty. The same absolute amount of preference (10 per cent ad valorem) upon articles 
dutiable at lower rates was not wiped out with exchange at the rates specified. Thus 
the effective rates- levied upon goods formerly dutiable at 25 and 15 per cent were, with 
exchange at the rates indicated. 22.7.3 and 18.75 per cent, leaving a preference of nearlv 
4 per cent ad valorem to the British. In the extreme case of goods dutiable v/hen im'- 
ported from the United States, but free when imported from Great Britain, the amount of 
the preference was scarcely affected by the most extreme variations in exchange rates. 

155 The situation in Australia has been somewhat similar to that in Canada, but the 
differences should be noted. Australia uses the pound sterling, and ordinarily settles all 
its transactions through London, so that a divergence in the exchange rates of Australian 
and British sterling is rare. In applying the rule for the assessment of ad valorem 
duties, therefore, instead of a disadvantage to British importers and an advantage to 
American importers, as in Canada, there was a relatively larger advantage to the Ameri- 
cans, while there was nothing abnormal in the way the rule operated unon imports from 
Great Britain. In October. 1920, Australia followed Canada and New Zealand in adopt- 
ing the rule of converting depreciated currencies at current rates of ex<?hange, and at 
about the same time, as the result of a judicial decision, the same rule was applied to 
appreciated currencies. 



INTRODUCTION AND SUMMARY. 69 

Formalities. — The formalities required in entering and clearing 
goods are often vexatious and cause complaints from time to time, 
complaints which sometimes allege that the treatment received is not 
equal as between foreigners and nationals. The published regula- 
tions, however, show few or no open discriminations, except the re- 
quirement in the very forefront of the rules that all documents must 
be made out in the national language. This can hardly be put down 
as an unfair discrimination, and it operates against foreign traders, 
importers, and agents rather than directly against foreign goods. 

Concealed preferences. — A concealed preference may be defined as 
any classification or phraseology which avoids such terms as " na- 
tional " and " foreign," thus establishing a general and seemingly im- 
partial rule, but which none the less operates to the disadvantage of 
the foreigner. The discriminatory effect may have been unforeseen; 
if devised and intended to discriminate the clause may be called a 
" joker." The discrimination may be concealed in intricate phrase- 
ology or the subtlety may lie in the fact that different regulations 
must be compared in order to discover the effect. Concealed pref- 
erences may exist also in broad classifications and simple phraseology. 
Frequently the discrimination is discoverable only by a comparison 
of the law or regulations with the sources or destinations of the trade 
involved. Finally, concealed preferences may exist by administra- 
tive action either as part of an established and public policy, or by 
secret order, or by fraud. 

In general, any method of classification of articles and any manner 
of assessment of duties operates unevenly upon portions of the trade 
concerned. Specific duties fall with relatively greater force upon the 
cheaper varieties of an article, while ad valorem duties tend to 
restrict the market rather of the better qualities. In addition, specific 
duties may be levied by units of sale ^-'^' or by weight or other char- 
acteristics; and either specific or ad valorem duties may be levied 
upon goods as classified according to any of the differentia of the 
product. In every case in which similar products of different coun- 
tries have different characteristics the tariff classifications and the 
manner of assessment become of importance to traders. Since there 
is no general agreement and no established standards based either 
upon convenience of administration or upon equitableness as between 
manufacturers, any classification or manner of assessment is apt to 
raise complaints, from some source or other, that the duties are in- 
equitable. For instance, under the Spanish tariff cottons were duti- 
able in the Philippine Islands according to the weight of samples 
from which had been washed the minerals added by the manufac- 
turers to give body to the goods. American manufacturers con- 
sidered this unjust. In 1902 the basis of assessment was changed to 
that of the weight of the goods as imported. The change operated 
to the advantage of American manufacturers almost exclusively, for 
they are not accustomed to w^ eight their cottons. Again, in 1906 a 
classification was introduced by which there was imposed upon cotton 
piece goods produced on double width looms and then split a heavier 
duty than that upon similar cloth of the same width produced on 
single- width looms. This change operated to the disadvantage of 
British manufacturers, as it offset the economy of production on 

158 By the piece or head, yards of cloth, boxes of matches, etc. 



70 COLO]SriAL TARIFF POLICIES. 

their Tvicler looms. Both these classifications were made in general 
language and the effects were obvious only to those familiar with 
the technical processes of the textile industries. It is evident that 
neither of the changes made in 1902 and in 1906 violated the Spanish- 
American treaty of 1899, which established no standards and guar- 
anteed the continuance of no classifications ; the earlier change dis- 
criminated against a trade practice which may be characterized as 
none too reputable from the consumer's standpoint : the latter change 
was a protective measure based upon the theory of equalizing costs. 

In 1907 the tariff regulations of Somalia changed the basis of 
valuation by requiring the addition of only 20 per cent instead of 
40 per cent to the invoice value of goods whose valuation was not 
given in the official schedules of valuations. At that time and for 
at least some years thereafter these schedules omitted valuations for 
certain Italian products where the sam^e foreign products were evalu- 
ated, and the change thus reduced by one-seventh the amount of the 
duty payable on Italian cottons and some other items, with no cor- 
responding reduction on the foreign articles. 

Administration of the regulations. — Two cases of discrimination 
in the administration of laws or regulations, apparently impartial, 
may be given. In Libia Italian goods have been systematically 
undervalued to the extent of 50 per cent, more or less. This under- 
valuation rests on nothing to be found in the laws or in the regula- 
tions, so far as they are available here, but the practice can hardly 
have escaped the attention of the Italian Government. 

During the war trade and shipping were controlled very largely 
by administrative bodies guided only by most general grants of 
poAver by the legislative bodies. Since the cessation of hostilities this 
control has been considerably relaxed but in certain cases has been 
even extended. Thus at different periods since the armistice the 
importation of dyestuffs into India and other British colonies has 
been prohibited,^^^ except as licensed. Some of the orders to this 
effect contain no evidence of any intention to discriminate between 
British and foreign dyes, but the press in each case was able to state 
that " it was understood " that licenses would always be given for 
the shipment of British products. The preference here is obvious, 
though the amount is uncertain and likely to vary from time to time. 
Under a licensing system the future uncertainty is itself a factor 
considerably adverse to the foreign product, even though at any 
given time foreign dyes are being freely licensed. 

XIII. Effects of Preferextial Tariffs. 

The effects of preferential tariffs upon the trade between the 
colony and the mother country can not with any certainty be sepa- 
rated from the effects of other factors w^hich determine ithe course 
of trade. These other factors will be discussed below with par- 
ticular reference to colonial trade.^^^ The more intangible fac- 
tors, however, are relatively constant,^^® and, except where trade is 
affected by abnormal circumstances — wars, crop failures, rapid 

^57 Some of the prohibitions have been suspended. 

^^ See p. 72. 

IS* Most subject to variation, perhaps, is the expenditure upon public improvements. 
These expenditures are often sufficiently great to increase noticeably colonial imports from 
the mother country in a given year or series of years. Investments, improved shipping 
connections, and banking facilities may also lead to comparatively sudden increases of 
trade. 



Il^TEODUCTION AND SUMMARY. ^ 71 

changes of prices — changes in the previous course of trade devel- 
opment following immediately upon and in line with substantial 
changes in tariff rates may reasonably be attributed to the latter. 
But tariffs have long-run effects as w^ell as immediate results, and 
the statistical presentation of the subject is full of difficulties. No 
complete study has been made of the trade of the colonies which 
have differential tariffs, but certain general conclusions, both nega- 
tive and positive, have been reached. 

Negatively it may be laid down that certain general cornparisons 
can lead to no results or only to misleading results. Thus the gen- 
eral comparison of assimilated and preferential colonies as a class 
with open-door colonies as a class yields no important results. Most 
of the open-door colonies are or were possessions of Great Britain, 
Germany, Holland, and Belgium, and there were special reasons 
why the merchants of each of these countries largely predominated 
in supplying the markets of its colonies.^*^^ For instance, in 1913 
Great Britain supplied over thirty per cent of the imports of China 
and of Argentina, and evidently a country which supplied so large 
a proportion of the manufactures consumed in neutral markets 
could scarcely fail to predominate in the trade of its own colonies, 
except where geographical or other factors were very strongly 
against it, as in Canada and some of the West Indies. 

Similarly, a consideration of the total trade of a single colony in 
comparison with its tariff history may be quite misleading. The con- 
clusion has sometimes been drawn from the steadily decreasing per- 
centage '^^ of Canadian imports from Great Britain that the preferen- 
tial tariff has been of no advantage to British manufacturers and 
merchants. The conclusion is quite unwarranted. The gross totals do 
indeed show that Canada's preferential tariff has not offset the effects 
of the geographical advantage of the United States which has in- 
creased with the growth of Western Canada and Avith the develop- 
ment of American industr}^; but an examination confined to those 
products in Avhich there w^as in 1897, or has developed since, competi- 
tion between Great Britain and the United States shows that the pref- 
erential tariff of Canada has in many lines checked the decline of 
British trade and has in some given the British a virtual monopoly of 
the Canadian market. 

Positively, it may be laid down from general considerations that 
the tariffs enforced in the assimilated and in most of the preferential 
colonies can not fail to exert considerable influence on trade. In the 
assimilated colonies, the products of the mother country are pro- 
tected by the same rates as in the home market; in the preferential 
colonies foreign manufactures are commonly met by tariff differen- 
tials of ten per cent, twenty per cent, and of even higher rates. While 
in particular cases high rates may not divert trade from foreign coun- 
tries to the mother country, such systems of differential duties as are 
most commonly found to-day must have important effects. 

While a most detailed study would be necessary to determine — as 
far as can be determined statistically — the exact effect of differential 

i«o See pp. 38 (fn. 80). 74, and 91. , .. .. . 

^«i In the three years 1895-7 Canada imported less than twice as much from the TJnited 
States as from Great Britain (averagins $161,000,000 and $93,000,000, respectively), 
while in 1911-13, after a dozen years of imperial preference, the figure had risen to more 
than three times as much (averaging $403,000,000 from the United States and $122,000,- 
000 from Great Britain), and in 1918-19 to ten times ($747,000,000 and $73,000,000, 
respectively). 



72 COLONIAL TARIEF POLICIES. 

tariffs, some of tlie more striking tariff changes have produced effects 
which stand out clearly in the trade returns. Figures will be found 
in the chapters below showing the trade changes which followed cer- 
tain modifications of customs duties on cotton textiles in Somalia and 
the Philippine Islands.^*^- Similar figures might have been presented 
for Madagascar and other French colonies showii^g how the adoption 
of the policy of tariff assimilation in 1892-1S9T brought the trade of 
those colonies into the hands of French merchants. 

To conclude : From general considerations, from the striking trade 
changes which have followed certain outstanding tariff changes in 
competitive articles like cotton textiles and from the trade changes 
which are concealed in the totals of the Canadian figures, but which 
are revealed by their closer examination, it follows that differential 
tariff rates in the colonies of the large industrial powers are one of the 
most important factors in the trade of these colonies. Accordingly, it 
must be expected that if introduced in those colonies where at present 
the open door is maintained, differential tariffs would prove to have 
like results upon their trade. 

XIY. Factors Other than the Tariff iis^ Coloxial Trade. 

In the colonies, as elsewhere, the tariff is but one of the factors 
which determine the course and character of trade relations. Some 
of the " assimilated " colonies, offering to the manufacturer in the 
mother country the same protection that he receives in the home mar- 
ket, receive upwards of 80 per cent of their imports fi^om the mother 
country, e. g., Algeria and Porto Eico. But on the average the pro- 
portion is perhaps not above 50 per cent, which is a less percentage 
than is found in certain cases where there is no discrimination in the 
tariff rates, but where the political and economic relations of the 
colony with the mother countr}^ have been exceptionally close, e. g., 
Java and the Congo. 

In colonial markets the trade of foreign countries encounters the 
maximum of disadvantage in those cases where national goods enter 
free while other goods are subjected to the rates of the protective 
tariffs of the mother countries, applied in their entirety (as, for 
instance, in Formosa, Korea, and Porto Rico) or with relatively few 
exceptions (as, for instance, in the French assimilated colonies ).^^* 
But even in those cases foreign trade is not entirely excluded because, 
first, the mother countries can not supply all the products needed, 
or if the}^ do, they must in turn have oJDtained a portion of what 
they supply from abroad ; ^^* second, the colonial population, espe- 

i«- See pp, 409 and 597. 

183 This generalization is made on the basis of existing situations. Protection miglit 
be_ afforded in the colonies at rates higher than those of the tariffs of the mother coun- 
tries, in which case the disadvantage to foreisn trade would be- increased. On the other 
hand, free-trade countries like Great Britain or low-tariff countries like Belgium and 
Holland might assimilate the tariffs of their colonies to those of the mother country 
without subjecting to any disadvantage th^ trade of foreign countries. 

1^ In this case the trade of the colony with foreign countries is really greater than it 
appears m the figures. Foreign products which enter a colonv bv wav of th« mother 
country and which have paid duties there generally enter the colonies on the same basis 
as national products. Where the national products enter free, or pra<?tically .so. and the 
national tariffs are the same or not much higher than the colonial, foreign goods may 
find that their most convenient route to a colonv lies through the mother country. Ameri- 
can goods are reported to have entered Libia in this wav. aided by the undervaluation 
accorded to goods imported from Italy. It has been estimated that the Algerian customs 
lose one million francs- annually through the importation of goods via France. Pei-haps- 
in some cases this trade may be detected in the statistics of the transit trade af the 
mother country. 



IK^TRODUGTIOISr AND SUMMARY. 73 

cially the natives, may not be able to afford the varieties and quali- 
ties of goods which are produced by the mother country — as is con- 
spicuously the case in reference to textiles and many of the artich;s 
of luxury which France produces; and, third, the national tariffs 
do not exclude all foreign manufactures from the home market, and 
therefore can not exclude them from the colonies, in which certain 
conditions are comparatively favorable to the foreigner. When 
French, English, and German manufacturers attempt to compete 
with American it is evident that they will be at greater disadvan- 
tage in New England and Pennsylvania, where local manufactur- 
ers are put to relativel}^ little expense for packing and freight, than, 
for instance, in Porto Rico, Competition between American and 
Japane^ manufacturers in the Philippines offers a more effecti\^e 
example. The higher the freight rates in proportion to the value 
of a commodity the greater the effect of proximity as compared with 
that of tariff charges. This is illustrated in the trade of the United 
States with Canada and some of the West Indian islands, of Aus- 
tralia with New Caledonia, and in many less conspicuous cases. 
Closely related to geographical factors are effects of established 
shipping routes and lines of communication. 

The trade of certain countries in certain colonies is affected favor- 
ably and that of others unfavorably by historic connections, includ- 
ing settlement colonization. Thus the presence of the Dutch in South 
Africa, of Italians in Tunis, of Spaniards in Algeria and Porto Rico, 
is comparatively unfavorable to the trade of the counties which now 
govern those territories. In open-door colonies, where tariff discrimi- 
nation is no longer a factor, historic considerations may noticeably 
influence the coui^e of trade.^®^ 

For such reasons as these the mother country does not always 
dominate the trade of the colony, even though possessed of the ad- 
vantage of such protection as is deemed adequate for the protection of 
the home market. But these cases are exceptional ; the normal situa- 
tion is that which may be described advantageously in explaining 
wlij so large a percentage of the trade of open-door colonies is with 
the mother countries. As far as the tariff factor is concerned, open- 
door colonies are neutral markets, and the question is therefore one 
phase of the more general question why certain countries have so 
prominent a share in the trade of certain neutral markets. In politi 
cally independent neutral markets geographical factors are likely 
to prevail where they favor one great industrial country,^*'® but the 
colonies are usually distant ^^^ from the mother country, and political 
and sentimental factors are those which predominantly favor the 
mother country. 

i°3 In the ease of Mauritius and tlie Seychelles, now British, but a century ago French, 
t,he French share of the import trade in 1912 was 9.2 per cent in Mauritius and 1.5 per 
cent in the Seychelles ; but if the imports from the British Empire be excluded the 
French share of the remainder is found to be 45 per cent and 86 per cent for the two 
colonies, respectively : and if to the trade of France be added that of the French colonies 
the percentages of the French contribution are increased to 60 per cent and 95 per cent 
for the two colonies, respectively — a striking contrast to 5 per cent in Ceylon and 4 per 
cent in British East Africa. In the same year more than one-half of the total exports 
of the Seychelles went to France. 

"« Recently more than 90 per cent of Mexico's trade has been with the United States. 
The geographical is not the only factor — the American demand for sisal hemp is not due 
to proximity to Mexico. In the case of Canada geograjjhical and other factors give a 
predominant share of the import trade to the United States in spite of a differential 
tariff. 

^6^ The principal colonies which are nearer to the mother country than to its commercial 
rivals are Porto Rico, Korea, Formosa. Algeria, and Libia, and in all of them the mother 
country largely predominates in the import trade. 



74 COLONIAL TARIFF POLICIES. 

In the first place the acquisition of colonies has frequently followed 
a previously established dominance in trade. This was probably true 
of all the territories annexed by the British between the Napoleonic 
wars and 1914. In some of the German colonies both the missionary 
and the trader preceded the flag. Again, in colonies earlier acquired 
and where the open door now prevails, the present freedom of trade 
Avas established only after preferential tariffs or more effective meas- 
ures favorable to the trade of the mother country had long been in 
force. Thus in the days of the " culture system " the Dutch controlled 
the trade of Java almost absolutely; when the doors were opened 
the foreign merchant found the national products already popular- 
ized in the colonial market. 

Even in a newly acquired open-door colony, where the merchants 
of the mother country have never enjoyed a tariff preference, the 
action of the Government may be of considerable importance in influ- 
encing the trade. In the development of these colonies the programs 
of public improvements are (or ought to be) relatively heavy. The 
regular maintenance of the Government also requires supplies in con- 
siderable quantities and of kinds which are not ordinarily produced 
locally. These are usually purchased in the mother country.^^^ 
Trade follows the flag partly because official supplies lead the way 
and continue to furnish a nucleus around which the trade may grow. 

Shipping subsidies play an important part in colonial trade, and 
they are used b}^ the colonial powers generally .^^® 

16S French colonial railroads, if subventioned as they generally are. require a special 
dispensation to use any foreign material or to make their importations in other than 
French vessels. 

For the British Crown Colonies the Crown agents in London buy all the supplies not 
locally obtainable. A recent order directs them to buy in Canada whatever is not ob- 
tainable in Great Britain. In 1904-1906 the Crown agents expended an average of 
.$125,000,000 a year. Their staff, not including the consulting engineers, numbers over 
250 (Colonial Office List, 1920. p. XX). Under pressure from the colonial office the 
Government of Jamaica purchased in Canada locomotives which it could have obtained 
at a better price in the United States. (The Times Trade Supplement. Oct. 4, 1919.) 
Supplies for India are purchased by the stores department of the India Office. A com- 
mission recently recommended a change by which the buying should be transferred to a 
comptroller general of stores in India, who should obtain supplies locallly as far as pos- 
sible and then forward the balance of the requisitions to London. (Board of Trade 
Journal, Aue. 7, 1919, p. 177.) See page 380 for tho present source of the Government 
supplies In India. See Commerce Reports, Oct. 24, 1921, p. 491, in regard to the Crown 
Agents. 

Government supplies imported into the Gold Coast in 191 « were valued at $885,000, 
or 6.2 per cent of the value of the commercial imports. The Union of South Africa 
imported about $10,000,000 worth, or over 4 per cent of the total impoi'ts (in this case 
Government supplies are included in the figures officiallv published as the total trade). 
The same year Government Imports into Java and Madura Avere about $11,000,000. of 
which $3,432,000 were obtained in the United States (Commerce Reports, Feb. 3, 1920, 
p. 665). 

The Netherlands maintain at The Hague a centralized buying agency for their colonies, 
with a branch office in New York. 

Government stores are usually not included in the commercial statistics quoted, and 
the imports from the mother country are thus greater than the ordinary commercial 
figures show. 

An unusual Instance of Government control of trade is mentioned bv W. H. Hooker in 
"The Handicap of British Trade" (London. 1916). In speaking of the practical monop- 
oly which the Germans held on various articles of East African trade he savs : " In cloves 
only the Germans could not obtain a practical monopolv. as 25 per cent of the clove 
crop is the main source of Zanzibar's revenue, and British officials certainly could not, 
and did not hand their holding over to the Germ.ans' tender mercies" (p. 57). 

"" Yet there were complaints from French and British colonies before the war that 
German lines were giving better service than the national shipping and that trade was 
diverted in this way. The smaller the trade and the fewer the ships serving it the more 
important is this factor, which is greatly stressed, e. g.. in Italian discussions of the 
trade of Somalia. See Grosvenor M. Jones, Government Aid to Merchant Shipping (De- 
partment of Commerce, Special Agents Series, No. 119, p. 21) for subventions paid by 
certain countries to foreign shipping lines. 

Not all the Government regulations in regard to navigation, however, are in aid of 
trade. Some are to promote shipping and do so at the expense of trade relations 
between the colony and mother country. Thus the restriction of colonial trade to na- 
tional shipping may raise freight rates and tend to drive the colonial produce elsewhere 
and to give competitors a better chance in the colonv. For this, amona' other reasons, 
the American law extending the coastwise shipping regulations to the Fhilinpines has 
not been put in force. The French requirement of direct transportation for all products 



INTKODUCTION AND SUMMARY. 75 

Railroads have had a greater influence in increasing the amount 
of colonial trade and a smaller influence in controlling its direction 
than has shipping. But the east and west railroads of Canada have 
facilitated trade with Great Britain rather than with the United 
States ; and there is international railway competition for the trade 
of the Transvaal, Rhodesia, and the rich Katanga region of the 
southern Congo. The British Imperialists have emphasized cable 
communications and rejoiced in the laying of each "all-red" cable. 
Most of the powers have been promptly active in extending systems 
of wireless telegraphy in their colonies. The imperial penny postage 
rate, adopted by the most of the British colonies in 1898 and 1899, 
had its commercial aspect.^^^ 

Probably more important are the social-economic influences pro- 
moting trade between mother country and colony. First of all 
among these influences must be placed the possession of a common 
language. This bond is strongest in the settlement colonies ; but else^ 
where also the prevailing foreign language is that of the mother 
country, Avith some exceptions.^^^ If there is immigration, it is 
normally greatest from the mother country j"^ and in any case in 
all the dependent colonies there is a stream of officials, with fre- 
quently military and naval units, constantly tending to maintain 
in the colony the standard of living, the tastes, and the styles of the 
mother country. From tropical colonies, the permanent civil-service 
personnel, the missionaries and the planters practically all go home 
on leave periodically ; "^ and children are sent home at an early age 
and for long periods. The colonists settled in more healthful lati- 
tudes, maintain less regular and extensive intercourse with the 
mother country, but in many cases entertain a greater number of 
casual travelers from that country. 

From the earliest period of the modern colonial movement branch 
agencies, depots, or " factories " of large trading concerns have played 

benefiting by the minimum tariff may have a like effect in some cases. Mozambique 
attempts to guard against this by granting a differential export duty to products billed 
for Portugal in national ships only as long as these ships charge no higher freight rates 
than their competitors of other nationalities. Similarly, Sao Thome and Principe fixed 
a legal maximum of freight rates on cocoa and coffee for vessels whose cargoes received a 
preference in the export duty. 

1'° In 1906 Canada raised the postage rate on American periodicals to four times what 
it had been and reduced to one-fourth of the previous rate the charge on British periodi- 
cals. One of the objects was to reduce the American and increase the British advertising 
circulation In Canada. 

The war resulted in the doubling of the imperial postage rate. 

I'l Italian prevails in Tunis and^Malta, Greek in Cyprus, (pidgin) English in the Bis- 
marck Archipelago and in part of Kamerun. Until a few years ago all the official corre- 
spondence, records, etc*, in Egvpt were in Fi'ench, as the Journal Officiel continues to be. 
The Egyptian census of 1907 showed 14,500 French residents, 20,000 British, 35,000 
Italians, and 63,000 Greeks. On the Lower Congo, Portuguese was the dominant lan- 
guage before the founding of the Congo Free State (and perhaps is still), while the 
English, the French, and the Dutch had practically all the trade. 

1^2 In immigration into Canada the numbers from the United States exceeded those from 
the United Kingdom in 1908-9, 1909-10, and during the war, and were but little behind 
the latter in 1910-1913, but the American immigration included numerous Americanized 
Canadians and numerous un-Americanized Europeans. (Husband, W. W., in American 
Economic Review, Supplement, March. 1912, p. 79.) 

In East Africa, Asia, and parts of Oceania, Chinese and Indian immigration is having 
considerable effect upon commerce. In Zanzibar and Kenya and former German East 
Africa much of the trade is carried on in the East Indian Gujarat! language (Hooker, 
op. cit., p. 62). The Dutch East Indies were estimated in 1917 to contain 139,000 Euro- 
peans, and 833,000 Orientals, chiefly Chinese and Arabs. In the Straits Settlements and 
the Federated Malay Straits the native Malays outnumber the immigrant Indians only 
3 to 1 and are actually outnumbered by the Chinese. Numerous Chinese are found also 
in the other Malay States, especially in Johore and Kedah. In the Philippines the per- 
manent settlement of Chinese has been forbidden since 1902, but the Chinese outnumber 
the Americans and Europeans. In Guam 104 of the 220 permanent non-native residents 
are Japanese, and Japanese trade shows a large increase (1918). 

i'^3 In British West Africa officials and merchants usually stay only a year at a time; 
elsewhere the " turns " are longer, and many missionaries fetui'n only every seventh year. 

18576G"— 22 6 



76 COLONIAL TARIFF POLICIES. • 

an important part in colonial trade. Originally these were located 
in " unoccupied '' or in national territories, and it continues to be the 
rule that large trading firms tend to establish their branches first in 
the colonies of their own country. The same is true of banks, and 
much of the banking in colonies is carried on by branches of national 
banks."* These financial and trade connections with the mother 
country are very important in forming and maintaining trade 
channels. 

The investment of national capital is also very important. Invest- 
ment in railroads, for instance, leads not only to large orders for 
the initial equipment but also to a continued trade in materials and 
equipment for extensions, maintenance, and repairs uniform with the 
original installation.^'^ The immediate control of the purchase of 
supplies may remain with the capitalists in the mother country.^^® 
Orders are frequently sent to the mother country because the colonial 
civil and mining engineers, architects, managers of industrial and 
commercial establisliments, even when they are colonials, have re- 
ceived their training in the mother country and are familiar with 
the standards, the practices, and the equipment used there. 

All the factors which inspire interest and confidence in investors 
are apt to operate much more strongly in the mother country than 
among foreigners. The earl}^ history of the Congo offers a notable 
instance. In manj^ cases ex-officials of the colonies have been promi- 
nent in the organization of companies to develop those colonies. If 
concessions are being given, even if there is no intentional discrimina- 
tion, the nationals are most apt to have the information and the inter- 
est and the faith necessary for participation in the enterprises. Gov- 
ernmental action may play a part in the operation of these factors ; 
there may be discrimination in the granting of concessions and in 
such points as the listing of securities which are open to the iuA^est- 
ment of trust funds ,^^" or which may^ be quoted on the national 
bourse.^'^^ 

While the export and import trades are often closely associated, on 
the whole the colonial powers do not occupy a position of such promi- 
nence in the export trade of their colonies as in the import trade. In 
some cases this may be explained partially by the absence or the 
smaller amounts of the tariff differentials affecting these two trades 
(see p. 51), but the same condition is found also in India and other 
open-door colonies. A further explanation seems to be that the in- 
dustrial countries have emphasized their export trade and have not 
invoked in favor of their import trade the same interest, attention, 

i^*Or of colonial banks — e. g., in Newfoundland and the British West Indies branches 
of Canadian banks ; or in Oceania of Australian and New Zealand banks. 

1'= The statements in this paragraph are regarding tendencies, and of course there are 
numerous exceptions. Inrestments of capital in colonies may develop trade with another 
country — e. g.. British capital in Canada has increased the demand for machinery, etc., 
from the United States. German commercial houses had established themselves in British 
colonies before any German colonies existed. 

176 "A very large proportion of the requirements of these industries [Indian cotton and 
jute mills, engineering works, collieries, and various small industries], particularly in 
Bengal, where the firms of managing agents are usually British, is purchased through' the 
London office of the managing agents, and this largely accounts for the predominant 
position of British suppliers in the trade before the war." Board of Trade Journal. Aug. 
7. 1919, p. 177. 

i'^' As is the case in Great Britain. Proposed legislation in Great Britain would give 
relief to Investors in colonial enterprises from the double income tax which now fre- 
quently falls on those who invest money outside of their own countries, 

"s As is the case in France. 



INTRODUCTION AND SUMMARY. 77 

and financial machinery. Many a zealous colonist who would give 
a conscious preference to the mother countr}?^ in purchasing supplies 
sells the produce of his plantation to the highes-t bidder with hardly 
a thought of his nationality or the destination of the products.^^® 
The colonies produce so large a proportion of the exportable sur- 
plus of many articles that many countries must each take a share of 
their exports indirectly if not directly. A colony of one of the big 
industrial nations can obtain from the mother country practically 
all that it needs in the way of manufactures, but the whole world is 
dependent on India for jute and lac, on the French colonies for va- 
nilla, on Formosa for camphor, on the Philippines for manila, and 
unless serious obstacles are put in the way these articles will go more 
or less directly from the colonies to many parts of the world. 

These various factors, political, economic, and social, have a cumu- 
lative effect. Some of them are strongest in the newest colonies, and 
the trade currents established at the outset tend to become fixed. But 
these factors are not so strong that they automatically throw a 
monoply of the trade into the hands of the national merchants. ^^'^ 
They simply give to the national commercial interests and enter- 
prises advantages which •may be overcome by foreign competitors 
who are able and willing to apply themselves with superior zeal and 
better methods. The geographical and other points mentioned above 
must be considered. Trade habits and the action of various trade 
factors may tend to the disadvantage as well as to the advantage of 
the mother country. The colony may develop resources whose nat- 
ural outlet is in foreign countries. The development of the rubber 
plantations of Malaya and of the mineral resources of Algeria has 
led to decreases in the percentage of exports to the mother countries. 
During the war the United States became the market for the copra 
of the Pacific Islands, and the return cargoes gave- Americans an 
increased hold on the markets of those islands for manufactured 
goods. The value of an assured market for palm kernals in Ger- 
many was formerly a factor in preventing Great Britian from estab- 
lishing a palm kernal crushing industry. Canadian furs were sent 
unfinished to Germany and one of the largest items of Canadian 
import from Germany was finished furs. Normally, however, there 
is a sufficient market in the mother country, at least as an entrepot, 
and the language, the habits of immigrants and officials, the invest- 
ment of capital, the mercantile organization, the banking and ship- 
ping facilities all tend to reinforce one another and to promote the 
trade between the colony and the mother country. 

1-3 Compare the statement of Prime Minister Hughes, of Australia, that he is not 
opposed to selling to the ex-enemy countries, but only to buying from them. (The limes 
Trade Supplement, Nov. 13, 1920, p. 202.) . ., ^ „ ^ 

is° The acquisition of political ascendancy in a given region is not n<^cessarily followed 
by any increase in the percentage of trade falling to the dominant country. Great 
Britain's share in the import trade of Egypt decreased in the decade following the British 
occupation (Miiner, England in Egypt, 1893, p. 263) and has continued to decrease. 
The percentages are: 1881, 57 per cent; 1891, 54 per cent; 1901, 36.5 per cent; 1913, 
30.4 per cent. But since Egypt's trade has been growing rapidly the smaller peiTeutage 
of trade in 1913 was half again as valuable as was the larger percentage in 1901 (the 
figures being £5,568,000 and £8,496,000), and it is similarly much greater than was 57 
per cent of the trade of 1881. Here, as in India, the rise of other industrial nations 
has cut into the semimonopolv at one time pos.sessed by the British, but has not pre- 
vented a great expansion in the absolute amount of British trade. 

The annexation of Hawaii did not Increase the share of the United States in the import 
trade of that territory. (Reciprocity and Commercial Treaties, p. 134.) 



78 COLONIAL TARIFF POLICIES. 

XV. The Outlook ix Regard to Pkeferential Tariffs'. 

The open-door policy, whether pursued as a freely adopted na- 
tional policy or continued in accordance with treaty obligations, has 
been losing ground steadily for 20 years or more. Open-door agree- 
ments since 1900 have consisted of making more definite or reaffirm- 
ing old guarantees for equality of treatment. " The conference of 
Algeciras in 1906 resulted merely in an elaboration of an open-door 
regime which had existed in Morocco for decades, and the Japanese 
pledge of 1910 in regard to Korea was simply to maintain for 10 
years the status quo. Likewise the Anglo-French agreement of 
1906, relating to the New Hebrides, followed earlier treaties, of 
Avhich the first had been made in 1878, and the open-door provision 
of the Anglo-German-American treaty of 1899 in regard to Samoa 
repeated in effect a provision of the treaty of 1889. The treaty of 
Versailles and the covenant of the League of Nations explicitly pro- 
vided for the open door only in central Africa, where it had long 
been maintained in accordance with the general act of the conference 
of Berlin and the Anglo-German declarations of the same year.^^^ 

" Furthermore, the principle of the mainl^enance of the open door in 
colonial possessions has been positively weakened in the last score of 
years. In 1896-97 the powers abandoned their right to the open 
door in Tunis and the last treaty restriction upon the assimilation of 
this territory was denounced in 1919. In 1905 the Italians abolished 
the open-door regime in Somalia in defiance of the act of Berlin. In 
1909 the provision for the equal treatment of Spanish and American 
commerce in the Philippines expired. In 1912 the French pro- 
tectorate over Morocco Avas recognized — a recognition which, how- 
ever guarded, has led the French to feel that the situation has been 
fundamentally altered and to hope that the history of Tunis may be 
repeated." The year 1920 saw the expiration of Japan's pledge to 
maintain the status quo in Korea. The recent peace treaty with 
Germany apparently swept away the obligations of the Anglo- 
German declarations, 1885-1886, relative to the territories situated 
on the Gulf of Guinea and to the islands of the Pacific Ocean.^^^ In 
South-West Africa and Western Samoa differential tariffs have since 
been imposed. The peace treaty further deprived the Germans of 
their right to most-favored-nation treatment in Morocco, and this 
has been interpreted in France as foreshadowing the general recog- 
nition by the powers of a right on the part of the French to grant her 
citizens special tariff favors in Morocco. ^^^ 

In this period in which have terminated so many treaty orliga- 
tions in respect to the open door, the establishing of preferential 
tariffs has been going on steadily .^^* In fact, since 1890 the whole 

181 The treaty of Versailles perhaps implies an obligation to maintain the open door in 
the ex-Turkish territories ; here the powers had not onlv enjoyed equal treatment but 
had had the benefit of the limited rate of import duties. See appendix to Chapter IV for 
a discussion of the mandated territories. 

^^' And the rights of Germany, but of course not those of the United States, under the 
Anglo-German-American treaty of 1899. See pp. 277, 576, and 577. 

183 The French argument is that the other powers in assenting to the abolition of the 
German rights In Morocco implicitly assented to the renunciation of their own rights. 
See Chapter III, p. 206. 

3S4 The Republic of Portugal has held the Portuguese colonies with a somewhat looser 
rem than did the monarchy, but the fundamental colonial law still requires a differential 
of at least 50 per cent in colonial import duties. The French have taken St. Pierre and 
Miquelon from the list of assimilated colonies and established a special tariff in whcih 
the preferences are less than formerly. In a few other isolated instances differential 
colonial tariff rates have been decreased, but on the whole the tendency has been decidedly 
in the other direction. 



INTRODUCTION AND SUMMARY. 79 

preferential system may be said to have revived after a lapse of half 
a century. The protectionist reaction from the free-trade move- 
ment of the middle of the nineteenth century was in full swing in 
the late seventies, but it was not until the early nineties that it made 
its full appearance in the colonial tariffs of France, Spain, and 
Portugal. Of these countries, France is by far the most important 
colonial power, and France has not ceased to increase the tariff 
preferences Avhich bind her and her colonies. Italy introduced pref- 
erences in 1905 in Somalia and later in Libia. Japan assimilated 
the tariffs of Formosa in 1909 and of Korea in 1920. In the British 
Empire the reestablishing of preferential tariffs has been effected 
entirely since 1897. While the motives which have induced the Do- 
minions to adopt these preferences are mixed, and while protection 
is generally the principal object, the variety and amounts of the 
preference have on the Avhole steadily grown, and if Great Britain's 
enforcement of the preferential policy (1919) proves to be the be- 
ginning of a permanent change of policy, any chance that the Do- 
minions might reverse their policy has apparently disappeared. 
Before 1913 there were, with only one important exception no pref- 
erences either in India or in the numerous CroAvn colonies. In 1913 
half of the West Indies adopted a preferential system, and with the 
close of the war they have been followed by the other colonies of the 
West Indian group,^^^ and by Cyprus,^^® while a few examples of the 
most extrem.e form of restrictions have been established in India 
and in the West African Colonies. The maintenance by the British 
Imperial Government of a pereferential tariff' policy can scarcely fail 
to lead to the extension of such a policy among the Crown colonies. 
The Avar reenforced the spirit both of nationalism and of imperial- 
ism. The fiscal needs of the Government and the depression of in- 
dustry alike suggest the exploitation of this spirit by the raising of 
tariffs and the enforcement of neAv or increased differentials. 

The era of colonial expansion is apparently not yet ended. The 
annexation of new territory continues, as well as the conA^ersion of 
spheres of influence into protectorates and of protectorates into colo- 
nies. The chief acquisitions in recent times and the most probable 
acquisitions for the future haA^e been and probably will be made by 
those poAvers Avhich pursue the most exclusive trade policies, or by the 
British, who show signs of abandoning their free-trade and open-door 
tariff policy. 

The greater part of the AA^orld has already been occupied by the 
colonial poAvers, but there remain territories AA^hose continued inde- 
pendence is in doubt— notably Persia, Afghanistan, Tibet, Abys- 
sinia, and Liberia. Japan has already an economic hold upon South- 
ern Manchuria, is making claims on Eastern Inner Mongolia, is ad- 
vancing in China proper, and her future relations with Siberia re- 
main unsettled. 

if'S Except Bermuda, whose legislature declined to ratify the agreement with Canada. 
i»6 And by Fiji on Jan. 1. 1922. 



Part I. 

Chapter II. 

COLONIAL TARIFF POLICY OF BELGILTM. 



CONTENTS. 



Page. I 
Past I.— The Congo Free State. 

I. Introduction: 

The formation of the Congo Free State — 

Early exploration 80 

Calling of the conference of Berlin. . . 82 

II. Government and making of tarifis 83 

III. Tariff history: 

General tariff regulations — 

Convention with United States^ April 
22.1884 84 

Convention with Germany, Novem- 
ber 8, 1884 84 

Convention with Great Britain, De- 
cember 16, 1884 85 

The general act of the conference of 
Berlin, February 26, 1885 85 

Declaration of Brussels antislavery 
conference, July 2, 1890 '. 87 

Treaty with the United Stat&s, Janu- 
arv24, 1891 88 

Protocol of Lisbon, April 8, 1892 88 

Traffic in alcohol and arms — 

Alcohol 89 

Arms 90 

IV. The "open door" in the Congo in prac- 

tice 90 

The land regime 91 

Assumption of State control of soil 

and products 91 

Establishment of restricted areas 93 

Domaine Prlvg (private domain 

oftheState) 94 

Reserved area 94 

Free areas 94 

Domaine de la Couronne (estate 

of the Crown) 95 

Exploitation by comT)anies — 

Trading companies 95 

Concessionary companies 95 

Disrposai of "free lands" 96 

Effect of the land laws 97 

Taxation in labor— 

"Rubber tax" and other exactions.. 98 

Effect upon commerce 99 



Page. 
IV. The "open door," etc.— Continued. 

Taxation of trading compan ies 100 

State monopoly of trausportation— 

Effect of State monopoly upon trade. 101 
Absence of currency- 
Payment for labor in goods 102 

Effect of pavmem in goods upon 

trade 1 103 

Other obstacles to trade, civil and mili- 

tarv 104 

Effects on trade 105 

Total trade of the Congo 106 

Table 1.— Trade of the Congo, 

1886-1908 106 

Contrast in the trade of the Upper and 

the Lower Congo 107 

Table 2.— Exports from the Up- 
per and Lower Congo lOS 

Trade between the Congo and Bel- 
gium 109 

Table3.— Exports to Belgium.. 110 

Table 4. — Imports by countries. HI 

Table 5.— Imports from Belgium 112 

Summary: Difference between theory and 

practice .' 112 

Part II.— The Belgian Congo. 

I. Introduction: 

Annexation of the Congo Free State by 

Belgium '. . 114 

Situation and commerce 115 

Table 6.— Principal exports 116 

Table 7.— Principal imports 117 

Table S.— Special imports 117 

II. Government and making of tariffs 118 

III. Tariff policy and system- 
Co ntintuty of treaty obligations 119 

Tariff poUcy 119 

Revision of treaty obligations 120 

IV. Tariff rates 123 

Treatment of products of the Congo in 

Belgium 126 

V. Restoration of the open door 126 

Bibliography 128 



PART I.— THE COxNGO FREE STATE. 

I. Ils^TEODUCTION. 



THE FORMATION OF THE CONGO FREE STATE. 

EARLY EXPLOEATIGN. 

Even before tlie discovery of tlie mouth of the Congo River m 
1483, the Portuguese claimed a monopoly of trade on the west coast 
of Africa. The daring merchants of the next two centuries, however, 
paid little attention to the Portuguese claims; frequent conflicts re- 
sulted; and between 1641 and 1667 the Portuguese were constrained 
80 



BELGIUM. 81 

to recognize in treaties with the Dutch, English, and French,* certain 
rights of trade for foreigners. In the treaties of 1642 and 1654, be- 
tween Portugal and Great Britain, appear old forms of the most- 
favored-nation clause, stipulations that the duties should be no 
'^ greater or more grievous than those which shall be demanded from 
other nations in league with the King of Portugal'' and that the 
English should be permitted to trade ''with the same freedom as 
formerly, and the same that was ever granted by any treaty hereto- 
fore, or shall hereafter be granted to the mhabitants of any other 
nation."^ A treaty of 1810 with Great Britain limited the Portuguese 
colonial tariffs to 15 per cent. From this treaty and that of 1815 with 
the same power, and from that of 1786 with France, it appears that 
Portugal had abandoned the claim to exclusive trade rights north of 
the Congo and including the mouth of that river, and that, while France 
disclaimed the territory for herself, neither France nor England recog- 
nized the Portuguese claims to the region just north and south of 
the Congo's mouth, a territory which came to be defined as extend- 
ing from 5° 12' to 8° south latitude.^ The English, who objected to 
the Portuguese commercial policy and to their lack of zeal in sup- 
pressing the slave trade, consistently refused to recognize this terri- 
tory as Portuguese, and even threatened to oppose by force its 
occupation.* 

During the early part of the nineteenth centmy and until the 
Franco-Prussian War of 1870, Great Britain and France alone had 
taken any interest in expanding their possessions in Africa, but their 
progress was insignificant compared to that which took place after 
the real scramble for territory began. For a score of years the interest 
of geographers and explorers in Central Africa had been rapidly in- 
creasing, but the event that attracted the attention of the whole 
world and really initiated the territorial scramble was Stanley's de- 
scent of the Congo. Stanley emerged from the mouth of this river on 
the west coast of Africa in August of 1877.^ But as early as Septem- 
ber, 1876, Leopold II, King of the Belgians, had summoned a confer- 
ence of geographers and philanthropists at Brussels, and had organ- 
ized the Association Internationale pour I'Exploration et la Civilisa- 
tion de I'Afrique Centrale. This soon became known as the Associa- 
tion Internationale Africaine, or the A. I. A.® The international or- 
ganization was a complex of national committees and the societies 
which supported them, and it retired more and more into the back- 
ground, since — 

the Belgian national committee was the only one which devoted itself seriously to 
the work. It alone collected greater funds than all the other national committees. 
It alone displayed real activity, so that, little by little, the International African 
Association came to be considered a Belgian society.'^ 

^ Lannoy, C. de, and Linden, H. vander: Histoire de i'Expansion Colonial© des Peuples Europeens, 
Vol. I, Portugal et Espagne, 1907, p. 114; Chapman, A. B. VV.: The Commercial Relations of England, 
and Portugal, 1487-1807, in Royal Historical Society Transactions, 3d series, Vol. I, 1907, passim; Geo- 
graphical Society of Lisbon, La Question du Zaire, Droits du Portugal, 1883, passim [Zaire is the Portu- 
guese name for the Congo]; Keltie, J. Scott: The Partition of Africa, 1895, p. (52 ff. 

2 Art. Xni of the treaty of 1642, Brit, and For. State Papers, 1812-1814, vol. 1, p. 478; Art. XI of the 
treaty of 1654, Ibid., p. 484. 

8 Martens, G. F. de: Recueil de Traites d'Alliance, etc., 1818, Vol. IV, pp. 101-105; Gt. Brit., Pari. Papers, 
C. 3531, 1883. 

<See account of negotiations of 1846, 1853-1850, and 1860, in Gt. Brit., Pari. Papers C. 3531, 1883, passim, 

6 Keltie: Op. cit., p. HI. 

6 Wauters, Adolph,e-Jules: Etat Ind^pendant du Congo, 1899, p. 11; Cattier, Felicien: Droit ^t 
Administration de I'Etat In dependant du Congo, 1898, p. 11, 

^ Cattier: Op. cit., p. 12. 



82 COLONIAL TARIFF POLICIES. 

At the meeting of 1877 Leopold consented to serve a second term 
as president, but positively refused to allow the International Asso- 
ciation to use the Belgian flag.* 

In 1878 Leopold organized the Comite d'Etudes du Haut- 
Congo. This organization soon became indistinguishable from the 
Association Internationale Africaine,^ which was another of Leo- 
pold's organizations and with even less title to the term inter- 
national. As the agent of the Comite, Stanley went back to 
the Congo and in August, 1879, began to construct a great central 
African State. He built a road around Stanley Falls, placed 
half a dozen stations in the lower basin, and then returned in 
1882 to teU the association that the country was ''not worth a 
two-shilling piece" unless the}' could make treaties with the cliiefs 
and establish themselves as a political power. Some writers say 
that Leopold's chief concern was originally humanitarian, but that 
the international situation soon forced liim into territorial ambitions 
to safeguard the work he was doing at such heavy personal expense.^® 
Whether this be the case or whether Leopold had believed that the fu- 
ture of Belgium depended on founding a colony," Stanley was sent back 
to begin a very active and successful campaign to get treaties from 
the native chiefs. Most of the available texts of these treaties 
(though not those signed by the greatest number of chiefs) show 
that the chiefs granted to the association special rights of trade and 
commmiication, including in many cases the right to collect tolls 
or to exclude others from the country altogether. -^ 

In the meantime the French had been exploring the valley of the 
Ogowe and had advanced to Stanley Pool from the north. The 
Portuguese, alleging a desire to stop this French advance, though 
it had not come south of 5° 12' and the Portuguese territorial claims 
were endangered rather by the African association than, by France, 
opened negotiations with Great Britain in November of 1882 for the 
recognition of this territory, incluchng the Congo mouth, as Portu- 
guese. It was not until February. 1884, that Portugal and England 
came to agreement upon the terms of a treaty. By the ratification 
of its provisions Portuguese o^^Tiership of the disputed territory 
would have been recognized, but only as far inland as the coast 
tribes extended, and on the Congo only to Nokki. leaving the terri- 
tory beyond to the Association Internationale Africaine. 

CALLIXG OF THE CONFERENCE OF BERLIN. 

This Anglo-Portuguese treaty met with great opposition, both in 
England and on the Continent. In England this was due chiefly 
to objections on the part of the traders engaged in the Congo region 
to Portuguese imposition of duties where none had existed before. 

s Sanford, Gen. H. S.: Report to the American Brancli of the International Association for the Civiliza- 
tion of Central Africa, in Journal (Bulletin) of the Am. Geog. Soc, Vol. IX, 1877, No. 4, p. 89. 

sCattier: Op. cit., p. 16. Goldsmid, Gen. Sir F. J.: Mv Recent Visit to the Congo, in Proceedings of 
the Royal Geographical Society of London, Vol VI, No'. 4, April, 1SS4, p. 177. The Comite d'Etudes 
changed its name to Association Internationale du Congo. Treaties were made indifferently in the name 
of the Association Internationale Afi-icaine, and of the Comite d'Etudes. 

10 Descamps^ E. E. F.: New Afi-ica, 1903, v. 19. Cf. The Edinburgh Reriew, Vol. CLX, 1884, p. 178; 
S,tanley, Sir H. M.: The Congo and the Founding of its Free State, 18S5, pp. 52-54, 463-465; Vandervelde, 
Emile: La Belgique et le Congo, Le Pass^, le Present, rAvenir, Paris, 1911, p. 22. 

" Cattier: Op. cit., p. 11; Blanehard, Georges: Formation et Constitution Politique de I'Etat Indepen- 
dent du Congo, 1899, p. 4; but see pp. 19-24. 50. 

- Sen. Rept. No. 393, 4STh Cong., 1st sess.,'pp. 49, 50; Gt. Brit., Pari. Papers, C. 4023, 1S84; Stanley: Op. 
cit., Vol. n, pp. 195-206; Cattier: Op. cit., p. 33. 



BELGIUM. 83 

On the Continent it was urged that Great Britain had arrogated to 
herself the settlement of a question properly international. Portu- 
guese duties would interfere with trade, it was said; Portuguese 
control would prevent the establishment of the Association Inter- 
nationale Africaine and the legitimate expansion of French influence. 
Naturally these last two objections were chiefly those of Leopold 
and of France. Portugal finally sought, by suggesting a revision 
so as to permit the establishment of an international commission for 
the regulation of navigation on the Congo, to secure general recogni- 
tion of the treaty, but Bismarck enlisted French support and called 
the conference of Berlin. 

The conference of Berlin lasted from November, 1884, to February, 
1885. Territorial questions were formally excluded from its pro- 
gi-am, but before its sessions ended the issues affecting the Portu- 
guese and French claims in the western Congo basin and those of the 
International Association had been determined, and at its last session 
the conference formally welcomed the Congo State as a member of the 
family of nations. Nearly a year before this the United States had 
by treaty recognized the flag of the International Association as that 
of a friendly Government. Germany had recognized the ''State 
to be created,'' shortly before the conference met. Portuguese 
claims, formerly derided, were admitted by the conference, as far up 
as the south bank of the river. France obtained the valley of 
Niari-Kv/ilu, though it v/as dotted with stations of the International 
Association; but the north bank of the Congo River and most of the 
vast interior basin v/ere turned over to the new Independent State 
of the Congo, better known in the United States as the Congo Free 
State. 

The w^ork of the Berlin conference was to prescribe freedom of 
commerce within the vast district known as the Conventional Basin 
of the Congo, and including considerable territory not within the 
boundaries of the Congo State. The provisions are discussed under 
the heading ''Tariff History." 

II. Government and Making of Tariffs. 

The history of the Congo since 1885 falls into two parts: Up to 
November 15, 1908, there was the Congo Free State, which was en- 
tirely independent of Belgium, though both States had the sanie 
sovereign; since that day there has been the Belgian Congo, which is 
possessed as a colony of Belgium in the same manner as other colo- 
nies are possessed by other European States. The government of 
the Congo during the first period only is dealt with at this point. 

Naturally the Belgian cabinet and parliament had no authority 
whatever in the "Independent State of the Congo." M. Vander- 
velde initiated a debate on the government of the Congo, in 1903, but 
until the question of annexation was taken up seriously in 1906 the 
Belgian Legislature had had no connection vdth the Congo State 
except in the voting of loans to it, $30,000,000 in 1887, $5,000,000 in 
1891), and $10,000,000 in 1901. ^^ 

King Leopold governed the Congo with the authority of an abso- 
lute autocrat, although it was necessary for him to rely upon subor- 
ns The loan agreement of 1890 gave to Belgium a certain negative control of the finances of the Congo 
State and an option on taking over the Belgian Congo at the end of 10 years. 



84 COLOXTAL TABIFF POLICIES. 

dinates for murh of the administratiou. There were always associ- 
ated with him one or more ministers or secretaries in Biiissels, and 
there was a governor general or administrator general in the Congo 
itseH who supervised the execution of decrees and who was authorized 
in some cases to suspend their operation. These mmisters, however, 
had no official position in the Belgian Government, there was no 
ministerial responsibility, and the King was the real center of power,^* 

III. Taeiff History, 

The tariff history of the Congo Free State is almost entirely a his- 
tory of treaty provisions. The earliest recognitions of the Congo 
State were associated with declarations or agreements on its part 
that it would levy no import duties, and this free-trade regime was 
established for it and for certain neighboring territories by the final 
act of the conference of Berlin, signed and ratified by 14 Governments. 

aEXERAL TAEIFF REGULATIONS. 

COXVEXTIOX WITH UXITED STATES, APSIL 22, 18S4. 

The Government of the United States was fu'st to recognize the 
*' International Association of the Congo" as a '•friendly Govern- 
ment." By declarations exchanged April 22, 1884, the Association 
declared of the territory ceded to it ''for the use and benefit of free 
States established and being estabhshed": 

That the said association and the said States ha^ e resolved to levy no customhouse 
duties upon goods or articles of merchandise imported into their territories or brought 
by the route vrhich has been constructed around the Congo cataracts; this they have 
done with a xiew of enabling commerce to penetrate into Equatorial Africa. 

That they guarantee to foreigners settling in their territories the right to purchase, 
sell, or lease lands and buildings situated therein, to establish commercial houses, and 
to there carry on trade upon the sole condition that they shall obey the laws. They 
pledge themselves, moreover, never to grant to the citizens of one nation any advan- 
tages without immediately extending the same to the citizens of all other nations, 
and to do all in their power to prevent the slave trade. ^^ 

COXVEXTIOX WITH GERMAXY, XOVEMBER S, 18S4. 

The German Government made a convention with the International 
Association^ signing it just before the opening of the conference of 
Berlin and soon thereafter ratifying it, facts not generally known for 
some time. By this convention — 

I. The International Association of the Congo engages to le^y no duty upon arti- 
cles or merchandise imported directly or in transit into its possessions, present and 
future, in the basins of the Congo and Niadi-Kwilu [Niari-Kwilu], or in its possessions 
on the Atlantic coast. This freedom fi-om dut^^ extends specifically^ to merchandise 
and articles of commerce which are transported by the roads which are established 
around the cataracts of the Congo. 

II. The subjects of the German Empire have the right to sojourn and to establish 
themselves upon the tenitories of the Association. 

Tbey will be treated upon the same footing aa the subjects of the most-favored 
nation, including the inhabitant's of the country, in all that concerns the protection 
of theh persons and their goods, the free exercise of their religions, the prc«ecution 

i-Cattier, Felicien.: Etnde sur la Situation de I'Etat Independant du Con?o, l^no, v. :^24; Blanchard: 
Op. fit., pp. 240-244: Halewyck, Minhel: I.a Charte Colon iale, 1"10, p. 235. 
1^ Malloy, W. M.: Treaties, etc., bttv^een the United State? ar.d Cttier Powers, 1910, Val. I, p. 327. 



BELGIUM. 85 

and defense of their rights, as well as in relation to navigation, commerce, and in- 
dustry. 

Particularly they will ha^-e the right to buy, to sell, and to lease lands and edifices 
situated upon the territory of the association, to found houses of commerce there, and 
to carry on commerce or coasting trade there under the German fjag.^*^ 

CONVENTION WITH GREAT BRITAIN, DECEMBER 16, 1884. 

Similar treaties were made with a number of other powers, that 
with Great Britain specifying that British subjects should have the 
right of buying, of selling, of letting, and of hiring lands and build- 
ings, mines, and forests situated within the said territories, and of 
founding houses of commerce, and of carrying on commerce and a 
coasting trade under the British flag.^^ 

THE GENERAL ACT OF THE CONFERENCE OF BERLIN, FEBRUARY 26, 1885, 

The general act of the conference of Berlin established detailed pro- 
visions for freedom of trade and navigation in the Conventional Basin 
of the Congo, including all of the Congo State. 

Articles of this act read as. follows : 

CHAPTER I.— Declaration Relative to Freedom of Trade in the Basin o? the Congo, its Mouths 
AND Circumjacent Regions, with Other Provisions Connected Therewith. 

Article 1. The trade of all nations shall enjoy complete freedom — 

1. In all the regions forming the basin of the Congo and its outlets. This l^asin is 
bounded by the watersheds (or mountain ridges) of the adjacent basins, namely, in 
particular, those of the Niari, the Ogowe, the Schari, and the Nile, on the north; by 
the eastern watershed line of the affluents of Lake Tanganyika on the east; and by the 
watersheds of the basins of the Zambesi and the Loge on the south. It therefore com- 
prises all the regions watered by the Congo and its affluents, including Lake Tangan- 
yika, with its eastern tributaries. 

2. In the maritime zone extending along the Atlantic Ocean from the parallel 
situated in 2° 30^ of south latitude to the mouth of the Loge. 

The northern boundary will follow the parallel situated in 2° 30^ from the coast to 
the point where it meets the geographical basin of the Congo, avoiding the basin of 
the Ogowe, to which the provisions of the present act do not apply. 

The southern boundary will follow the course of the Loge to its source, and thence 
pass eastwards till it joins the geographical basin of the Congo. 

3. In the zone stretching eastwards from the Congo Basin, as above defined, to the 
Indian Ocean from 5 degrees of north latitude to the mouth of the Zambesi in the 
south, ^^ from which point the line of demarcation will ascend the Zambesi to 5 miles 
above its confluence with the SMre, and then follow the watershed between the 
affluents of Lake Nyassa and those of the Zambesi, till at last it reaches the watershed 
between the waters of the Zambesi and the Congo. 

It is expressly recognized that in extending the principle of free trade to this eastern 
zone the conierence powers only undertake engagements for themselves, and that in 
the territories belonging to an independent sovereign State this principle shall only 
be applicable in so far as it is approved by such State. But the powers agree to use 
their good offices with the Governments established on. the African shore of the Indian 
Ocean for the purpose of obtaining such approval, and in any case of securing the most 
favourable conditions to the transit (trathc) of all nations. [The adhesion of Zanzibar 
was obtained.] 

Art. 2. All flags, without distinction of nationality, shall have free access to the 
whole of the coast line of the territories alcove enumerated, to the rivers there running 
into the sea, to all the waters of the Congo and its affluents, including the lakes, and to 
all the ports situate on the banks of these waters, as well as to all canals which may in 
future be constructed with intent to unite the watercourses or lakes within the 
entire area of the territories described in article 1, Those trading under such flags 

16 Gt. Brit., Foreign Office, Brit, and For. State Papers, 1891, Vol. 7-5, p. 354 (in French). 

1' Convention of Dec. 18, 1884; text in Hertslet's Commercial Treaties, vol. 17, p. 58, or Brit, and For. 
State Papers, vol. 75, p. 29. 

's The Portusuese made a reservation by which the free trade provisions of the treaty did not apply to 
their territory in East Africa north of the Zambesi. 



86 COLOXI.y:. TAEIFF POLICIES. 

may engage in all sorts of transport, and carry on the coasting trade by sea and river, 
as well asboat traffic, on the same footing as if they were subjects. 

Art. 3. Wares, of whatever origin, imported into these regions, under whatsoever 
flag, by sea or river, or overland, shall be subject to no other taxes than such as may be 
levied' as fair compensation for expenditure in the interests of trade, and which for 
this reason must be equally borne by the subjects themselves and by foreigners of all 
nationalities. All differential dues on vessels, as well as on merchandise, are for- 
bidden. 

Art. 4. Merchandise imported into these regions shall remain free from import 
and transit dues.^^ 

The powers reserve to themselves to determine afrer the lapse of 20 years whether 
this freedom of import shall be retained or not. 

Art. 5. No power which exercises or shall exercise sovereign rights in the above- 
mentioned regions shall be allowed to grant therein a monopoly or favor of any kind 
in matters of trade. 

Foreigners, without distinction, shall enjoy protection of their persons and property, 
as well as the right of acquiring and transferring movable and immoA'able possessions, 
and national rights and treatment in the exercise of their professions. 

(Provisions relative to protection of the natives. 'of missionaries and. travellers, as well as relative to 

religious liberty * * *.) 

Art. 6. Freedom of conscience and religious toleration are expressly guaranteed to 
the natives, no less than to subjects and to foreigners. The free and public exercise 
of all forms of divine worship, and the right to build edifices for religious purposes, and 
to organize religious missions belonging to all creeds, shall not be limited or fettered 
in any way whatsoever. * * * 

CHAPTER IV.— Act of Navigation foe the Congo. 

Art. 13. The navigation of the Congo, without excepting any of its branches or 
outlets, is, and shall remain, free for the merchant ships of all nations equally, whether 
carr}T.ng cargo or ballast, for the transport of goods or passengers. It shall be regulated 
by the provisions of tliis act of navigation, and by the rules to be made in pursuance 
thereof. 

In the exercise of this navigation the subjects and flags of all nations shall in all 
respects be treated on a footing of perfect equality, not only for the direct navigation 
from the open sea to the inland ports of the Congo, and \ice versa, but also for the 
great and small coasting trade, and for boat traffic on the course of the river. 

Consequently, on all the course and mouths of the Congo there will be no distinction 
made between the subjects of Riverain States and those of non-Riverain States, and 
no exclusive privilege of navigation will be conceded to companies, corporations, or 
private persons whatsoever. 

These provisions are recognized by the signatory powers as becoming henceforth a 
part of international law. 

Art. 14. The navigation of the Congo shall not be subject to any restriction or obli- 
gation wliich is not expressly stipulated by the present act. It shall not be exposed 
to any landing dues, to any station or depot tax, or to any charge for breaking bulk, or 
for compulsory entry into port. 

In all the extent of the Congo the ships and goods in process of transit on the river 
shall be submitted to no transit dues, whatever their starting place or destination. 

There shall be levied no maritime or river toll based on the mere fact of navigation, 
nor any tax on goods aboard of ships. There shall only be levied taxes or duties hav ing 
the character of an equivalent for services rendered to navigation itself, to wit: 

1. Harbour dues on certain local establishments, such as wharv^es, warehouses, etc., 
if actually used. 

The tariff of such dues shall be framed according to the cost of constructing and 
maintaining the said local establishments, and it will be applied without regard to 
whence vessels come or what thev' are loaded with. 

2. Pilot dues for those stretches of the river where it may be necessary to establish 
properly qualified pilots. 

The tariff of these dues shall be fixed and calculated in proportion to the services 
rendered. 

3. Charges raised to cover technical and administrative expenses incin-red in the 
general interest of navigation, including lighthouse, beacon, and buoy duties. 

The last-mentioned dues shall be based on the tonnage of vessels as shown by the 
Bhip 's papers, and in accordance with the rules adopted on the lower Danube. 

IS Modified for import duties in 1890, See p. S7. 



BELGIUM. . 87 

The tariffs by which the various dues and taxes enumerated in the three preceding 
paragraphs shall be levied shall not involve any differential treatment, and shall be 
officially published at each port. 

The powers reserve to themselves to consider, after the lapse of five years, whether 
it may be necessary to revise, by common accord, the above-mentioned tariffs. 

Art. 15. The affluents of the Congo shall in all respects be subject to the same rules 
as the river of which they are tributaries. 

And the same rules shall apply to the streams and river as well as the lakes and 
canals in the territories defined in paragraphs 2 and 3 of article 1. * * * 

Art. 16. The roads, railways, or lateral canals which may be constructed with the 
special object of obviatiiig the innavigability or correcting the imperfection of the 
river route on certain sections of the course of the Congo, its affluents, and other water- 
ways placed under a similar system, as laid down in article 15, shall be considered, in 
their quality of means of communication, as dependencies of this river, and as equally 
open to the traffic of all nations. 

And, as on the river itself, so there shall be collected on these roads, railways, and 
canals only tolls calculated on the cost of construction, maintenance, and manage- 
ment, and on the profits due to the promoters. 

As regards the tariff of these tolls, strangers and the natives of the respective terri- 
tories shall be treated on a footing of perfect equality. * * * 20 

DECLARATION OF BRUSSELS ANTISLAVERY CONFERENCE, JULY 2, 1890. 

The next important document in the tariff history of the Congo is 
the treaty of Brussels, together with the declaration affixed to that 
treaty, of July 2, 1890. The treaty itself included provisions regard- 
ing the taxation of liquors and the importation of arms (see p. 89); 
the additional declaration reads in part: 

The signatory or adhering powers who have possessions or protectorates in the said 
conventional basin of the Congo are authorized, so far as they require any authority 
for the purpose, to establish therein duties upon imported goods, the scale of which 
shall not exceed a rate equivalent to 10 per cent "ad valorem" at the port of entry, 
always excepting spirituous liquors, which are regulated by the pro^dsions of Chapter 
VI of the general act of this day. 

After the signature of the said general act, neo:otiations shall be opened between the 
powers who have ratified the general act of Berlin or who have adhered to it, in order 
to draw up, within the maximum limit of 10 per cent "ad valorem," the conditions of 
the customs system to be established in the conventional basin of the Congo. 

Nevertheless, it is understood: 

1. That no differential treatment or transit duty shall be established. 

2. That in applying the customs system which may be agreed upon, each power will 
undertake to simplify formalities as much as possible, and to facilitate trade opera- 
tions. 

3. That the arrangement resulting from the proposed negotiations shall remain in 
force for 15 years from the signature of the present declaration. 

At the expii'ation of this period, and failing a fresh agreement, the contracting 
powers shall return to the conditions provided for by Article IV of the general act of 
Berlin, retaining the power of imposing duties up to a maximum of 10 per cent upon 
goods imported into the conventional basin of the Congo. 

The ratifications of the present' declaration shall be exchanged at the same time as 
■those of the general act of this day.^^ 

Since the 15 years ^^ mentioned in the declaration has expired and 
since certain writers have carelessly assumed that the whole treaty 
had thereby expired, attention may be called to the clearness with 
which the treaty of 1885 (art. 4) and the additional act of 1890 
restrict the prospective revision and the revision actually made to the 
sole point of the rate of the import duties and carefully leave un- 
touched the obligations in respect to freedom of transit, freedom of 

20 Hertslet's Commercial Treaties, vol. 17, p. 62. 

21 Ibid., vol. 19, p. 304. 

22 The number was evidently selected in order to coincide with the 20 j^ears mentioned in Article IV of 
the general act of Berlin, 1885. 



88 COLONIAL TAEIFF POLICIES. 

access to and navigation on the inland watenvays, and freedom from 
discriminatory charges of whatever sort.'^ 

TREATY WITH THE UNITED STATES, JANUARY 24, 1891. 

Since the United States had not ratified the act of Berlin, and since 
the United States and the Congo State had a special treaty guaran- 
teeing entry to American goods without import duties, it was neces- 
siiry that a separate treaty be made, the United States therein 
consenting to the 10 per cent import duty. Such a treaty was signed 
January 24, 1891, but as its obligation was contingent upon the 
ratification of the general act of Brussels, and, as the ratification of 
that act was delayed by the Dutch, this treaty was not proclaimed in 
force until April 2, 1892.2^ Articles X and XI of this treaty contain 
the substance of the Brussels declaration of July 2, 1890, and bring 
out clearly that the time limit of 15 jenTs did not relate to the 
guarantee that no differential duty would be introduced. 

Art. X. The Republic of the United States of America, recognizing that it is just 
and necessary to facilitate to the Independent State of the Congo the accomplishment 
of the obligations which it has contracted by virtue of the general act of Brussels of 
July 2, 1890, admits, so far as it is concei'ned, that import duties may be collected 
upon merchandise imported into the said State. 

The tariff of these duties can not go beyond 10 per cent of the value of the merchan- 
dise at the port of importation, during 15 years to date from July 2, 1890, except for 
spirits, which are regulated by the provisions of Chapter VI of the general act of 
Brussels. 

At the expiration of this term of 15 years, and in default of a new accord, the United 
States of America will be replaced, as to the Independent State of the Congo, in the 
situation which existed prior to July 2, 1890; the right to impose-import duties to a 
maximum of 10 per cent upon merchandise imported into the said State remaining 
acquhed to it, on the conditions and within the limitations determined in Articles XI 
and XII of this treaty. 

Art. XI. The United States shall enjoy in the Independent State of the Congo, as 
to the import duties, all the advantages accorded to the most-favored nation. 

It has been agreed besides: 

1. That no differential treatment nor ti-ansit duty can be established; 

2. That, in the application of the tariff regime which will be introduced, the Congo 
State will apply itself to simplify as far as possible the formalities and to facilitate the 
operations of commerce. ^° 

The 12 other articles of the treaty reaffirm in detail the privileges 
to be enjoyed by American citizens in the Congo State. But except 
in Article IV (which granted the right "to erect religious edifices and 
to organize and maintain missions"), the various articles provided 
only most-favored-nation treatment and some of the sections con- 
tained saving clauses in regard to the laws of the land. Article VIII 
may be taken as illustrative: 

In the territories of neither of the high contracting parties, shall there be established 
or enforced a prohibition against the importation, exportation, or ti'ausit of any article 
of legal commerce, produced or manufactured in the territories of the other, unless 
this prohibition shall equally and at once be extended to all other nations.-^ 

PEOTCCOL OP LISBON, APRIL 8, 1892. 

The Brussels treaty was followed, according to the suggestion 
which it contained; by treaties between France, Portugal, and the 
Congo State, and between Great Britain, Germany, and Italy, dealing 

23 For reference to revision of tJie treaties in 1919, see p. 120. 
2* Malloy: Op. cit., Vol. I, p. 328. 
« Ibid., p. 331. 



BELGIUM. 89 

with their possessions, respectiyely, iii the western and in the eastern 
parts of the conventional basin of the Congo.^^ By the protocol of 
Lisbon, April 8, 1892, the Congo Free State agreed with its western 
neighbors to limit import duties to 6 per cent on all articles except 
arms and ammunition and salt, which were to pay 10 per cent, and 
alcohol, for which special provision had already been made in the 
Brussels treaty. Ships and boats, steam engines and similar machin- 
ery, and tools for industry and agriculture were to pay 3 per cent 
after a lapse of four years. Eailway materials and equipment of all 
kinds were to pay 3 per cent after Ihe completion of the railway in 
question. Scientific instruments, religious paraphernalia, and the 
baggage of travelers and colonists were to enter free. Export duties 
w^ere agreed upon at the rate of 10 per cent on rubber and ivory 
and of 5 per cent on the other common products of the region. Val- 
uations were also established, subject to change annually, though in 
practice few changes were made. This agreemxcnt was valid for 10 
years, and when it was renewed the general import rate was increased 
from 6 to 10 per cent. The onlj^ other important alteration was the 
raising of the valuation of rubber in 1907. The agreement remained 
in force for some years after the Congo Free State had become the 
Belgian Congo. 

TRArriC IN ALCOHOL AND ARMS. 

ALCOHOL. 

The importation of alcohol into the Congo Free State (as part of 
the territory included between 20° IN. and 22° S.) was regulated by 
three treaties. The general act of the Brussels antislavery confer- 
ence (which was signed July 2, 1890, and finally came into force in 
1892) prohibited the importation or manufacture of distilled liquors 
*4n the districts where it shall be ascertained that, either on account 
of religious belief or from some other causes, the use of distilled 
liquors does not exist or has not been developed." In other dis- 
tricts, where alcoholic liquors were imported free or paid a duty of 
less than 15 francs per hectoliter (10.957 cents per gallon) of alcohol 
of 50 degrees centesimal strength, the imposition of a duty of this 
amount was required, and after three years this duty might be 
increased to 25 francs. In 1899 the rate was raised to 70 francs and 
in 1906 to 100 francs (73 cents per gallon), and it was specifically 
provided that liquors of greater strengths were to pay higher rates in 
proportion to their alcoholic content. All three of these treaties also 
provided that any liquors produced locally should pay an excise not 
low^er than the customs duty.^^ 

Prior to 1892, w^hen the additional declaration of July 2, 1890, 
became effective, no import duty could be imposed by the Congo 
State. But the treaty of Brussels, signed July 2, 1890, contem- 
plated the entire prohibition of the sale of distilled liquor to natives 
in regions in which they had not yet become accustomed to its use. 
On July 16, 1890, such a prohibition w^as decreed for all of the Upper 
Congo and that part of the Low^er Congo beyond the River Inkissi, 

"^ See p. 401 for the treaty dealinsr with the eastern part of the basin. 

28 The texts of these treaties are given in Malloy, op. cit., Val. II, pp. 1964, 1993. and 2205. For certain 
excex)tions to their provisions, see sections of this'report dealing with Dahoroev, Eritrea, and Angola, pp., 
217, 380, and 498 fn. For the promulgation of these provisions in the Congo, see decrees of July 12, 1900, 
and Nov. 12, 1907. This last agreement came mto force Dee. 2, 1907. The treaties of 1899 and 1906 specifi- 
cally permitted a proportionately lower duty ba liquors ol a less strength than 50 degrees. 



90 COLONIAL TAEIFF POLICIES. 

By later decrees, in 1896 and 1898, this boundary was moved west- 
ward to the Kwilu and then to the Pozo River.^^ By a decree of 
October 15, 1898, the importation of absinthe and its sale either to 
whites or blacks were prohibited throughout the State.^^ 



It was further provided in the Brussels antislavery convention of 
1890 ^^ that in the region between 20° north and 22° south no modern 
rifles should be sold to the natives and that in those parts of this 
region in which the slave trade persisted no arms of any sort should 
be sold to the natives. The Governments might issue individual 
permits authorizing the possession of improved arms, but it was 
stipulated that the arms should be marked and registered and that 
the individuals should give guarantees that they would not transfer 
the arms to third parties. The sale of trade guns, with flintlocks 
and unrifled barrels, and of common gunpowder was restricted by 
the requirement that all importations be consigned to public or other 
authorized warehouses and that no arms should be withdrawn from 
these warehouses without licenses specifying the regions in which 
they might be sold. The signatory powers were to take all such 
measures as they deemed necessary to prevent the entry or exit of 
arms by their inland frontiers, and the signatory powers who had 
possessions in Africa in contact with the zone of operation of the 
treaty bound themselves to prevent the introduction of firearms 
across their inland boundaries, "at least that of improved arms and 
cartridges." 

IV. The ''Open Door" in the Congo in Practice. 

What was known for many years as "the Congo question" centered 
on the charges of ' ' atrocities practiced on the native inhabitants by 
agents of the State and of the concession companies." ^^ In this 

2« Etat Ind^pendant du Congo, Bulletin Officiel, 1890, p. 105; 1896 p. 14: 1898, pp. 140, 185. (Hereafter 
the bulletin will be cited as B. O.) The three rivers named are soutnern tributaries of the Congo between 
Matadi and Leopoldville. The Pozo enters the Congo practically at Matadi, and the two other rivers 
divide the distance to Leopoldville roughly into thirds. In the districts where the sale of liquors to natives 
was illegal their manufacture also was prohibited. In the same districts whites were restricted to a ration 
of 3 liters a month by an ordinance of Dec. 11, 1899. (Keith, A. B.: The Belgian Congo and the Berlin 
Act, 1919, p. 216.) The authorities generally agree that the Congo officials tried to enforce these prohibi- 
tions, but of course the difficulties were enormous. 

^0 B. O., 1898, p. 254. 

3' General act lor the suppression of the African slave trade, July 2, 1890, arts. 8-14; Malloy, op. cit., 
Yoi. TI, p. 1970. 

32 That the Congo was badly ruled is no longer a debatable point. Affirmations and testimony to this 
effect were made by upward of 50 missionaries of many nationalities and denominations, among whom 
an American Baptist, the Reverend Sjoeblom, Vv'as one of the earliest, and a Jesuit father, Arthur Ver- 
meersch, one of the most painstaking witnesses. Officials of the State such as M. S. Lefranc, judge of first 
instance at Boma, earnestly demanded reforms. One governor general resigned rather than put in force 
certain decrees. Italy vvatndrew the permission previously granted to her army ofBcers to take service 
imder the Congo State, and the Governments of Great Britain and the United States made representations 
and suggested official investigations. Finally, even a moderate report of the official commission of inquiry 
disclosed serious abuses and at the time that Belgium took oA-er the Congo the necessity of far-reaching 
reform was almost universally reeognized. That it took more than a decade to reach this result was due to 
various factors: The great extent of the Congo and the inaccessibility of the greater part of it; the difficulty 
of gaining the confidence of the natives and obtaining knowledge of their situation without residing per- 
manently among them; the confusion caused by the conflicting testimony of those who merely traveled 
in the Congo or who resided in the well-gOA'erned districts; and the division among m-issionaries on the 
question whether they could be of greater service to the natives by denouncing the misrule or by continiiing 
their work without incurring the hostility of the State. The State was vigorous in its own defense, attack- 
ing the character and m.otives of those who criticised it, emphasizing the untrustworthiness of native evi- 
dence and citing in its behalf the text of its laws and the testimony of its oflEicials. See, for instance, the 
Bulletin Officiel, 1907, p. 240-258, and the works of ^Vack, Boulger, Castelein, Descamps, and MacDoiyiell, 
cited in the bibliography. The agitation which these charges provoked was quieted when certain reforms 
were instituted toward the close of the Leopoldian regime and has been terminated by the much more 
thorough-going reforms which have been carried out since Belgium took over the administration of the 
Congo in November, 1908, The English Congo Reform Association disbanded in 1913, considering that its 
work had been finished, (Harris, N. D.: Intervention and Colonization in Africa, 1914, p. 62.) 



BELGIUM. 91 

long and vigorously waged controversy only incidental attention 
was given to the question of the extent to which the administra- 
tion of the Congo State had evaded the liberal intentions of the 
framers of the general act of Berlin. ^^ To summarize by anticipa- 
tion the conclusion to which the evidence leads, the Congo State, not 
to say King Leopold personally, managed, in spite of the ''open 
door" provisions of the Berlin act, practically to monopolize the 
trade of the whole region beyond the small district of the Lower 
Congo. The foundation of the system of exclusion was the land 
regime. Next in importance was the method of "taxation" em- 
ployed, the exaction of forced labor from the blacks. Other factors, 
which aided in attaining the same result^ were the taxation of the 
trading companies, the control of navigation, the lack of currency, 
and the military policy of the State. 

It should be noted that the discussion of these points lies almost 
entirely outside of the field of controversy. The monopolization of 
the land and the labor exacted from the natives were established in 
the laws of the Congo State and were defended by its officials as 
policies which were both necessary and good in themselves. In 
regard to these two most important factors in the trade situation, 
the only point open to argument is the extent to which the forced 
labor exceeded the legal maximum. The authorities chiefly relied 
upon, in addition to the Bulletin Ofiiciel, are largely Belgian.'* But 
the reports of the British consuls have been found useful far their 
detailed statements and because in them attention is directed rela- 
tively more to the effects upon trade and less to the "atrocities." 
The works of H. R. Fox Bourne, secretary of the Aborigines Pro- 
tective Society, and of E. D. Morel, secretary of the (British) Congo 
Reform Association, have also been used; both authors quote their 
sources and in the great number of cases in which these nave been 
checked they have been found accurate. 

THE LAND REGIME 

ASSUMPTION OP STATE CONTROL OF SOIL AND PHODUCTS. 

During the early years of King Leopold's rule in the Congo, the 
policy followed was liberal. It is said that the monopolistic plans 
later followed were first suggested in 1890.^^ The legal foundation, 
however, had already been laid, and one of the defenses advanced by 
the Congo State was that the system rested on decrees to which no 
exception was taken at the time when they were promulgated. 

On July 1, 1885, a month before the formal proclamation of the 
existence of the Independent State of the Congo, King Leopold's 
administrator general for the Congo issued an ordinance for the regis- 
tration of all existing land titles claimed by non-natives. It was pro- 
vided by this measure that thereafter no titles obtained from natives 
would be recognized unless ^'made with the intervention of the public 

S3 It is perhaps advisable to say "liberal intentions" rather than "liberal rules," and to speak of "eva- 
sion" rather than of "violation," because it can not be denied that in their careful elaboration of the treaty 
the framers omitted certain points which should have been specified; and from the strictly juristic point 
of view the case presented by the defenders of the Congo State had some very strong pomts / 

34 Prof. Feiicien Cattier, of the University of Brussels; Auguste-Jules Wauters, editor of Le Mouvement 
Gcographique; Emile Vandervelde, member of the Belgian Parliament; Arthur Vermeersch, Jesuit mis- 
sionary; and the Commission of Inquiry, v/hich was composed of one Belgian, one Italian in the employ o. 
the Congo St^te, and one Swiss. 

3» Cattier: Etude, etc., p. 61 

185766°— 22 7 



92 COLONIAL TARIFF POLICIES. 

officer appointed by the administrator general and according to rules 
which he will lay down in. each particular case." Likewise, settlement 
on ^'vacant land" was prohibited, "vacant lands being considered as 
appertaining to the State/ '^^ A decree by Leopold, September 14, 
1886, confirmed the rights of the natives to their lands and reaffirmed 
the power of the administrator general to control the acquisition of 
land by whites.^^ ["The lands occupied by native populations under 
the authority of their chiefs shall continue to be administered accord- 
ing to local customs and usages."] In 1887 a decree of April 30 and 
an ordinance of June 30 provided for the occupation of lands above 
Stanley Pool, but at the same time an initial step was taken in the 
direction of restriction. The decree of April 30 imposed a penalty 
on all who cut trees on lands not legally assigned to them, or who did 
mining or quarrying thereon.^^ In 1886 the mineral wealth of the 
lands registered for private acquisition was reserved to the State. ^^ 
and in 1889 the hunting of elephan,ts was forbidden throughout the 
State except imder conditions and on the payment of fees to be 
established by the governor general.'^'' Elephants killed contrary to 
this decree were subject to confiscation, and anyone receiving any of 
the ivory or other spoils was guilty of receiving stolen goods. 
The decree of the previous year in regard to minerals, like the land 
decrees of 1885-86, had made reservation of the customary rights of 
the natives ; but this decree declaring ivory State property, specifically 
repealed all "usages and customs having the force of law" to the 
contrary, deahng with rubber, gum copal, and other vegetable prod- 
ucts. The next decree*^ applied only to those parts oi the State lands 
in which the natives had "not yet exploited" these resources, but it 
was officially determined a few months later that the natives had 
exploited rubber before 1885 only in two small districts. Elsewhere, 
where no native exploitation had occurred, and " notably in the islands 
situated in the zone between Bolobo and the mouth of the Aruwimi, 
and in the forests which extend in this zone along the river and 
its affluents," these vegetable products could thereafter be gathered 
only under special concessions. At this time, however, the State was 
still professing that it had no intention of competing in trade with 
individuals, *2 and the criticism of its actions led to a decree of July 9, 
1890: "to regulate the collection of ivory in the State so as to favor 

36 Seep. 93; B, 0., 1885, p. 30. 

37 B. 0., 1886, p. 138, 

33 B. O., 18S7, pp. 71, 129, 133. 

S9 Decree of June 8, 18.%; B. O., 18S6, p. 99. 

<o Decree of July 25, 1889; B. O., 1889, p. lf>9. See p. 104. 

« Decree of Oct. 17, 1889; B, O., 1889, p. 218. 

<2 M. Beeniaert, prime minister of Belgium, made statements on this subject in 1891 and 1892 before the 
Belgian Chamber of Deputies. In the former year, after referring to charges that the Congo was "only one 
vast factory,'' he said that it had happened and would happen that in exploring new regions theofflcers 
purchased certain quantities of ivory in behalf of the State. It could not be otherwise, since friendly rela- 
tions must be established with natives who did not understand that a joiu-ney would be uAdertalien with 
any other aim than trading. On May 14, 1892, he referred to ivory sold in Antwerp "very recently" and 
said that it came from territories where private commerce had never penetrated, and therefore its markejting 
by the State could result in no prejudice to the interasts of commercial companies. The native chiefs had 
also been placing theittseh-es under the protection of the State and engaging to pav tribute in kind, notably 
inivory. (AnnalesParlementairesdelaChambredesRepresentants. Ses. Ord.'de 1890-91, p. 1352; 1892., 
p. 1295.) There is some doubt as to the accuracy ot the figures given by M. Beernaert. In 189'l he said that 
tbeunimportanceof the State's dealings in ivory could be seen from the fact that the total miscellaneous 
revenues of the Congo State in 1890 had been only 119,000 francs; but bv the statement of Mav, 1892, it 
appears that ivory collected in 1890 had been sold very recently. He stated further that the Congo State 
had exported only 32 metric tons of ivory during 1891 out of a total exportation from the Congo of 165 tons. 
To convey an accurate idea in regard to the question at issue he should have excluded transit trade and 
the product of the Lower Congo and have said that from the Upper Congo the State exported 32 tons ana 
private traders less than 90. At the official valuation of that year, 32 tons of ivory v/ere worth 640,000 
francs. It is said that sales of Congo ivorv in Antwerp alone had amounted to 3,000,000 francs by November 
of 1892. (Bourne, H. R. Fox; Civihsation in Congoiand, 1903, p. 137.) 



BELGIUM. 93 

free competition/' 'Hhe Government surrenders absolutely to private 
individuals the collection of ivory in the State Domaine throughout 
all those territories situated beyond Stanley Pool, which are directly 
accessible to steamers in the Congo or its affluents, to a depth of 50 
kilometers from the banks." In the remainder of the Domaine, the 
State and individuals were allowed to trade concurrently. Indi- 
viduals, hov/ever, were required to pay a droit de patente of 2 francs 
per kilogram in the " free " areas and of 4 francs per kilogram elsewhere 
in addition to the 2-franc export duty.*^ 

The next important decree seriously restricted this liberty of pur- 
chasing not only ivory but also rubber on important affluents of the 
Congo. In September, 1891, Leopold issued a secret decree" that 
the commissioners of the Aruwimi- Welle and Lbangi districts and 
tlie chiefs of the Upper Ubangi expedition ''will take the urgent and 
necessary measures to conserve for the disposal of the State the 
products of its Domaine, notably the ivory and the rubber." ^^ This 
was followed some months later hj various local orders applying and 
extending the decree. These decrees are not published in the Bulletin 
Ofliciel, and the various authors differ slightly as to their exact dates 
and scope,^^ but it is certain that a large area in the northern part of 
the State was closed to trade, and lively protests were the result. 
Not only did the trading companies protest, but Baron Lambermont 
and Emile Banning,^' as well as the ministry at that time in office 
in Belgium, protested in the name of the treaty of Berlin. About 
the same time the governor general, Camille Janssen, resigned rather 
than enforce the new policy. ^^ Leopold, however, justified his action 
by the favorable answer of nine eminent jurists, five Belgian and 
four foreign, to a series of questions; particularly whether the theory 
that vacant lands belonged to the State was contrary to the principle 
of commercial freedom inscribed in the general act of the conference 
of Berlin, and whether, since the international servitudes are inter- 
preted restrictively, the principle of commercial liberty could limit 
the rights of the State Domaine.*^ '^ 

ESTABLISHMENT OF EESTRICTED AREAS. 

The next decree, October 30, 1892,^^ may be considered to have 
established definitely the system of State exploitation. Later modi- 
fications tended rather toward an intensification of the monopolistic 
system than the reverse. The decree began with the statement that 

•'^ B. O., 1890, p. 80. This decree followed the compromise suggested by the Pociete du B-mt Congo that, 
if the Government would keep the pledge given by Col. Strauch some years previously and cease buying 
ivory as soon as private traders established themselves in a district, the corporation would pay a tax of 
2,000 francs per ton. (Le Mouvement Ceographique. 1892, vol. 9, p. 68.1 

<4 This decree was never published in the Bulletin OfFiciel. The Bulletin Ofliciel publishes only "those 
acts which it is of interest to make public." B. O., I88ti, p. 22. 

^5 Vandervelde: Op. cit., 1911, p. 38: Le Mouvement Geographique, 1892, vol. 9, p. 76. 

« Vandervelde: Op. cit., p. 39; Bomne: Op. cit., p. 136; Wauters: Op. cit., p. 402; Le Mouvement 
Geographique, 1892, vol. 9, pp. 61, 62; Cattierf Droit, etc., p. 169. 

^7 Lambermont and Banning had been at the Brussels geographic conference of 1876, snd Lambermont 
had represented Belgium at the conference of Berlin in 18^1-85, and presided over the conference of Brus- 
sels in 1890. , 

48 Cattier: Etude, etc., p. 63; Vandervelde: Op. cit., p. 38. 

■So Cattier: Etude, etc., p. 63. Compare Cattier, Droit, etc., p. 163-171, where the author, oae of the 
jurists referred to ab.ove, argues that the general act of the conference of Berlin in prohibiting al) monopolies 
and privileges meant only monopolies and privileges in the international sense of the word, i. e., discrimi- 
natory treatment and favoi's; and that the explanation giv^n in the conference of " privileges and monop- 
olies in commercial matters'' was to be interpreted restrictively, leaving the State free to establish monop- 
olies in the civil, political, or administrative spheres. None tlie less even in this earlier work he ccniemns 
the measures taken to execute the decree of September 1891, because they did not preserve the customary 
Hghts of the natives as recognized by such decrees as those of 1885-86. 

^^ B. O., 1892, pp. 307-312. Compare Wauters: Op. cit., p. 402; Cattier: Droit, etc., p. 306; Bouine: 
Op. cit., p. 139. 



94 COLONIAL TARIFF POLICIES. 

the exploitation of rubber ^^ was abandoned to private individuals in 
all the vacant lands belonging to the State, under certain conditions 
and with certain exceptions. The exceptions, however, covered the 
larger part of the field. The decree divided the State domain into 
three parts: 

(1) Domaine Prive {privoAe domain of tlie State). — The Domaine 
Prive ^^ was a large region mainly in the northern part of the Congo, 
which the State was to exploit directly or in any other way it might 
choose. It included the basins of the Mbomu (Bomu) and Welle, 
and of the N'Dua (Ubangi) farther than 20 kilometers from the banks 
of the river; the basins of the Mangolla (Mongala), Itimbiri, Aruwimi, 
Lopori, and Maringa, etc. (art. 2). If individuals by exception were 
allowed to gather rubber here, it was only as agents for the State, 
which alone might dispose of that product. ^^ 

(2) Reserved area. — A large region to the east and southeast, 
called the reserved area, was withheld for exploitation "when cir- 
cumstances permit." This included the basin of the Congo-Lualaba 
above Stanley Falls and of the Lomami above 2° 30' south (art. 3). 

(3) Free areas. — The southwest part of the Congo, generally 
speaking, was alone left open to individuals as a free area, subject, 
of course, to rights previously acquired, and, it may be added, subject 
also to later withdrawals and concessions. There was provision, 
further, that the Government might give exclusive rights to indi- 
viduals within a radius of 30 kilometers of their factories in this area. 

In granting this freedom, however, the State levied a new tax. 
The natives above Stanley Pool were required to pay to the Govern- 
m.ent not more than a fifth, as should be determined by the governor 
general,^^ of the rubber they collected; but in lieu of this payment 
the trader might pay the Government 25 centimes per kilogram^* 

This decree of October 30, 1892, by its own terms was to remain 
in force only until February, 1901,^^ but actually it controlled the 
situation in half the Congo until 1911 or 1912,^^ and the chief change 
following its technical lapse was that the 14 companies w^hich pre- 
viously competed more or less on the Kasai Kiver joined in a monopoly 
in which the State held half the shares." Moreover, numerous 
modifications were made while the decree was in a general way in 
force, modifications which considerably limited the free area. The 
most conspicuous am_ong the changes were the addition of the reserved 
area to the Domaine Prive,°® the formation of the Domaine de la 
Couronne, and the grants to the concession companies/^ though the 
concessions were chiefly in the closed zone. 

M There is uncertainty in regard to ivory, M. Octave Louwers (Lois en vigeur dans I'Etat Independant 
du Congo) givesjlie decree of July 9, 1890 (see above, p. 92), as still in force in 1905, except for the repeal 
of the droit de patente by decree of Feb. 19, 1S91. Cf. Cattier: Droit, etc., p. 311. Bornhaupt. C. von. 
Bie Kongo- Akte und der Freihandel, 1902, p. 97, says, however, that it is generally accepted that secret 
provisions of the decree of Oct. 30, 1892, extended its terms to ivory and other products. Bourne, 
op. cit., p. 142, says in the same sense that ivory was separately legislated' for. The confusion has probably 
arisen through the effectiveness of other means used to check private trade. The few traders mentioned 
incidentally in the British Blue Books are in nearly every case dealers on a small scale in ivorj'. 

^1 So called in decree of Dec. 5, 1892. 

••- Bornhaupt: Op. cit., p. 97. 

-' The amount was fixed at one-eighth on Dec. 6, 1892. T.ouwers: Op. cit., p. 648. 

^ Arts. 5, 7, and 8. But this tax was not collected on the left bank of the Ubangi from its junction with 
the Congo to the mouth of the Welle (art. 9). 

'* J. e., the date when B,elgium could exercise its option of taldng over the Congo under the agreement 
of Tnly 3, 1890. Cattier: Etude, etc., p. 68. 

'■^ Vandervelde: Op. cit., p. 41 

^' Ibid., p. 87. The 14 companies had each been assigned a small territory of its own, but there was 
fufllcient conipetition to raise the price paid to the natives for rubber. 

i^ Cattier: Etude, etc., p. 66. 

"• oeo p. 95. 



S] 



\ 



l(f— 



BELGIUM. 95 

(4) Domaine de la Couronne (estate of the Crown). — The Domaiiie 
de la Couronne was formed by a decree (not published in the Bulletin 
Officiel) of March 8, 1896, and was enlarged by another decree of 
December 23, 19G1, which reserved an area 10 times the size of 
Belgium in the basins of the Lake Leopold II, and of the Lukenie 
and Busira-Momboyo Rivers, to be exploited for the benefit of the 
Eng's private fortune; whereas the proceeds of the Domaine Prive 
went to the coffers of the State. A porl^ion of the free area was 
included in this Domaine de la Couronne;®^ and there were further 
encroachments on the free area, chiefly on the Congo between the 
pool and the falls, but it would be difficult to define them.^^ 

Some of the agents of the State were willing to go far in enforcing 
the State monopoly of rubber and the prohibition of the trade in 
arms. Charles Henry Stokes, an English trader, in the Lake Albert- 
Stanley Falls district, was hanged in 1895.'^2 An Austrian, named 
Rabinek, was subjected to an excessive sentence for carrying on 
trade in regions not yet occupied by the State, although he had a 
license to trade and to hunt elephants. He died while being trans- 
ported to Boma for an appeal. ^^ 

EXPLOITATION BY COMPANIES. 

Much of the actual exploitation of the Congo and its resources was 
performed, not directly by the State, but by companies to which the 
State granted certain privileges. These companies and corporations 
belonged to two groups, representing different periods, different 
interests, and different modes of procedure. 

Trading companies. — The trading companies consisted of several 
foreign firms which had been engaged in trade on the lower Congo 
before the Congo Free State was established, and several Belgian 
firms with offices in the Rue Brederode, Brussels, which were organ- 
ized largely by men who had been active in establishing the State. 
These concerns were employed in strictly commercial undertakings; 
they established ''factories^' and traded cloth, beads, and other goods 
for native produce. The largest of the old trading companies was 
the Nieuwe Afrikaansche Handelsvennootschap of Rotterdam, usu- 
ally referred to as the Dutch Co., which had been doing business at 
Boma since 1860.®^ 

Concessionary companies. — The concessionary companies were al- 
most all incorporated in 1892 or later. Although for the most part 

eoCattier: Etude, etc., p. 66; Vandervelde: Op. cit., p. 42. 69th Con?., 2d s ess., S. Doc. No. 139. 
Verbatim Report of the Five Days Congo Debate in the Belgian House of Representatives, 1906, p. 16. 

61 Certain small areas reserved by the decree of 1892 have not been given special mention. Complete 
details of the regulations are not available, either in the Bulletin Officiel, or in the books, and what is given 
is not always consistent. Perhaps the Arrete of Feb. 3, 1898, specifying the parts of the Domaine open for 
sale of agricultural lands, may be taken as a definition of the free zone as it then existed, but items 4, 5, 
and 6 of this definition would all but disappear with the formation of the Kasai Trust in 1901. The Arrete 
of Feb. 3, 1898 (B. O., 1S98, p. 32) permitted the sale of agricultural lands: 

(1) In the region of Mayumbe and the cataracts, on both sides of the railroad. 

(2) On the banks of the Congo below Stanley Falls, except in the Equateur and Aruwimi districts [from 
the mouth of the Lulonga to aboftt half W'ay between Equateur and Bolobo, and from I&augi to about 
half way between the mouths of the Aruwimi and Itimbiri]. 

(3) On the banks of the Ubangi below the W elle. 

(-1) On the banks of the Kasai between Kwamoutli and Mai Munene. 

(5) Along the Sankuru, Lubudi, and LuT^efu to 50 kilometers from the junction of the last with the San- 
kuru. 

(6) Along the I^ulua, I/oanje, Djuma and its afTluents to the right. 

(7) Along the banks of the I-ulonga to 25 kilometers below Basankusu, and on the banks of the Ikelem ba. 

62 Bourne: Op. cit., p. 200, Quoting Gt. Brit., Pari. Papers, 1896, C. 8276. 
6i Ibid., pp. 265-270. 

<-* Bornhaupt: Op. cit., p. 86. 



96 COLONIAL TARIFF POLICIES. 

tliey held little or no land in full ownership, they were given tlirough- 
outVast territories the monopoly of exploiting the vegetable, and in 
some cases the mineral, products of the public domain. In these 
districts they exercised the right of forcing the natives to work. They 
paid usually one-half of then* profits to the State; they frequently 
operated under a reservation which gave the State considerable power 
in the naming of their officials ; and they represented Antwerp finan- 
cial interests rather than those of Brussels.®^ 

Strictly speaking, the concession companies were authorized only 
to exploit the State-owned products, so that the ivory already in the 
hands of the natives should have been accessible to private traders; 
but as to the practical operation of the system the testimony of an 
experienced missionary was as follows: 

In all Katanga there is not a single trader outside the Comite Special du Katanga. 
* * ^ On speaking recently with Judge Jennings at Lukafu, I mentioned these 
matters [certain applications for licenses to trade in Katanga] to him, and he said: 

"Of course, legally and according to State laws they must, if they force matters, 
receive a license for trade, but I don't thinlc they will receive it. The State will not 
cede a license where the monopoly of trade is in the hands of a big company. It is 
against all precedent." 

There are many other traders here who would gladly pay all license costs, and import 
and export dues, could permission to trade in Katanga l^e obtained. But the door of 
Katanga is unquestionably fast shut to all the legitimate trade, and will be until 
the State's hand is forced and the State becomes free in more than name.^^ 

DISPOSAL OF "free LANDS." 

In the early period, when the land policy of the Congo State was 
comparatively liberal, provision was made for the sale to individuals 
of small sites ^^ at roughly a dollar an acre. The buyers were allowed 
to choose the locations and install themselves without any formalities ; 
their titles became established by occupation and upon the payment 
of the fixed price. This liberal provision, however, was repealed on 
May 3, 1893.^® 'A few months later a new decree provided that no 
sale or lease of lands could be obtained except after authorization by 
the governor general, temporary possession was thenceforth forbid- 
den, and the prices were greatly increased.^' Under this provision 
''all the applications for commercial sites in the regions proclaimed 
freely open to trade were rejected. The exceptions are so few as to 
be negligible. In the two first zones '^ commerce was suppressed by 

^ They were Belgian corporations originally, but were reorganized in 1897 or later under the law of the 
Congo Free State. This law required no publicity. (Bourne: Op. cit., p. 242.) 

66 Rev. Dugald Campbell, Sen. Doc. No. 102, 58th Cong., 3d sess., p. 33. See the whole letter, pp. 
25-34, or in Morel, King Leopold's Rule in Africa, 1904, np. 452-462. 

67 Not exceeding 10 hectares in extent, at Ip francs per hectare. Arrgte of June 30, 1887. The 10 francs 
included the fost of surveying. Cf. Cattier: Etude, etc., p. 90. 

68 Cattier: Etude, etc., p. 90, citing Lycops et Touchard, Jurisprudence, Vol. II, p. 79. Apparently this 
decree is not given in the B. O. 

69 Decree of Aug. 9, 1893. This fixed the price of sites for commercial or religious establishments at 103 
francs i^er hectare plus 10 francs per meter along any navigable river within 150 meters. For agricultural 
purposes not more than 5,000 hectares might be bought, at 10 francs per hectare for lands at least 159 meters 
distant from navigable waters. (See B. O., 1896 p. 350, decree extending these rates until Jan. 1, 1898.) 
By the decree of Get. 8, 1897, effective immediately, rtie>rice for commercial establishments in the Upper 
Congo east of the Lukunga River (an affluent of Stanley Pool) was raised to 2,000 francs per hectare with 
a minimum of 3,000 francs for the ground of a single owner. Ten francs remained the price of agricultural 
land, but with a maximum reduced to 2,000 hectares: for greater amounts, as before, the governor general 
was authorized to fix special prices (B. O., 1897, p. 293). On Feb. 3, 1898, agricultural land was raised to 
100 francs per hectare, remaining at this price, except for a short interval ending N ov. 30, 1898, during which 
the price was set at 2,000 francs ( B. O., 1898, p. 32, art. 3). A decree of Feb. 2, 1898, instituted a commission 
of five to examine applications for land— the information given, the formalities, the alienabiiitv of the 
land sought, native rights, fulflJment of conditions, etc.— a splendid instrument of delay. (3. 0. 1898, 
p. m.) By decree of Nov. 14, 1899 (B. O., p. 278), all alienations and leases required the aoproval of th3 
King. One of the decrees of June 3, 1903, provided for annual sales of land, but apparently this had little 
practical consequence. 

7" Of the decree of Oct. 30, 1892. See above, p. 93. 



BELGIUM. ^7 

suppressing commercial products; in the third zone free commerce 
was suppressed by suppressing the merchants." ^^ 

EFFECT OP THE LAND LAWS. 

As a result of these various regulations, a land regime was estab- 
lished for the Congo, under which the area of the State was divided as 
follows : 

ia) Lands occupied by the natives, who could alienate it only 
with the approval of the governor general, not usually 
granted. 

(b) The Domaine de la Couronne (estate of the crown), exploited 

by State officials for the benefit of King Leopold's fortune. 

(c) The Domaine Prive (national domain) ,^2 the great bulk of 

the land of the State, appropriated as "vacant" land and 
exploited by State officials. There was no provision for 
alienating any of this territory to individuals;'^ but some of 
it was intrusted to concessionary companies. 

(d) Lands assigned to concessionary companies. These districts 

were large areas, where the companies collected some or 
all of the products of the domain, paying the State heavily 
for the privileges which they enjoyed. The companies 
usually did not own the land and of course could not sell it. 

(e) The public- domain, which consisted of the Government build- 

ings, public waters, roads, etc., and also of those parts of 
the "vacant'' lands which had not been declared Domaine 
Prive and which were, in theory at least, more or less open 
to exploitation by traders, although only upon burden- 
some conditions.'^'* 
Thus the land regime was in itself sufficient largely to suppress 

free trade in the territories of the Congo Free State. As Father 

Vermeersch said: 

The regime adopted coiitd in fact be veiy nearly expressed in a program of two 
articles and a nota bene^ 

Article 1. Commerce is free in the Free State. Natives and non-natives enjoy the 
same facilities. 

Article 2. Everything belongs to the State. A thousand regrets that we can give 
to commerce only a restricted sphere. 

N. B. — There is besides nothing to sell or to buy.^^ 

There remained, however, the region of the Low^er Congo where 
little of the restrictive policy of the State was applied; while even 
on the Upper Congo a few branches of commercial houses, established 
in the early days, survived both the land regime and the other 
restrictive measures adopted by the State. 

71 Cattier: Etude, etc., p. 91. 

"This, in so far as it is exploited directly by the State is called by one of the decrees of June 3, 190G, 
the Domaine National. (B O., p. 275.) 

73The decree of Dee. 5, 1892, instituting the Domaine Prive, merely mentions alienation as one Oi the 
subjects within the competence of the secretary of state for finance (Louwers, og. cit^ p. 547). The con- 
tract of Mar. 30, 1903, with the Soeiete d'etudes du Chemin de Ferdu Stanley-Pool au Katanga et de I'ltim- 
beri a I'Uele bound the State to alienate none of this Domaine Prive until certain claims for land by the 
railroad had been met. Vermeersch (La Question Congolaise, 1906. p. 102) says that the object was to 
prevent the alienation of this land, as there was no expectation that tne railroad company would fulfil the 
conditions. 

7< Cf. Cattier: Etude, etc., pp. 70,71. 

7* Vermeersch, Arthur, S. J.: La Question Congolaise, 1906, p. 112. 



98 COLONIAL TAEirr POLICIES. 

TAXATION IN LABOR. 

A second feature of the State's activity which prevented trading 
companies from carrying on commerce in the Congo was the system 
of forced labor which the administration exacted as a tax. Through- 
out even those sections where the State had estabHshed no monopoly 
in the products of the domain, and where trade was therefore sup- 
posed to be free, the forced contribution of labor to the State became 
a serious hindrance to the ordinary operations of conamerce. 
"rubber tax" and other exactions. 

The abuses to which this practice gave rise were worst in the 
districts of the upper river where few whites other than State agents 
penetrated,'^^ and m the areas conceded to the companies, most of 
which enjoyed the power of exacting this tax. In no part of the 
Congo was there any limitation on the amount of labor to be required. 
It is true that in 1903 a decree was promulgated which professed to 
limit the amount of labor to 40 hours per month, but in practice the 
tax continued to be reckoned in kilograms of rubber, and there is 
abundant evidence that previous to the report of the commission of 
inquiry in 1905, there was really no limitation in effect. By various 
devices the remuneration of the State agents, as of course the divi- 
dends of the companies, were made dependent upon the amount of 
rubber produced in their districts." The reports of missionaries and 
consuls show that in many cases the forced labor of the natives in the 
collection of their quotas of rubber occupied 20 to 26 days a 
month. '^^ 

In addition to the gathering of rubber, copal, etc., the natives near 
the stations and on the roads and rivers were compelled to provide 
porters, canoes, and paddlers, to furnish firewood for steamers, to 
maintain certain roads and rest houses and to furnish provisions for 
travelers. ^^ The State spent practically nothing on its stations; 
clearings were made, plantations cultivated, buildings erected and 
repaired, and in general the natives were forced to undertake what- 
ever the agent in charge thought should be done. Even the largest 
garrisons, using chiefly local foods, were maintained by "taxes iu 
kind, " exacted from the natives. If the stations were large compared 
to the local population, transportation of these provisions from as 
far away as 79 kilometers was added to the burden.^^ 

76 It is said that no white other than an agent of the State had set foot within the Domaine de la 
Couronne until*1903. 

"Bourne; Op. cit., p. 173. 59th Cong. 2d ssss. Sen. Doc. No. 139, pp. 13-42. Cattier; Etude, etc., p. 115. 

78 Gt. Brit., Pari. Papers, Cd. 3880,1908, p. 12, "work practically continuously"; p. 22, "allowed" to 
work "even 30 days a month"; p. 5, "work 7'davs a week ever since"; p. 53, "average not less than 20 
days"; p. 60,." the time limit was a farce"; cf. pp. 49-52, 61, also ib., Cd. 3450, 1907, pp. 46-48. Vermeersch 
(op. cit., pp. 146, 156) said that the peoples of the Congo were the most hea\^ly taxed m the world; that for 
many of the natives the tax of " 40 nours " was really a tax of all the days; that while according to the law 
the level of local wages constituted the minimum standard for the compensation paid by the State and the 
40 hours constituted a maximum for forced labor; in practice these standards were reversed— the local wages 
became t'-e maximum for compensation and the 40 hours became a minimum of forced labor. However, 
especially after the report of the Commission of Inquiry and after the rubber in some districts was exhausted, 
some of the natives escaped taxation even though they were within the zone administered by the Govern- 
ment, e. g., at Baringa. Ibid., p. 35; cf., p. 59, "In same cases [in the Upper Congo] the Chefs de Poste 
can not collect a hundredth part of the nominal tribute "; but p. 58, " The accessible workmen are in many 
cases almost continuously at work." Cf. ibid.,Cd. 1933,1904, pp. 30,31. The Commission of Inquiry stated 
that "probably the great majority of natives now escape all taxation" (p. 84). This is supported by an 
estimate by Cattier, in which he compared the profit in the labor of each native with the total income of 
the State (p. 174). 

73 Gt. Brit., Pari. Papers, Cd. 3880, 1908, pp. 5. 27. 

-0 Cattier: Etude, p. 133. Cf. Commission of Inquiry appointed by the Congo Free State Government, 
Report on the Congo, 1906, pp. 46, 51. The commission found that manioc bread exacted from the women 
near Leopoldville required 100 hours of labor per month, exclusive of the time required for c^Rrying it to 
the city (p. 47). Father Vermeersch cites Fathers Cus and Van Hencxthoven as having written " the works 
executed at Leopoldville are no doubt magnificent. But when one sees the heavy corvdes which is their 
result for the natives and the depopulation which follows, enthusiasm wanes. " (Op. cit., p. 179.) 



BELGIUM. 99 

Compulsory service was introduced in 1891 or earlier, both for 
the army and for the construction of public works — transportation, 
railroad building, making of plantations, etc. The recruits were 
kept in the service more or less indefinitely and one of the reforms 
made after the report of the Commission of Inquiry was the fixing 
of the length of service for this ''corvee" at five years for civil and 
seven yeai's for military service.^^ 

EFFECT UPON COMMERCE. 

As a result of these various exactions, the natives had no time to 
cultivate, gather, or fabricate any articles of private commerce. 
Comments upon the utter destitution of the villages were frequently 
made by observers. Foodstuffs became very high in price and 
difficult to obtain.*^ ^^ Leopoldville the Government forbade the 
purchase of foodstuffs from the natives by Europeans, because they 
were paying four or five times the rate of compensation which the 
State administration allowed.^^ 

After the system began to be reformed and the taxation in some 
places had been reduced to one-fourth of what it had been, the 
British consul reported that -''as the State since the beginning of 1907 
imposed taxation on the natives of the free zone, the people are 
refusing to make any rubber at all for the traders/' ** The reports 
of Stanley and other early travelers as well as various references in 
the Blue Books show that when opportunity offered, the Congo 
natives were keen traders. Considerable trips in their canoes for 
commercial purposes had been common before the whites took pos- 
session. But in 1905, the Commission of Inquiry found that there 
was no native industry capable of supporting trade, that artisans^ 
worked only to order, that crude cultivation gave no surplus of thd 
products of the soil, so that through large regions there were no mer-f 
chantable products.*^ Elsewhere the commission pointed out tha^ 
the natives were deterred from raising chickens, goats, etc., for general 
commerce, because the State did not pay their market value and they 
had lost faith in the white man.^^ 

The defense made by the Congo State and accepted by the Com-^ 
mission of Inquiry was that forced labor was necessary because 
otherwise the blacks would not labor, and without becoming habitu- 
ated to labor the blacks could not be civilized. The corrimissioii 
found, however, that the amount of labor exacted from the blacks 
had been excessive; and the evidence shows that the virtual monopo^ 
lizing by the State of the time and energy of the native precluded 

SI Keith, A. B.: The Belgian Congo and the Berlin Act, p. 148. The law required contracts for the engage-t 
ment of these laborers and limited them to from three to seven years. The Commission of Inquiry founci 
none of the legal safeguards regularly enforced It recommended three years as a maximum. (Op. cit., pp. 
135-140) 

«?Gt. Brit., Pari. Papers, Cd. 1933, 1904, pp. 28, 33, 40, 47; Cd. 3450, 1907, p. 48; Cd. 3880, 
1908, p. 12; 58th Cong. 3dsess., Sen. Doc. No. 102, p. 15; Ctttier: Etude, etc., p. 133; Commission of Inquiry, 
op. cit., p. 48^ 

83 Cattler: Etude, etc., p. 135. 

^ Gt. Brit., Pari. Papers, Cd. 3880, 1908, p. 9. 

66 Commission of Inquiry appointed by the Congo Free State Government, Report on the Congo, 1906, 
pp. 23-25. The conclusion that money should be introduced seems to indicate that the commission was not 
entirely certain of the validity of its own statement. 

" Commis?4on of Inquiry, op. cit.. p. 54. While there is considerable evidence in opposition, the Com- 
mission of Inquiry found that " everywhere in the Congo and notwithstanding appearances to the co-itrary 
the native gathers rubber only under coercion either direct or indirect.'? (Commission of Inquiry, op. cit., 
p. 112.) 



IQO COLONIAL TARIFF POLICIES. 

for a large part of the accessible population the possibility of par- 
ticipation in commercial operations. 

TAXATION OF TRADING COMPANIES. 

In regard to taxation, the strictly commercial enterprises, both 
foreign and Belgian, were in a helpless position, in spite of the careful 
provisions of the general act of the conference of Berlin which guar- 
anteed them equality of treatment. In a well developed country, 
where the local interests presumably would have sufficient political 
strength to prevent excessive taxation, and where the State could 
not afford to ruin the local companies, equality of treatment guaran- 
teed to foreign firms would probably be a sufficient protection. 
But the Congo State was an absolute monarchy, without a local 
white population and without local business organizations, except 
as corporations registered there, but directed from Belgium. Of the 
Belgian concerns, the strictly commercial fu'ms, as distinguished 
from the concessionary monopolies, had lost the favor of Leopold 
about 1893 and were, no less than were the foreign traders, com- 
mercial rivals of the State. 

Up to 1890, the taxation was not unduly heavy, but in that year 
the State for the first time exported a considerable amount of ivory, 
and its intention to compete with the private companies became 
evidenf. Heav}^ taxation was defended on the ground that Leopold's 
private fortune was no longer able to bear the burden of sustaining 
the Congo State. 

According to an account published in 1890, in HoUand, no less 
than 24 separate taxes had been imposed upon the Dutch Company. 
As a consequence the company withdrew its agents from the IJpper 
Congo for a year or two, and the sudden decrease in the exports 
from the Congo has been attributed to its cessation of activity.**^ 
There Vv^ere taxes on buildings, on steamers and on small vessels, on 
employees and laborers, on the recruiting of porters and workers, on 
the caravans traveling over the roads, and on the cutting of wood.*^^ 
Ten francs a head had to be paid for the black laborers employed, 
and 50 centimes for each square yard covered by the buildings in 
which they were lodged. In 1896, every a^ent of commerce who 
neither paid a personal tax nor had a tax paid for him as laborer or 
domestic was required to pay 10 francs annually for a license.*^ The 
droit de 'patente on ivory was repealed in 1891, and the personal 
taxes were reduced one-third when the import duties were imposed,^^ 
but this hardly can be considered a decrease of taxation, for the tax 
on ivory was shortly replaced by a provision by which the State 
took one-half of the ivory collected. '^^ In 1898, a license fee of 
5,000 francs was imposed for every establishment thereafter founded 

87 Exports for 1890 and following years: 8,242,000, 5,354,000, 5,488,000, 6,206,000, 8,762,000 francs. The 
authorities are not very definite in their statements concerning the withdrawal of this company from the 
Congo State. Bom-ne, op. cit., p. 139, says it wittidrew for a couple of years. V\'auters attributes its with- 
di-awal chiefly to the ivory tax (op. cit. p. 401). In 1898 the company had six boats on the upper river, 
and m 1901 it was one of the constituent companies of the Kasai monopoly, receiving 340 shares, which 
was more than was given to any other company except the Society- du Haut Congo. (Cattier: Etude, etc. , 
p. 196.) Figures from ib., p. 74. 

88 Le Mouvement Geogi-aphique, 1892. vol. 9, p. 85. 

^9 B. O., 1896, p. 351. The license had to be stamped each time the holder entered or left the State, and 
ior this the fee was 5 francs. 
90 Apr. 9, 1892, B. O., 1892, p. 151. 
w Of. Gt. Brit., Pari. Papers, Cd. 3880, 1903, p. 9. 



BELGIUM. 101 

to collect rubber in the free zone.*^ This account of the taxes levied 
is not exhaustive, and there is no doubt that they were vexatiously 
numerous and really burdensome. It is certain that under the 
peculiar conditions of competition with the State the guarantees of 
the treaty of Berlin in respect to taxation were not effective. 

STATE MONOPOLY OF TKANSPORTATION. 

From the earliest period the Congo State had its fleet on the upper 
river. In 1897 it purchased seven vessels from the Societe du 
Haut Congo and about that time possessed a majority of the com- 
mercial vessels on the Upper Congo, including most of the larger 
craft. ^^ In 1905 or 1906 it bought ''a considerable fleet" from 
the Dutch Company and apparently made its monopoly practically 
complete except for certain boats belonging to concessionary com- 
panies and some owned by the missionary organizations.^^ These 
other vessels, however, did not interfere with the Government's 
monopoly, because the concessionary companies were corporations 
of limited powers and these powers did not include the carriage of 
freight outside of their own concessions. They could not carry 
even their own freight and their ov7n agents without paying to the 
State the same charges as if the transportation had been by State 
vessels, nor could they carry a single passenger, even as a guest, 
without the special permission of the State authorities.^^ Evidently 
they could carry no freight for others, except by charging rates 
equal to the State rates plus the cost of maintaining the service, 
including the considerable taxes mentioned above. ®^ It is obvious 
that these vessels also could be of no service to the private trader. 

In addition to the taxes, the private vessels suffered from the rule 
that they might cut no wood within half an hour's steaming of the 
State's wood piles— the State having selected all the best places. ^^ 

EFFECT OF STATE MONOPOLY UPON TRADE. 

This State monopoly v/as unsatisfactory to the traders in several 
particulars: 

It was strictly forbidden for the State vessels to carry any private 
goods until cargoes belonging to the State had been transported, 

92 Cattier: Droit, etc., p. 307, B. O., 1898, p. 28. For cutting wood, licenses were required according to 
the quantity consumed by steamers of different sizes. The charges for this privilege varied origin-ally 
from 500 to 1,000 francs annually (B. O., 1890, p. 179. Decree of Sept. 1, in force Jan. 1, 1891), but later 
these rates were much increased and were made to vary with the tonnage and speed— 240 francs per 
ton for vessels not exceeding 7 knots, and 10 francs additional per ton per each half knot of speed beyond 
7. Vessels imder 10 tons paid less. (Decree of July 7, 1898. Wauters, op. cit., p. 380.) In 1903 the 
Societe du Haut Congo was paying 10,000 francs on a single boat which the English consul thought did 
not exceed 30 tons. This was in addition to an annual license for the steamer, which cost 600 francs; a 
license for the master, of 20 francs; a personal tax of 30 francs on each European in the crew, Including the 
master; a personal tax of 10 francs on each black in the crew, and 3 francs as an engagement license for each 
of these blacks. (Gt. Brit., Pari. Papers, Cd. 1933, 1904, p. 24.) Wood cut for local use was taxed according 
to the length and diameter of the pieces, but not over 20 francs per cubic meter. Further rules regulated 
the cutting of wood for export. (Cattier: Droit, etc., p. 310; decree of July 7, 1898, B. O., p. 182.) 

93 Wauters: Op. cit. pp. 379, 380. 

94 The French Government had a few for communication with the French Congo, and there were also 
native craft which were sometimes available for individuals. Gt. Erit., Pari. Papers, Cd. 3450, 1907, p. 50, 
saj^s, as of September, 1906, that the purchase of these vessels had been "within a few months." 

95 Ibid, Cd. 1933, 1904, p. 24. In Cd. 3880, 1908, p. 10, the general statement is m^ade that no private 
organizations could carry passengers without paying to the State the rates it would have received had it 
carried them. Frederick Starr says: "Arrangements must be made by strangers and it is only when the 
State is favorable that they may travel or ship goods. The company boats are not allowed to carry outside 
passengers or freight, but are obliged to carry State people or freight in cases of especial need." (StaiT, 
Frederick: The Truth about the Congo, 1907, p. 64.) 

i^s Although the missionary societies had a number of vessels, these were mostly small and were wot 
allo-wed to carry passengers or freight other than the property and personjiel of th3 missions, except gratui- 
tously. (Starr; Op. cit., p. 64.) 

97 Gt. Brit., Pari. Papers, Cd. 1933, 1904, p. 24. 



102 COLONIAL TAKIFF POLICIES. 

or to take other passengers in preference to State officials. ^^ On the 
same principle, the steamers on the Lualaba, belonging to the Stanley- 
Yille-Ponthierville Railroad Co., carried only the property of the rail- 
road or of the State — they were '4n no way open to the public. "^ 

When in 1897 the Congo State pmxhased several vessels from the 
Societe du Haut Congo, the administration undertook to maintain 
regular services on the upper river. These services did not extend, 
however, to all the navigable waters and were not so extensive as 
the general language of some of the official reports might indicate. ^^ " 
With the bulk of the business in the hands of the State, private 
companies were at a disadvantage if they wished to enter that field. 

The rates charged on the State lines were heavy.^ From interior 
stations to Stanley Pool the rate on ivory was 500 francs per ton, 
on rubber 200 francs, and on other goods 150.^ The rates upstream 
were about twice as great.^ 

ABSENCE OF CURRENCY. 

PAYMENT FOR LABOR IN GOODS. 

In the Congo Free State there was practically no currency in cir- 
culation, except limited quantities in the Lower Congo." Rarely was 
the native allowed to pay his taxes in currency, even when he could. -"^ 
Ihe State made pa3^ments to the natives, not in currency, but in 
cloth, brass wire, beads, or salt. These payments in the gross were 
considerable in amount, for the law required that the natives should 
l)e paid the lo^ial rate of wages for the labor exacted from them.^ 
The Commission of Inquiry found that the com.pensation was "in 
every case quite inferior to the real value. '^ ^ Without attempting 

-8 ExceDtions could be made onlv by special orders of the governor general. Eecrce of Feb. 19, 1896, 
B. O., 1896, p. 17. 

93 Gt. Brit., Pari. Papers, Cd. 4079, 1908, p. 7. This may have been the case only for a limited time. 

99 a The consular reports frequently speak of the lack of means of transportation. Of course, it can not 
be stated positively that if left to private enterprise the navigation service would have developed more 
rapidly, and it has been pointed out Wiat the State showed greater boldness than the companies in in- 
creasing the size of its vessels. 

1 Wauters: Op. cit. p. 381. Gt. Brit., Pari. Papers, Cd. 3880, 1908, p. 47, and Cd. 1933, 1904, p. 24, "but 
perhaps not excessive." The budget of 1902 for the transportation service showed estimated expendi- 
tures of 2,023,000 francs and receipts of 3,100,000 francs. Ibid, p. 24, citing B. O., January, 1903. This 
probably includes sums for construction, as the State was increasing the number of its vessels; e. g., 
Cattier, Etude, etc., p. 343, speaks of 80 vessels, though possibly they did not all belong to the State. 
Cf. MacDonnell, J. de C: King Leopold II, His Rule in Belgium and the Congo, 1905, p. 238. 

2B.0.,1896,p. 17. 

3 Wauters: Op. cit., p. 381. It may be observed that the rates were recently very rruch less, although 
the State apparently relied less on forced labor, e. g., for the cutting and loading of wood. In 1913 the rate 
from Stanleyville to Leopold ville for ivory was half of that quoted above and for other goods, including 
rubber, was only 60 francs per ton. For transportation only, white passengers paid 66 francs downstream 
and 1.35 francs upstream; tne blacks paid one-fourth of these rates. (B. 0., 1913, pp. 1903, 1108.) 

■• The scarcity even in the Lower Congo required the legalization of French currency. Gt. Brit. Pari. 
Papers, Cd. 4079, 1908, p. 5. The report of the King-sovereign, published in the Bulletin Officiel of May, 
1907, states that "now the coinage of the State is in common use in a great part of the Lower Congo in 
the district of Banana and in a part of Mayumbe, the native tax is in general received in currency, and 
it will be the same shortly in the district of Matadi. Currency is being introduced likewise in Katanga, 
where, thanks to the development of mining enterprises, the economic situation is such that the native 
is acquiring the notion of money and its use." (B. O., 1907, p. 216.) 

5 Gt. Brit., Pari. Papers, Cd. 4079, 1908, p. 5, and Cd. 3880, 1908, p. 22, quoting B. O., 1906, p. 232. 
Even after the recommendation of the Commission of Inquiry the governor general did not see fit to intro- 
duce currency into the Upper Congo, except in certain centers. " Even there the taxes will be demanded 
as a general rule in the form of labor or produce." (Gt. Brit., Pari. Papers, Cd. 3880, 1908, p. 4. Cf. Cd. 
3450, 1907, p. 60.) 

^ Instructions of 1896; Law of 1903. 

' Commission of Inquiry, p. 54. Rubber, copal, and other products of the domain, since thev were con- 
sidered the property of the State, were not paid for; the payment was for the labor of collecting them. 
Whether the payments made to the natives were as grossly inadequate as the critics of the Congo State 
affirm (e. g., Gt. Brit., Pari. Papers, Cd. 3880, 1908, pp. 23, 58, 61; Cd. 1933, 1904, pp. 27, 31, 38) is not 
of concern in the argument here made, except that the smaller the amount of compensation given the 
greater is the force of the argument. The Commission of Inquiry found that though a maximum had 
been prescribed no minimum had been established for the payment of native labor. "It happened conse- 
quently that very often the remuneration given to the natives was insufficient; sometimes even they 
were paid in goods which had no value in that locality." So also of the requisitions of foodstuffs. (Ibid., 
pp. 36, 54.) The laborers who were compelled to enlist in the civil service of the State were paid 3 to 6 
francs a month and food. (Ibid., p. 139.) 



BELGIUM. 103 

to pass upon the merits of the controvers}^ over the adequacy of the 
payments made to the natives, some facts regarding the reaction 
upon trade of this payment in goods may be noted. 

EFFECT OF PAYMENT IN GOODS UPON TRADE. 

Had the State levied taxation in money, the natives would have 
been compelled to sell their products to traders to obtain this money. 
Had the State paid for this ''labor tax" in money, instead of in 
goods, as was actually the case, the natives would presumably have 
bought European wares from the traders. The system actually used 
not only excluded the traders from most of the purchasing trade, 
but made the State a competitor of the traders in the distribution of 
European merchandise. Isolated trading establishments could do 
little to introduce currency so long as the State almost never accepted 
it for taxes and so long as the trader could not buy, or at least could 
not buy anything which he could afford to ship out.^ One of the 
reforms of 1906 was an order to open State supply houses (magasins 
d'Etat), to be stocked with everything that could strike the native 
fancy. The British consul said that this provision was intended to 
render impossible competition with the State in the retail trade, 
which was about all that was left to commercial houses.® 

In certain cases the payments in goods exceeded the demand. 
Natives who had been far from home on long terms of service sometimes 
received in payment more cloth than they could carry back with 
them, and sometimes local centers were overstocked with goods of 
one or two varieties. In these cases the goods would be thrown on the 
market at reduced prices, and would interfere with the sales and cut 
down the profits of any traders within reach of the competition.^^ 

But even when the native, after paying his taxes, had a surplus of 
time or produce, the absence of currency, together with the monopoli- 
zation by the State of the marketable products, prevented the trader 
from selling goods in such a way as to take a profit from the country. 
A British consul, speaking of the insufficiency of the currency, said: 

As matters now ?t^nd, even at Leopold ville, the small trader can not compete with 
the State, owin.i? to the heavy freights and the excessive taxation to which he is ex- 
posed, and further up country it would be absurd even to think of opening a store in 
districts where the native can not pay in money and may not pay in produce, since 
the only articles which could be profitably accepted by a trader in exchange for goods 
of any kind are the private property of the State or of a concessionary company.'^ 

Thus the effects of taxation in labor and of the State monopoly of 
the chief products were intensified by the absence of currency and the 
methods of the system by which the State paid the natives in goods. 

8 Ibid., Cd. 3880, 1908, p. 57. 

» Ibid., Cd. 3450, 1907, p. 64. The avowed object of the order was to meet the criticism that if the native 
did have money there was throughout large regions no place for him to buy anything. Cd. 4079, 1908, 
p. 5. This was true not only of the natives. A British traveler entering the Congo State from the 
east fovmd that he had to return to Ujiji (German East Africa) in order to buy cloth with which to pay 
his porters, because his money was useless in the Congo and Stanleyville was the only place above Leopofd- 
A'ille where cloth was for sale. Cd., 3450, 1907, p. 57. The State was also accused, at least in 1892, 
of trading in arms and powder, which, in conformity with the treaty of Brussels, it prevented the traders 
from doing. As arms were the first desire of the natives, the State had a great advantage over its rivals 
in attracting the trade of the blacks. Bourne, p. 138, quoting a statemient by Parminter, an ex-official 
of the Congo State. 

10 Ibid., Cd. 3880, 1908, pp. 4, 12, 22; Cd. 1933, 1904, p. 22. In other cases villages were so pressed to fur- 
nish supplies that they were forced to buy them from more distant villages, paying in goods, which led 
to a wider distribution of the European merchandise. This emphasizes again the poverty of these na- 
tives—even the payments by the State for ttieir continuous labor left them nothing in the way of products 
(or cash) which they could exchange in the open market for further European goods. (Ibid., Cd. 1933, 
1904, pp. 38, 59. ) " The missionaries, Catholic and Protestant, whom we heard at Leopoldville, were unani- 
mous m reporting the general misery which exists in that region." (Commission of Inquiry, p. •*8.) 

11 Ibid., Cd. 4079, 1908, p. 6. It should be observed that this was long after the completion of the railroad 
around the cataracts. 



104 COLOIsTIAL TAKIFF POLICIES. 

As the former limited the trader's power of buying from the native, 
the latter Hmited his opportunities for selhng. 

OTHER OBSTACLES TO TRADE, CIVIL AND MILITARY. 

In the early nineties before the State's policy had been worked out in 
a legal way and even before the decree of September 1891 was known 
in the Congo, there were complaints that the State officials were intimi- 
dating the natives and preventing them from trading with the mer- 
chants.^^ In various minor ways the regulations of the State con- 
tinued to interfere with trade. The Commission of Inquiry found not 
only that natives were forbidden to move their villages, but that 
individuals had been punished for leaving temporarily without a 
permit.^^ 

The British consul reports, as one of the reasons for the depression 
in trade in the Stanleyville district in 1906, that the regulations 
were too severe in regard to the handling of ivory, requiring trans- 
portation to certain centers for taxing and marking. ^^ 

Traders were compelled to pay not more than the legal wage to 
carriers and to deposit 40 francs caution money for each man hired 
and to make various reports to the officials. ^^ Many complaints 
were made that the various regulations of the State were unfairly 
administered.^^ 

The concessionary companies in their territories followed the 
example of the State. In the Katanga all applications for British 
factories on Lake Moero were rejected, and while farm leases were 
offered, the terms were such that British settlers would not take 
them.i^ 

The obtaining of ivory was limited also by the hunting laws, as 
early as October 5, 1889. Part of the ivory — "not exceeding gen- 
erally 50 per cent" — ^was exacted by the State.^® 

The military policy and activity of the State injured the traders in 
three ways: by devastation, by closing of certain areas, and by plun- 
dering. 

First, much of the country was devastated. One of the letters pre- 
vioudy q^uoted states that half a dozen witnesses have seen that "half 
a day's journey below our factory of Upoto to Boumba, inclusive, 
there is not an inhabited village left — that is to say, four days' 

12 See letters published by Morel. Edmund D.: King Leopold's Rule in Africa, 1904. pp'. 39-42. 

13 Commission of Inquiry, op. cit. , pp. 20, 90. Tlie commission noted that the law gave the blacks com- 
plete liberty to move, but that the officials rendered this provision nugatory. 

M Gt. Brit., Pari. Papers, Cd. 3880, 1908, p. 9. 

15 Ibid.^ p. 10; B. O., 1896, p. 264. Decree of Oct. 16. The caution money was returnable six months 
after tlie return of the men. 

18 Gt. Brit., Pari. Papers, Cd. 3880, 1908, p. 15. 

" Ibid., Cd. 3880, 1908, p. 35. 

18 For hunting elephant? an ordinance required permits with a fee of 500 francs for each permit, plus .50 
francs for each rifle in the party and 10 francs for each flintlock musket. Elephants killed in defense of life 
or property were the property partly or wholly of the State, as the local officials decided. Any killed by 
State officials belonged to the State. (Louwers; 0]). cit., p. 397.) By an ordinance published in October, 
1896, B. O., 1896, p. 272, native chiefs might hunt elephants imder the above mentioned decree, giving not 
more than half of the ivory to the State. ' * The other half ' " should be their property and after proper mark- 
ing sliould be subject to no other tax except export duty. However, tdie commissaries of the district 
might prohibit the hunting of elephants for certain periods and places. Further decrees of 1901 and 1904 
(Louwers: Op. cit., p. 399, 402; B. O.,1901, p. 82: 1904, p. 14) included many regulations directed, more 
plainly than those given above, to the conservation of animals. Some kinds of animals were listed which 
v.'ere never to be killed, and others, including elephants, whose young or females with young were not to be 
killed; and others, again including elephants, were to be killed only in limited numbers. Tusks weighing 
less than 2 kilograms could not be sold or exported. The Aruvrimi ilasinand other territoiies werereserved. 
Hunting between Oct. 15 and May 15 was entirely forbidden. Later, tiie sale and oven the .?ift of meat or 
other parts of animals dming this part of the yoar was forbiddeu. 



BEI^GIUM. 105 

steaming through a country formerly so rich, to-day entirely ruined ?'^'* 
Kasongo is said to have had a population of 60;000 before the Belgian^ 
blotted it out, in their war with the Arab slave traders, and Nyangwe, 
though not so large, had been the center of trade of all the eastern part 
of the territory ^ — ^'all roads lead to Nyangwe" — but was reduced to a 
single house. 2*^ Much is said in the consular reports on the decrease of 
population. While the Congo authorities denied the reliability of the 
evidence, most of their attention was given to explaining the decrease 
by attributing it to causes, chiefly sleeping sickness and smallpox, 
other than those mentioned by their critics.^^ Part of the apparent 
decrease of population was rather a decrease in its accessibility. The 
natives lost confidence in the whites, and many villages moved 
farther from the rivers and the State posts. ^^ 

Second, the military situation was a cause or a pretext for declaring 
certain districts closed to trade. Thus the Maringa River was closed 
to all expeditions other than those of the State, by order of September 
7, 1892, ^'due to the presence of Arab bands,'' as the Bomu and Welle 
had been closed by order of February 14.^^ The Germans complained 
that the military operations in the eastern part of the State prevented 
the development of trade with German East Africa. ^^ As in other 
respects, so in this also the concession companies imitated the State. 
The declaration of martial law in the Abir concession for three 
months from Jul}^ 26, 1906, was looked upon by the British consul as 
an attempt to keep out the missionaries. ^^ 

Third, in connection with the mxilitary raids, the State collected 
much ivory. As is seen in the figures for the ''dead" and ''live" 
ivory sold in Europe, the greater part of the supply which came from 
the Congo in the early days represented the savings of the chiefs 
through many years. Considerable quantities fell into the hands of 
the State, having been either seized in raids— e. g.," nearly £25,000 
worth at Kasongo ^^ — or exacted as tribute, or required for the 
redemption of host ages. ^^ 

EFFECTS ON TRADE. 

The volume of private commerce in the Congo, which continued 
to exist in spite of the restrictions established by the State, would be 
very difficult to estimate in figures. In the Upper Congo there is 
no disagreement concerning the fact that it scarcely existed. In a 
rough way, the division of the trade between Belgium and other 
countries shows the development of the State-controlled trade. 

» Letters from O. S., Yambuya, Feb. 6, 1891, Morel: Op. cit., p. 39. Vessels on the Congo move only by 
day. So also the State made war on the villages from Lulonga to Bassankusu. (Letters from T. S., Ba- 
sankusu, Sept. 17, 1892, ibid., p. 41.) 

20 Bomne. Op. cit,, p. 158. 

21 Gt. Brit., Pari. Papers, Cd, 2097, 1904, p. 13; Cd. 1933, 1904, pp. 24, 70. Bolobo had decreased in 
population from 40,000 to 7,000 or 8,000. An illustration of the reason alleged by the critics of the Congo 
State to accovmt for much of the depopulation is seen by orders quoted in the debate in the Belgian Chamber 
of Deputies — "burn them out if they fail to get 5 kilograms (of rubber); exterminate them if they cut the 
vines." (59th Cong., 2d sess., Sen. Doc. No. 139, p. 100.) 

22 Commission of Inquiry, p. 90. ' ' It often happens that the natives in order to avoid the payment of the 
imposts, especially the rubber tax, migrate either singly or as a mass and establish themselves in another 
region." 

23 Morel: Op. cit., p. 41; Bourne: Op. cit., p. 138, 

24 Bourne: Op. cit., p. 165. 

» r,t. Brit., Pari. Papers, Cd. 3450, 1907, p, 31. 

26 Morel: Op. cit. p, 26. 

27 Letters of E. B., Oct. 20, 1891, and Oct. 15, 1892, quoted by Morel: Op Git., pp. 39-41, Le Mouvement 
Geographique, 1892, vol. 9, p. 08. 



106 



COLONIAL TAEIFF POLICIES. 



TOTAL TRADE OF THE CONGO. 



The total trade of the Congo underwent an enormous growth 
durmg the years of its exploitation and development by King 
Leopold. No record was made of imports until the collection of 
import duties commenced in May, 1892, but an estimate places the 
total imports of 1886 at less than 1,800,000 francs.^^ Special im- 
ports ^^ increased rapidly from less than 9,000,000 francs in 1893, 
the first complete year for which statistics were recorded, to 22,000,000 
francs in 1897, and the-reafter remained relatively constant. 

Special exports ^^ increased from less than 2,000,000 francs in 
1887 to a maximum of almost 60,000,000 in 1907. Beginning with 
the year 1899, exports _greatly exceeded imports, and the value of 
the outgoing commerce rapidly rose to more than twice that of the 
incoming trade. ^^ 

Table I show^s the value of imports and exports, general and special, 
for alternate years from 1886 to 1908. 

Table I.— Trade of the Congo from 1886 to 1908. 
fin thousands of francs. I 



Year. 


Imports. 


Exports. 


Spec:al. 


General. 


Special. 


General. 


1S861 






1,633 

2,609 

8,242 

5,488 

8,762 

12,390 

22,163 

47,377 

50,070 

51,891 

58,278 

43,372 


6,684 


1888 






7,392 


1890 






14,110 


1892 . , 


2 4, 984 
11.195 
15, 228 
23, 084 
24, 724 
18,081 
23,344 
21,478 
26,586 


" 5, 679 
11,8.54 
16,040 
25, 18.5 
31,803 
20, 700 
28,632 
29, 702 
32, 271 


7,530 


1894 , 


11,0.32 
15,091 
25,397 


1896 


1888 


1900 


51,776 


1902 


56,962 


1904 


64,093 


1 906 


76, 781 


1908 


56,'867 







' July 1, 1886, to June 30, 1887. 

'^ May 9 to Dec. 31, 1892. Import stat:st:cs were not recorded before May 9, 1892. 

This great increase of trade, especially of exports, was due pri- 
marily to direct exploitation by the State or its concessionary com- 
panies of the region of the Upper Congo, above Stanley Pool. This 
may be shown from a further examination of the official figures which, 
from 1889 on, show the export trade of the Upper and Lower Congos 
separately by articles. These figures show the striking contrast be- 
tween the two regions in the articles which compose the bulk of their 
trade and in the rapidity of its development. 

28B. O., 1896, p. 33. 

29 Special imports include merchandise entered for immed:ate consumpt'on or withdrawal from ware- 
house for consunlption. General imports include all merchandise entermg the country, whether for con- 
sumpfon, transit, or warehouse. 

i" Special exports are exports of domestic origin. General exports are all exports, including reexported 
imports from other territories. 

in 1908 increased importations concided with a fall in the price of rubber, and the value ol the expo-tj 
exceeded that of the imports by only 65 per cent. 



BELGIUM. 107 

CONTRAST IN THE TRADE OP THE UPPER AND THE LO'VtER CONGO. 

The exports from the Lower Congo consisted chiefly of palm oil and 
palm kernels.^'^ The totals were relatively stationary. The exports 
from the Upper Congo w^ere ivory, rubber, and (later) white copal. 
The, trade in ivory developed rapidly before and during the first sev- 
eral years of the State policy of exploitation and reached a maximum 
in 1895.^^ The rubber trade of the Upper Congo remained practically 
undeveloped until the State began its exploitation. After 1891 it grew 
by leaps and bounds, and when it reached its maximum in 1903 it 
constituted almost nine-tenths of the total exportation of the Congo 
State. The opening of the railway around the Falls in 1900 brought 
two changes: Copal, which previously could not bear the expense of 
transportation, began to appear as an export of the Upper Congo, and 
most of the rubber and ivory which formerly were entered as products 
of the Lower Congo now appeared in the statistics of the Upper Congo. 

The contrast between the Upper and the Lower Congo is explained 
rnuch less by the difference in the natural products of the two than 
by the difference in their history and by the factor of transporta- 
tion. A number of foreign firms in the Lower Congo, which were 
established even before Stanley's first trip down the river, remained 
there in business ^^ throughout the State regime. They consolidated 
their position before the State adopted its policy of exploitation. 
No complaints of State interference with commerce, or at least none 
of serious character, came from this region. ^^ A large grant of land 
was made to the railway company, and a tax payable in groundnuts 
was collected, but no monopolies w^ere granted and none of the land 
was put into the Domaine Prive.^^ The trade of the Lower Congo, 
accordingly, underwent no great change during the administration of 
the Congo Free State. The chief exports of the region continued to 
be palm products. Their quantity slowly increased and the trade in 
these products was not diverted to Belgium. 

In the Upper Congo, on the other hand, until the completion of the 
railway the only products which could bear the expense of trans- 
portation were rubber and ivory. Rubber existed in great quantities, 
but had not been an article of commerce among the natives. There 
was little development until the State adopted the policy of forced 
labor. The quantity of rubber exported then developed with tre- 

•52 In the closing j^ears of the Congo State cocoa became an important item. A minor product of the 
Lov/er Congo had been groundnuts, in which the natives paid their taxes. In 1903 the taxation was 
reduced bv three-fourths and the exportation fell off rapidly; for successive years beginning with 1903 it 
was 66,000', 13,000, 9,000, 4,000, and 5,000 francs. 

33 Except for 1908 and V^iOd when the higher price gave a greater total valuation. 

^'i In 1885 there were four firms in Banana alone, and one of these, the Dutch Company, had 25 branches 
between that place and Nobi. (Le Mouvement Geographique, 1885, Vol. II, p. 21.) 

'■^^ The statement is made in a memorial to Congress in 1904 that "in the Lower Congo free trade, ham- 
pered by taxation, still exists m diminishing volume. (58th Cong., 2d sess., Sen. Doc. No. 282, p. 13.) 
This statement is only partially borne out by the official figures; the trade in palm products was not de- 
creasing, but after the opening of the railway there had been a sudden aecrease, almost an annihilation, 
of the exportation of rubber from the Lower Congo and a striking decrease in the exportation of ivory, as 
may be seen by comparing the figures for 1900 and 1901, Between 1898 and 1909 the figures give the des- 
tination of the''dilferent articles o'f special commerce and show that two-thirds of the palm products were 
,'^ent to the neighboring Portuguese colonies. The trade in these products vi^as largely in the hands of the 
Nieuwe Afrikaansche Handelsvennootschap, commonly called the Dutch Company. 

36 T]-ie law restricting the taxes unon the^ natives to 40 hours per month reduced the taxation in the 
Lower Congo by three-fourths. (Cattier: Etude, p. 132.) The Commission of Inquiry decided that this 
" taxation 'Mn groundnuts— for which a payment was made to the natives by the State— was unprofitable 
and the business should be turned over to private commerce. 

185766°— 22 8 



108 



COLONIAL TARIFF POLICIES. 



meiidous rapidity until it attained its maximum in 1903.^^ With the 
exhaustion of some regions and the introduction of various reforms 
in the administration, the quantity decreased, though rubber con- 
tinued to be the predominant article of commerce. Table 2 shows 
this predominance of rubber and illustrates the other points just 
made. 

Table 2. — Exports from the Upper and Lower Congo, by articles , 1889-1909.^ 

[In thousands of francs.] 



Year. 


Special exports 

(total). 


Rubber. 


Ivory. 


White 
copal, 
Upper 
Congo. 


Palm 
oil and 

palm 
kernels, 

Lower 
Congo. 


Cocoa. 


Upper 
Congo. 


Lower 
Congo. 


Upper 
Congo. 


Lower 
Congo. 


Upper 
Congo. 


Lower 
Congo. 


Upper Lower 
Congo. Congo. 


1889 


1,979 

2,2ol 

4,076 

8,101 

12,-390 

19,3.53 

32,318 

48, 139 

48,892 

53, 166 

38, 795 

51, 526 


2,318 
3,093 
2, 131 
2,842 
2,757 
2,810 
3,749 
2,350 
2; 9^8 
.5,112 
4,577 
4,641 


50 

51 

9c 

2,382 

7,792 

15,245 

23,968 

43,875 

43,302 

46,599 

2 30, 132 

8 41,839 


409 
275 
5 

500 
520 
606 

1,133 
91 
176 

1,890 
647 
730 


1,929 
2,209 


341 
627 


297 
1,426 
1,086 
1, 793 

867 


1, 509 




isyi 


2,170 
1,510 
2,179 
1,749 


, 


1893 


3,719 




1895 


5,714 
4,519 
4,106 
.5,349 
3,897 
3,791 
4,435 
5, 930 
6,458 


131 

397 

213 

486 

68 

49 

20 

6 

125 


1897 


i 


IS 8 


1,947 
2,028 
2, 175 
2.431 
2,665 
2, 364 
2,819 






im' 

1901 


1 

4 

53 

20 


2 


1904 

1£06 


271 
509 


Ic).i8 

1909 


928 
950 



1 From the Bulletin Oftlciel, except those of 1893 for rubber, ivory, and pakn faroducts. 

2 Decrease chiefiy in value. 

3 Decrease in quantity, but at a price per unit half again as great as in the preceding year. 

The Upper Congo trade was almost entirel}^ in the hands of the 
State and of the concessionary companies. It was frequently said 
that in this region, particularly on the main river above Stanley 
Pool, private trade "does not exist."^^ ''AH the independent mer- 
chants have long since disappeared,'^ said Morel, writing in 1904,'^ 
Similar expressions might be quoted from other well-informed writers, 
but they must be taken as generalizations, since a certain amount of 
private trade persisted in the "free area" of the Upper Congo. The 
Kasai River was exploited by 14 different companies, and its trade 
was not made a monopoly until 1901. On the Ikelemba and Lulonga 
Rivers numerous small companies or traders were established, though 
the cream of the resources of the Lulonga had been skimmed before 
the river basin was thrown open to trade.^^ The free area between 
Stanley Falls and Isangi was divided among the factories represented 
at Stanleyville, each of v/hicli had a monopoly in its own villages.'^^ 

Roger Casement, British consul, reported that there were four 
trading houses at Leopoldville, run by seven Europeans, besides tv/o 
British West x^irican petty traders; but they did "scarcely any busi- 
ness in native produce, of v\'hieh there m.ay be said to be none in the 

37 The quantity exportedin 1903 was 5,903,000 kilograms, and in 1904, 4,811,000 kilogi-ams. Thisdecrease 
was more than accounted for by the products of the Domaine Prive, the Domaiue de la Couronne,andQf 
the "Abir" and the Societe Anversoise. The first two exported 800,000 Idlograms less in 1904 than in 
1903, and the two latter 670,000 less. There was a further fall in the two latter in 1905 of 350,000 kilograms. 
The total export decreased steadily to 4,464,000 kilograms in 1908 and then fell to 3,686,000 in 1909. In 
1909 the price averaged 11.35 francs per kilogram, as against 6.75 in the previous vear, and rhe value of the 
total export increased by some 35 per cent. (Le Mouvement Geographioue, 190!6, p. 522.) 

ss ,58th Cong., 2d sess., Sen. Doc. No. 282, p. 12. 

39^£orel: 0p.cit.,p. 31. 

40 Gt. Brit., Pari. Papers, Cd. 1933, 1904, p. 44. See map at end of Cattier, Etude, etc. 

« Ibid., Cd. 3450, 1907, p. 49. 



BELGIUM. 109 

district, but rely upon a cash trade in Congolese currency, carried on 
with the large staff of Government employees, both European and 
native." ''_ . 

The British vice consul at Stanle3^ville made a number of refer- 
ences to isolated traders, chiefly Indians ; and the follov/ing statement 
shows that there was some private trade: 

If trade and navigation were really free and guarded by proper police, German 
trade through Ujiji, v»'hich akeady exists to some extent, might be greatly developed, 
as well as that with the British colonies and Zanzibar. * * * The operations of 
the Dutch traders who up to a few months ago had quite a considerable fleet of steamers 
on the Upper Congo and its affluents, and of the French in Brazzaville and of the 
Portuguese would also benefit greatly. * * * All these have practically disap- 
peared from the Upper Congo, "^ 

Remnants of private trade no doubt persisted in certain parts of 
the Upper Congo throughout the Leopoldian regime, but it remained 
substantially true, as the British vice consul observed, that the only 
way in which goods could be introduced there was to persuade the 
State to introduce them." 

TRADE BETWEEN THE CONGO AND BELGIUM. 

The extent to which the activities of the State closed the Congo 
ito outside commerce is indicated by the statistics for the trade with 
Belgium. Although in this case there was no differential duty in 
favor of the home country, and although trade conditions were 
nominally equal for merchants of all nationalities, nevertheless, the 
political connection, and above all the monopolization of the resources 
to so great a degree by the State, rapidly established a great current 
carrying the bulk of the trade to and from Belgium. This tendency 
made its appearance, however, even before monopolization was 
adopted as a policy. This early appearance was chiefly due to tYv^o 
factors — the great expenditures of the State in exploring and govern- 
ing the country ^^ and the preponderance of Belgian interests in the 
commercial companies which^were organized to trade in the Upper 
Congo. While many of these companies included some foreign 
capital, their control was predominantly Belgian.''® 

In the years immediately following the organization of the Congo 
State, Belgian trade formed an almost negligible proportion of its 
total. In 1888 exports to Belgium were only 250,000 francs out of a 
total of 7,392,000^ while those to Great Britain were valued at 
937,000 francs, and those to Holland at 4,943,000 francs (figures for 
general trade). In that year only 210 francs worth of rubber went 
to Belgium, the exact amount credited to the Upper Congo. Of the 
250,000 francs of total exports to Belgium in 1888, ivory accounted 
for 245,000; and the Upper Congo already surpassed the Lov/er 
Congo in the exportation of ivory, 564,000 francs to 533,000 (special 

« Ibid., Cd., 1933, 1904, p. 22; Commission of Inquiry, p. 112. 

43 Ibid., Cd. 3450, 1907, p. 50. 

« Ibid., Cd. 3880, 1908, p. 10. 

■'s In 1905 imports showed a decrease of 3,300,000 tranes as compared with the previous year. The Bulletin 
Officiel makes this comment: "The decrease in imports is explained chiefly by the suppression by the 
State, with a view to economy, of a certain number of posts." (B. O., 1907, p. 146.) In 1891 there were 
six Belgian companies estal)iished in the Congo with a capital of 34,000,000 francs. In 1807 there wera 
f7 Belgian companies with a capital of 143,000,000 francs and 28 foreign companies with a capital of 40,000,000. 
(Ibid., p. 147 No details are given in support of these figures ) 

4"^ This was true both of the early commercial and of the later concessionary companies, and even wheu 
their names suggest otljerwise, e. g., the Anglo-Belgian India Rubber Company — the "Abir''— had only 
a small portion of British capital, and this was later withdrawn. 



no 



COLOXTAL TARIFF POLICIES. 



commerced In 1890. when the Upper Cono-o exported 3.905.000 
francs of iroiy and the Lower, 764.000. Belgium received 2.047.€00 
and Holland' only 1,961,000 francs.-' As the exports of ivory 
from the Lower Congo fell off, Belgiimi received an increased share 
not only of the total, but of that from the Upper Congo as well. 
In 1895^ 97 per cent of the total export of ivory (general commerce) 
went to Belgium. At that time ivory was still twice as important 
in the trade as rubber, so that it is not surprising that the share of 
Belgium in the total exports of aU commochties was 9,000,000 out 
of 12,136,000 francs. In 1898, for which year the destination is 
given for special as well as general commerce, Belgium's share of the 
special commerce was 87.2 per cent. In 1901 this proportion had 
gTown to 93 per cent. This increase in Belgiimi's share was due 
primarilv to the rapid increase of the rubber exports from the L'pper 
Congo. ^^ In absolute values there was no decline in the exports to 
other foreign countries. 

Table 3 shows the leading exports from the Congo, and the share 
of each that went to Belgiimi from 1SS9 to 1908. For the earlier 
years, ngm^es are available only for the destination of the general 
commerce, and until 1S98 the items in the table refer, accordingly, 
to- that classification. 

Table 3. — Exports from the Congo, by articles, jSS9-1908. 
[In thousands of francs.] 



Generalex-|;orts. Special e:q)orts. 



Year. 



: To 
I Bel- 
i eiiira. 



Total. 



To ; 

Eel- j Total, 
gium. i 



Eubber. j Ivory. l^^gS^ ^-^^ copal. 



To 

Eel- 
sium. 



Total. 



To 

Bel- 

giiun. 



! To ' 

Total. I Bel- : Total. 

jgium.: 



To 

Eel- Total, 
gium. 



GENERAL EXPORTS. 



1889. .. 

JS9i.. 

1^3 

imo 


556 8,573 
1,514 \ 10.536 
3,185 1 7,515 
9,000 i 12,136 
12,88:3 17,457 

; 


:::::::: 





4,298 
5,354 
6,206 
10,943 

15, 147 


49 


• ! 

2,137 1 507 2,526 

2,320 i 1,363 ; 3.318 

1,-849 1 3,807 

3,197 ! 6,148 j 6,334 

8,927 ; 4,S49 6,004 

1 1 


2,2-1 

131 , 3,091 

' 1,705 

2S9 2,368 


149 
S4 
2 


l.%7 


8S 1.894 67 


92 



SPECIAL EXPORTS 



18GS 
1901. 
1&C4. 

1908. 



.! 20,187 
.1 49.327 
.| 58,912 
.! 64,595 
.! 45,958 



25,397 
54,003 
64,093 
76,781 
56, §67 



19,329 
47,065 
48,532 
54, .308 
39.429 



22,163 


15.237 


15,851 i 


50,488 


42,848 


43,966 


51,891 


43,333 


43,478 , 


58,278 


48,4a3 


48.489 ■■ 


43,372 


30, 762 


30,780 




1.793 



The Bulletin Officiel for 1896 states that practically none of the 
import trade in 1886 was in Belgian goods; and the 'fact that the 
houses engaged in trade were Dutch, "English, French, and Portu- 
gese, v,hile there was only one Belgian employee among their staffs, 
is evidence in confirmation of this statement". With large imports 
on behalf of the State and of the commercial companies organized 



'- iu t t-e5e years, the source -Lpper or Lower Conffo— is given onlv for the special roinrDerce: the destina- 
tion only for the general commerce. The figure 1.961.000 mav mcliide a large fraction of transit trade. 
'* In 190ii with the fail m price of rubber it decreased to 90.9 per cent. 



BELGIUM. 



Ill 



in and directed from Belgium, and with the building up of direct 
shipping communications, it is not surprising that a considerable 
share of the trade was soon coming from Belgium. Whether Great 
Britain, Holland, and Germany lost trade in the Congo before 1892 
can not be stated positively in the absence of statistics, but the 
figures given in Table 4 show that in 1892-1897 Belgian trade 
increased with the increase of the total; there was no diminution 
in the value of imports from the other leading European countries. 
The rapid growth of imports ceased with 1897 and at the same time 
Belgium's percentage of the total ceased to grow and from 1897 to 
1909, inclusive, it varied only between 69 and 74 per cent.^^ 

Table 4. — Imports of the Congo Free State (special trade), by countries, for selected 

years.^ 

[In thousands of francs.] 





Total. 


Belgium. 


England. 


Germany. 


Year. 


Value. 


Value. 


Per cent 
of total. 


Value. 


Per cent 
of total. 


Value. 


Per cent 
of total. 


1892 2, 3 


4,985 
9,175 
11,195 
10,686 
15,228 
22, 181 
23, 102 
23,344 
20,075 
21,478 
26,586 
22,127 


1,913 

4,423 

6,228 

6,300 

10,162 

18,272 

16,716 

17,370 

13,889 

15,285 

19, 734 

15,507 


38.4 
48.2 
55.8 
59.0 
66.7 
73.4 
72.4 
74.4 
69.2 
71.2 
74.2 
70.1 


1,511 
2,591 
2,481 
2,037 
2,601 
2,593 
2,881 
2,634 
2,721 
2,741 
2,419 
2,673 


30.3 
28.2 
22.2 
19.1 
17.1 
11.7 
12.5 
11.3 
13.6 
12.8 
9.0 
12.1 


411 

907 

933 

908 

935 

1,175 

1,059 

637 

679 

801 

1,023 

745 


8 2 


1893 2 


9 9 


1804 2 


8 3 


1895 


8 5 


1898 .. . 


6 1 


1897 


5.3 


1901 


4.8 


1904 


2.7 


1905 . 


3.4 


1906 


3.7 


1908 


3.9 


1909 , 


3.4 







Year. 


Holland. 


Portugal and 
possessions. 


Franco. 


All other. 


Value. 


Per cent 
of total. 


Value. 


Per cent 
of total. 


Value. 


Per cent 
of total. 


Value. 


Per cent 
of total. 


1892 2, 3 


562 
724 
704 
863 
669 
911 
869 
535 
772 
629 
574 
480 


11.3 

7.9 
6.3 
8.1 
4.4 
4.1 
3.8 
2.3 
3.8 
2.9 
2.2 
2.2 


305 
318 
553 
422 
456 
350 
191 
621 
516 
594 
903 
727 


6.1 
3.5 
4.9 
3.9 
3.0 
1.6 

2:? 

2.6 
2.8 
3.4 
3.3 


90 

78 

70 

153 

155 

281 

435 

852 

791 

810 

1,059 

1,139 


1.8 
.9 
.6 
1.4 
1.0 
1.2 
1.9 
3.7 
3.9 
3.8 
4.0 
5.1 


193 

134 

226 

3 

250 
599 
951 
695 
707 
618 
874 
856 


3.9 


1893 2 


1.4 


18942 


2.1 


1895 




1896 


1.7 


1897 


2.7 


1901 


4.0 


1904 


2.9 


1905 


3.5 


1906 


2.8 


1908 


3.3 


1909 


3.8 







iProm B. O. de I'Etat Ind. du Congo. 

^The figures for these j'ears are from Le Mouvement G^ographique. 

'May 9-Dec. 31, 1892. 

The following table shows the percentage of the chief items of 
trade which had their immediate source in Belgium in 1895 ^^ and 
in 1909. They show that the share of Belgium increased in every 
item except dried fish, flours, machinery and tools, and iron sheets, 
wire, bars, nails, etc. ; and with the further exception of steel rails, 
in which Belgium had a monopoly in both years. 

'-^ Figures for 1902 are not available. The other years omitted from the table show percentages which 
fail within these limits. 
K' First year for which these figures are available. 



112 



COLOXIAL TARIFF POLICIES. 



Table 5. — Chief imports into the Cojigo Free SfMefrom Belgium and all other countries, 

1895 and 1909.^ 

[In thousands of francs.] 





1895 


1909 


Item. 


Total 

imports, 

value. 


From Belgiiun. 


Total 

imports, 

value. 


From Belgium. 




Value. 


Per cent. 


Value. 


Percent. 


Cotton goods: 

Dved 


1,161 

832 

470 

68 

814 
342 
334 
168 

631 
314 
152 
564 
295 
326 
306 
704 
140 
319 
237 


819 
196 
344 
31 

413 

2S7 
170 
113 

46 
100 

49 
275 
185 
326 
265 
6S8 
126 
119 

72 


70.5 
23.6 
73.2 
45.6 

50.7 
8:3.9 
.50.9 
67.3 

7.3 
31.8 
32.2 
48.8 
62.7 
100.0 
86.6 
97.7 
90.0 
37.3 
30.4 


3,812 
661 
5-29 
359 

2,421 
5.56 
602 
397 

301 

1,094 

397 

1,614 

294 

1.348 

191 

989 

235 

877 

205 


3,143 
182 
456 
237 

1,-507 
4.88 
66 
221 

74 

359 
187 

1,133 
235 

1,348 
186 
834 
191 
531 
69 


82.5 


Printed 


27.5 


Gray 


86.2 


White 


66.0 


Foodstuffs: 

Conserves ^ 


62.2 


Rice 


87.4 


Dried fish 


11.0 


Flours 


55.7 


Liquors: 

S pints 


24.6 


Wines 


32.8 


Beer 


47.1 




70.2 


Building materials . 


79.9 


Steel rails 

Copper wire 


100.0 
97.4 


i^acMnerv and tools * . . . ... 


84.3 




81.3 


Hardware ' 

Glass and gla-'^vv are 


60.5 
33.7 







1 From Bui. Of. de I'Etat Ind. du Congo. 

2 "Conserves ''=meat, fish, n. e. s., legumes, butter, cheese, etc. 
s Including biscuit, starch, etc. 

* Not including marine engines and other equipment for vessels. 

' Includes kitciien ahd household utensils, and miscellaneous articles for natives (bracelets, machetes, 
looking glasses j. 

summary: difference between theory and practice. 

The Congo Free State afiorded a significant example of the nulH- 
fication in practice of provisions carefully drawn to safeguard freedom 
of trade and the open door. A study merely of the treaties and 
tariffs of the State would point to complete equality of trading oppor- 
tunities for merchants of all nationalities. But the elahorate treaty 
stipulations guaranteeing equal trading facilities to the subjects of all 
countries were rendered almost entirely inoperative by legislative 
and administrative action, w^hich was nevertheless stoutly defended 
as within the sovereign rights of the State and as not contrary to the 
treaties.^^ 

At the conference of Berlin in 18S5, where the Congo Free State 
first received general recognition, the powers agreed that ''all flags 
without distinction of nationality shall have free access to the w^hole 
of the * * ^ territories above enumerated. * =^ ^ Wares of 
whatever origin imported into these regions under whatsoever flag 
* "^ '^ shall be subject to no other taxes than such as "^ * * 
must be equally borne by the subjects themselves and by foreigners 
of all nationalities. ^ ^ ^ ^q power which exercises or shall 
exercise sovereign rights in the above-mentioned regions shall be 
allow^ed to grant therein a monopoly or favor of any kind in matters 



51 E. g., B. O., 1907, pp. 240 fl[. 



BELGIUM. 113 

of trade." ^^ These liberal regulations were intended completely to 
preserve the open door in the Congo; and traders of all nations might 
have expected to find in its territories the same free facilities for 
buying produce and selling their wares. In fact, however, private 
merchants had little opportunity either to sell or to buy, since the 
bulk of the commerce, including almost the entire trade of the vast 
interior region known as the Upper Congo, was kept in the hands of 
officials and privileged companies for the benefit primarily of the 
private fortune of Leopold II, King of the Belgians. 

The government of the State during the period in c|uestion w^as 
vested wholly in King Leopold, acting not as the constitutional ruler 
of Belgium, but as the absolute monarch of the Congo Free State. 
By law^s and decrees of his administration, and by various acts of 
administrative repression on the part of his subordinates in the Congo, 
the larger part of the Upper Congo v/as effectually closed to private 
traders, and the bulk of the commerce was reserved to the State or to 
the concessionary companies which were practically agents of the State. 

The most important instrument in accomplishing this result w^as 
the land law\ Throughout vast regions all the land not actually 
occupied by the natives was claimed by the State as vacant land and 
reserved for exclusive exploitation, either for the State itself or for 
the private fortune of King Leopold, or for a few concessionaires. 

Ivory and rubber, the two most profitable (and for a long time the 
only profitable) products of the Upper Congo, were declared ''do- 
maniaL' property, and trade in these products by outsiders was pro- 
hibited or greatly restricted. Through these regions the natives were 
forbidden to collect the natural products even from lands which they 
had always considered their own and to sell them to private traders. 
In the so-called free area, w^hile some private trade survived, its 
competition w^ith the State was greatly hampered by heavy taxation 
and by various restrictions. 

In addition to the land laws, other decrees and regulations con- 
tributed to maintain the trade monopoly. Lender the guise of taxa- 
tion the government of the Congo Free State required from the na- 
tives under its control either forced labor or an equivalent paid in 
certain native products. The demands were often so great as to leave 
the natives little time or opportunit}' to accjuire any surplus for sale 
or barter. Trade was further hampered by the failure of the authori- 
ties to introduce currency into most of the regions under their control. 
The military situation was the cause or pretext for declaring certain 
districts closed to trade. Finally, although treaties forbade rate dis- 
criminations upon the raihvays and canals required for transporta- 
tion around the rapids and cataracts of the Congo, administrative 
regulations of various sorts hampered shipm.ent of goods by outside 
traders. 

The testimony of witnesses, both unofficial and official, both ad- 
versely and favorably critical, is that under the regime of King Leo- 
pold — before the annexation of the Congo Free State to Belgium- as 
a colony, and the introduction of reforms by the Belgian Govern- 
ment — nothing remotely resembling an "open door" obtained in the 
Congo, notwithstanding all the treaty regulations, and notwith- 
standins: the absence of dift'erential tariffs or customs discriminations. 

62 See p. 85. 



114 COLOXIAL TAETFF POLICIES. 

. Without doubt largely as a result of these State activities and 
these restrictions on private enterprise, Belgium's proportion of the 
export trade of the entire Congo, negligible in 1888, increased in a 
decade to about 90 per cent of the total. State control of commerce 
also accounts in large part for the fact that Belgium's share of the 
import trade increased by 1897 to 70 per cent. These increases oc- 
curred in spite of the fact that in the Lower Congo, where foreign 
traders had been well established long before the Belgian occupa- 
tion, freedom of trade Wfis restricted to a comparatively slight degree. 
During the 3'ears of King Leopold's government it was in this lower 
district almost alone that outside traders were able to carry on com- 
merce. 

Prior to 1885 there had been free trade and eq^uality of opportu- 
j}ity on the Congo. At the conference of Berlin it was agreed that 
this freedom and equality should be written into the public law of 
Europe. Experienced diplomats put this purpose into the words of 
the general act of the conference of Berlin. Yet within a few years 
the Congo State and a few concessionary companies were monopo- 
lizing the products of the greater part of a million square miles. In 
the light of events it is now obvious that the diplomats when faced 
by a new problem failed to express themselves in such a way that the 
spirit of their agreement could be evaded only by a clear violation 
of its specific provisions. Freedom of commerce was destroyed in 
the Congo by invoking the proprietary rights of the State, which 
were not mentioned in the treaty, and which the State stoutly main- 
tained were in no way limited by the treaty. Alternatively it may 
be said that the defect of the general act of the conf-erence of Berlin 
laA^ in its failure to provide effectively for its interpretation and its 
continuous application. No periodic sessions of the conference v\'ere 
provided for — no international body ^^ was created to supervise the 
execution of the act, and no judicial body was instituted or author- 
ized to determine whether or not the various possessors of territory 
within the free-trad-e area were maintaining that freedom and equality 
which vrere designed by the framers of the act. ^ 



PART II.— THE BELGIAN CONGO. 

I. Introduction. 

ANNEXATION OF THE CONGO FREE STATE BY BELGIUM. 

The Congo Free State was the outgrowth of an organization which 
was, in form at least, international. L^'ntil the recognition of the 
State in 1885 only a minority of the explorers and other agents em- 
ployed had been Belgian. But as the enterprise was dominated by 
Leopold II it was even then looked upon as Belgian and the State 

53 The general act provided for an international commission, bat its province was limited to the regula- 
tion of the navigation of the Congo, and the commission was in fact never instituted. By article 31 '-'the 
signatory powers of the present general act reserve to themselves to introduce in it subsequently, and by 
common accord, such m.odifications and improvements as experience may show to be expedient." This 
stipulation for revision by unanimous consent was legallv superfluous and practically useless. The con- 
ference at Brussels which revised this act by allowing import duties up to 10 per cent, met before the 
Congo State adopted its policy of monopoly and exploitation, and the suggestion for revision of the rates 
of import duty at the end of 20 years has been ignored. But see p. 120, infra. 



BELGIUM. 115 

was sometimes loosely spoken of in the eighties and nineties as a 
Belgian colony. In 1889 Leopold made a will by which he bequeathed 
the Congo to Belgium. In the following year, when the Belgian leg- 
islative bodies authorized a loan to the Congo State, they obtained 
the option of taking over that State at the end of 10 years. In 1895 
the Congo State was again in financial difficulties and a project for 
its annexation was prepared by the Belgian minister of foreign affairs. 
This project was not favorably received by public opinion and the 
matter was dropped. In 1901 the question of exercising the option 
obtained 10 years previously was debated, but through Leopold's 
influence it was laid on the table. After the report of the Commis- 
sion of Inquiry in 1905 and the report of another special commission 
early in 1906, the question of annexation took a prominent place in 
Belgian politics for more than two years, Leopold himself recom- 
mended this annexation, but he was reluctant to give up the Domaine 
de la Couronne, and long negotiations were necessary on this and 
other points. A law for the organization of a colonial office and for 
the government of the prospective colony was carefully drafted and 
discussed at length. This law and the treaty of annexation were 
finally enacted on October 18, 1908, and a month later (Nov. 15) 
the Congo was formially transferred to Belgium.^^ 

SITUATION AND COMMERCE. 

Belgium's only colony covers an area of 909,600 square miles- 
eighty times the size of Belgium. The peoples of the Congo are of 
many tribes, chiefly of Bantu stock. The population has been esti- 
mated official^ at 7,000,000, but as there are 4,000 square miles to 
every station or post of the Government it is not surprising that this 
estimate is questioned. The European element in January, 1920, 
numbered only 6,971, of whom 51 per cent were Belgians. 

The Congo lies on l3oth sides of the Equator and wholly within the 
Tropics, but the southeastern province, Katanga, which extends 
beyond 13° south, and which lies at an altitude of 3,000 feet and 
upward, is a ''white man's country." Small mountain ranges 
separate the main area of the Congo from the coastal plain along the 
Atlantic Ocean and from the basin of the Zambesi Kiver, and much 
higher ranges run through and around Katanga and up the eastern 
boundary of the colony. Within these mountains lies a vast plain, 
once an inland sea. Most of the country is heavily wooded, but there 
are large savannas, especially in the northern part. The rivers 
which cross the plain are navigable for great distances and form one 
of the world's most magnificent systems of waterways. The Congo 
carries a volume of water second only to that of the Amazon and its 
descent of some 600 feet between Leopoldville and Matadi offers the 
greatest unused water power in the world. 

The exportable wealth of the Belgian Congo until shortly before 
the war consisted chiefly of ivory and the native vegetable products — 
rubber, gum copal, and palm kernels. Coffee, cocoa, and rubber plan- 
tations had been established, but had not begun to produce on a 
large scale; in 1912 and 1913 only cocoa was exported to the value 
of more than a million francs. Tobacco, rice, cotton, and ground- 

t^ Keith: Op. cit., pp. 137-144; Harris, N. D.: Op. cit., pp. 47-64. 



116 



COLOXIAL TARIFF POLICIES, 



nuts were also grown. Among the various exports, rubber, tliou^li 
it no longer constituted 80 per cent of the total as in 1900-1908, still 
ruled without a rival; through 1912 it continued to constitute more 
than one-half of the value of the total exports. Since 1912, through 
causes for the most part unconnected with the war, the situation 
has completely changed. Owing to the rapid development of plan- 
tation rubber in Malaya the price of rubber fell sharply in 1912 and 
1913 and attention in'^the Con^o was turned to gum copal and palm 
products. About the same time the development of the mineral 
resources of the Congo began to show striking results. The South 
African railway system was extended into the Katanga region and a 
rapid development of the copper mines began. Gold mining was 
also developed on a larger scale and in more recent years diamonds 
have been found in large quantities in the valley of tlie Kasai. The 
most recent figures show that both copper and gold now exceed in 
value the highest point ever reached by rubber. Palm products 
appear to have become of greater importance than rubber, and dia- 
monds than ivory. ^*^ Table 6 shows the chief exports — vegetable, 
animal, and mineral^of the Belgian Congo during recent years, and 
bring-s out strikingly the decrease in the value of the rubber exported 
and the increase in copper. 

Table 6. — Principal exports from the Belgian Congo (general trade).- 
[In thousaads of francs.] 



Year. 



1910 


96, 459 
79,666 
85,024 
72,366 
61,762 
83,230 
148, 770 
185,548 


1911... 

1912 


1913 


1914 


1915 


1916 


1917 


1918 . .. 


1919 1 



General 

exports, 

total. 



Rubber.! Ivory. 



76,030 
50,424 
53, 571 
27,520 
10, 631 
11,107 
17, 473 
20,300 
3,050 
18,976 



9,381 
9,237 
9,358 
11,675 
7,092 
4,589 
7,929 
5.426 
20,386 
39,552 



Palm 

kernels. 



3, 101 
3,504 
3,206 
4,344 
3,623 
5,181 
12,763 
25,704 
5,639 
15,279 



Palm 
oil. 



2,916 
2,032 
1,380 
1,;W2 
1,574 
2, 130 
3,351 



2,708 
14,581 



Copal. 



1,316 
3,356 
6,393 
8,935 
6,294 
2, 815 
5,380 



7,416 
15,548 



Gold, 1^1^^' L_ I 



crude. 



All 

ore and i Coeoa. i other 
crude. ! products. 



2.515 1 

3.119 i 

3; 322 i 

6,000 

3,195 I 
13,524 i 

9,801 I 
2 12,000 13 85,000 
54,374 I. 



6,316 
5,807 
685 
15.520 
28,548 
63,914 



1,071 

900 

1,129 

1,036 



1,391 



54 
778 
858 
10,829 
13,833 
15,336 
28, 159 



<5,992 
16,43? 



1 General trade inclades exports having their origin outside of the Belgian Congo. These figures can not 
therefore be compared vrith the figures for the special exports of the Congo Free State given on page 110. 
The figures for special exports are available for the years 1910-1912 and show that one-third of th^ rubl^er 
and more than one-thii-d of the ivory included in general exports had its origin outside of the Belgian Congo^ 
For gold, copal, and c-ocoa the figures are practically identical. The more impsrtant differences are shown 
in the following figures for the special trade: 



Year. 


Rubber, j Ivory. 


Palm 

kernels. 


Palm 
oil. 


Coppar. 


1910 


51,016 i 6,056 
34,427 5,683 
34,519 1 5,552 


2,6.57 
2,879 
2,777 


1,798 
1,732 
1,253 


,. 


1911 

1912 


1,903 
4,115 







2 3,553 kilos valued at over 12,000,000 francs. In presenting the Belgian budget for 1920 M. Delacroix 
stated that it was expected that the production of gold in the Congo would reach 80,000,000 francs during 
the year. (The Times (London), Apr. 29, 1920.) 

3 27,500 tons valued at over 85,000,000 francs. 
'- Diamonds only 

The import trade presents a feature unusual among the compara- 
tively new colonies of Africa — its value seldom equals that of the 
export trade. The value of principal gToups of imports for the years 
1913 and 1916 are shown in Table 7. 



s6 See Table 6 but note that the figures (general trade) for rubber and ivory probably include foreign 
products to the extent of one-third or more, while a much smaller part of the palm kernels and palm oil 
is produced outside of the Belgian Congo and little or none of the copper. See note 1 to Table 6. 



BELGIUM. 



117 



Table 7. — Principal imports into the Belgian Congo (general trade), 
[In thousands of francs.] 



Article.' 



Cottons 

Provisions 

Wines, spirits, beiOr . 

Machinery 

Iron, steel, copper 

Steamers and ships 

Arms, ammunition, etc 
All other articles 

Total 



1913 



87,902 



10,418 


11,794 


8,681 


7,913 


3,087 


2,789 


7,917 


4,220 


6,580 


2,429 


4,447 


839 


819 


2,2.32 


45,953 


37, 122 



),358 



1 "The goods imported, apart from iron and steel materials and other requirements for governmental 
purposes, consist of cheap articles for native usd, such as cotton fabrics, loin cloths, blue and white striped 
prints, indigo blue drill, red scarlet baize, cotton covers, ready-made and second-hand clothing, all of the 
cheapest kind, a few British sunhats, straw hats, and German slippers. Germany in 1912 supplied nearly 
all the perfumes and perfumed soap, padlocks, scissors, pocket knives, imitation pearl beads, mirrors, 
machetes, and beer. Other articles in demand are matches, pipes from Gouda, condensed milk, biscuits 
(British or French), Portuguese sardines. Dutch gin, Portuguese wines, Belgian sugar, American or Aus- 
tralian corned beer, American tobacco, Dutch crockery, soap, starch, rice, and Au&tro-Hungarian flour." 
(Keith: Op. cit., p. 253.) 

At the time when the Congo became a colony of Belgium its trade 
was already largely with that country — above 90 per cent of the 
colony's exports went to Belgium and 70 per cent of its imports came 
from Belgium. Until the beginning of the war there was no great 
change in these percentages,^^ but the war of course practically annihi- 
lated Belgian trade. Table 8 gives the official figures for the shares 
of the leading countries in the import trade of the Belgian Congo in 
specified years during the period 1910-1916. As in other similar 
tables, the figures indicate rather the immediate source than the 
origin of the products. As the United States had no direct lines of 
communication with the Congo, most of its products were credited 
to Belgium, Great Britain, or Germaii3\ 



Table 8. — Special imports into the Belgian Congo. 
[In thousands of francs.j 





Total 
value. 


From Belgium. 


From Great Britain. 


From Germany. 


Year. 


Vahie. 


Per cent 
of total. 


Value. 


Per cent 
of total. 


Value. 


J'er cent 
of total. 


1910 


37, 182 
54,721 
44, 893 
54,250 


27,260 

35, 785 
• 22, 709 


73.3 

65.4 
50.6 


8,798" 
5,670 
5,345 
32,974 


10.2 
10.4 
11.9 
60.8 


1,066 
4,079 
3,002 


2.9 


1912 


7.4 


1914 


6.8 


19^6 












. 





From France. j From the Netherlands. 

1 


Ail other. 


Year. 


Value, 


Per cent 
of total. 


Value. 


Per cent 
of total. 


Value. 


Per cent 
of total. 


1910 


1,24S 

1,141 

887 

5,074 


3.4 
2.1 
2.0 
9.4 


621 
1,113 

682 

468 


1.7 

2.0 

1.5 

9 


3,189 

6,930 

12,668 

a 15, 734 


8.5 


1912 ^ 

1914 


12.7 

27.2 


1916 


a 29.0 







a This item includes from Rhodesia 4,842 thousands, or 8.9 per cent; Union of South Africa 5,136 thousand* 
or 9.5 per cent; United States 1,304 thousands, or 2.4 per cent. 
»7 1912 shows a decrease in the Belgian share of imports to 65.4 per cent. Figure for 1913 are not avaiJaol©. 



118 COLOis^IAL TAEIPF POLICIES. 

II. Government and Making of Tariffs. 

The organic act of the Belgian Congo is the law of October 18, 1908, 
known as the colonial charter, and its amendments. By this law all 
legislative power not otherwise specified in the charter is conferred 
upon the King of the Belgians; but by general legal theory and by 
the text of the law, the right to intervene at any time and pass a law 
on any subject is reserved to the legislature. The King, moreover, 
in this case is merely the constitutional figurehead who can act only 
through his ministers, and the lav/ specified that the legislative 
decrees shall be made on the proposal of the minister of the colonies, 
and that every act of the King (executive as well as legislative) 
must be countersigned by a minister.^^ 

Three of the reservations regarding legislative power are of some 
importance. By Article X of the charter, custom duties and taxes 
of all kinds may be imposed only by decree of the King. The dele- 
gation to the governor general of this power was thus precluded; 
but the intention of the fram^ers of the bill to allow the executive a 
free hand was nullified by an amendment by the legislature which 
provided that the decrees should come into force onl}- after approval 
m the next budget law.^* As treaties have been so important in the 
tariff history of the Congo, it should be noted that those relating to 
the Congo territory are subject to the same rule as those for Belgium 
itself — the requirement of article 68 of the Belgian constitution that 
treaties of commerce and certain others shall receive the approval 
of Parliamxcnt.^^ 

The executive, except in cases of emergency, may exercise its 
legislative powers only after the opinion of the colonial council (in 
Brussels) has been obtained, and if this opinion is not followed, it is 
necessary for the colonial minister to publish the reasons for w^hich it 
was disregarded. The colonial council consists of eight men ap- 
pointed by the King, and six elected, three by (but not from) each 
house of the Belgian legislature.^^ 

The colonial charter gave large pov\-ers to the governor general of 
the Congo. He had general supervision over the administration, and 
might enact legislative measures in cases of urgent need, but these 
lapsed if not confirm_ed within six months. He was assisted by a 
secretary general. State inspectors, seven directors of departments, 
and by vice governors general. B}^ a policy of devolution or decen- 
tralization begun by a decree of March 22', 1910, and continued to 
and in that of July 28, 1914, these vice governors general acquhed a 
large part of the powers of the governor general within then- re- 
spective provinces. The various decrees which developed this policy 
during the 5'ears 1910-1912 applied only to the Katanga, but on 
November 3, 1913, an Eastern province was created, and on July 28, 
1914, the whole Congo was divided into four provinces — Katanga,^'^ 
Eastern, Congo-Kasai, and Equator, each under a vice governor gen- 
eral. These provinces have separate budgets and are in many re- 

^ Arts. 7 and 9 of the charter, Halot-Gevaert, Alexandre: La Charte Coloniale BeJge, 1910. This gives 
the text in the appendix, and comment on these articles on pp. 52-69, 75-80 See also Halewvclv, M.: La 
Charte Coloniale. 1910, pp. 216-248. 

'-■a HalewYck : Op. cit. pp. 291-298. 

«> Art. 27 olthe colonial charter; Halot-Gevaert, op. cit., pp. 211-213. 

a Arts. 24 and 25; Halot-Gevaert, op. cit., op. 186-208. 

« Katanga had included since Mar. 29, 1912, the districts of Lomami, Tanganyiiva-Moero the Upper 
Luapula, and the Lulua. 



BELGIUM. 119 

spects indepencL>nt of the governor general, but the customs, the post 
office, and the fidministration of justice continue in the hands of the 
governor general, and the Congo remains one rather than four sep- 
arate colonies. The four provinces are divided into 22 districts, each 
in charge of a commissioner, and the districts are subdivided into 
territories. The commissioners, with the aid of the territorial admin- 
istrators and agents, keep in touch with the 6,000 and more native 
chiefs whose authority has been recognized. The authority exercised 
by a chief is that established by the local native law or custom, but 
the chiefs are in the pay of the State, and may be controlled or even 
removed by its agents. ^^ 

III. Tariff Policy and System, 

CONTINUITY OF TREATY OBLIGATIONS. 

Belgium took over the Congo Free State subject to all the treaty 
obligations of that territory. These obligations, particularly the gen- 
eral act of the conference of Berlin, rather narrowly limit the possible 
tariff policies which the government of the colony may pursue. No 
differential duties or differential charges of any kind may be imposed 
on commerce or navigation; no transit duties may be levied, nor any 
import duties exceeding 10 per cent except upon alcohol, arms, and 
ammunition.®^ 

TARIFF POLICY. 

The policy pursued in the Belgian Congo has been to levy upon 
both imports and exports revenue duties without differentials. The 
rates of these duties are low, since 10 per cent is the general maximum 
on imports, and most of the export duties have been and are at lower 
rates. Plantation produce was exempt from export duty until 1917, 
and in 1913, v/hen the price of rubber fell, wild rubber was also ex- 
empted through the operation of a decree which fixed the export duty 
on a sliding scale according to current prices. As considerable deficits 
have been regular features of the budgets for the Belgian Congo,^^; 
the need has been felt for raising as much revenue from customs as is 
possible in view of the treaty restrictions on import duties and the 
natural restrictions on the levying of export duties. The free list is 
short compared with the lists found in many other African colonies. 

The Belgian Congo inherited from the Free State certain treaty 
limitations on trade in alcoholic beverages and arms, together with 
more severe restrictions, such as the total prohibition of the sale of 
absinthe and the prohibition of the sale of distilled liquors to the 

63 For the government of the Belgian Congo see Keith, A. B.: The Belgian Congo and the Berlin Act, 
Oxford, 1919, specially chapter 13, The Eeorganization of the Administration. 

" The establishment of the maximum rate at 10 per cent and the exception in regard to alcohol dates 
from the Bruvssels conference of 1890; the exception in regard to arms and ammunition from the agreement 
of June 15, 1910, which came into forceSO days after Dec. 31, 1911. ( Gt. Brit., Pari. Papers, Treaty Series, 
1912, No. 0. ) This was a general agreement of the powers which were parties to the treaties of Berlin, 1885, 
and Brussels, 1890, to permit a second exception to the 10 per cent limit on import duties in order to permit 
the same efforts to restrict the trade in arms by imposition of high duties as had previoasly been permitted 
in the case of the liquor trade. 

e-'' The deficit had been usually from two to four million dollars, or 10 to 20 per cent of the total expendi- 
ture, but in the budget for 1919 no deficit was anticipated. The budget for 1920 anticipates a total deficit 
in ordinary and extraordinary expenditure of 21,100,000 francs, or nearly one-fourth of the total expendi- 
ture. Customs duties are expected to produce a revenue of 13,000,000 francs. (L'Alrique Frangaise, 
Mar., 1920, p. 147.) 



120 COLONIAL TARIFF POLICIES. 

natives east of the Pozo River. ^^ During the four-year period follow- 
ing February 15, 1909, a special agreement subscribed to by Great 
Britain, France, Germany, Spain, Portugal, and Belgium prohibited 
the importation (except for transit) and the sale to natives of all 
arms within a territory small compared to that subject to the provi- 
sions of 1890, but large enough to include all of Kamerun and con- 
siderable parts of French Equatorial Africa and the Congo." 

REVISION OF TREATY OBLIGATIONS. 

As wa.s noted above, '''^ the general act of the conference of Berlin 
contained no provision for the termination of the obligations thereby 
assumed. Any treaty is, however, terminable by the unanimous 
action of the parties to it and it is not improbable that the general 
act of 1885 will be replaced by the convention signed at Saint-Germain- 
en-Laye on September 10, 1919. This convention was signed by 
representatives of the United States, the British Empire, France, 
Belgium, Italy, Japan, and Portugal, but up to September, 1921, 
France alone has ratified it. And before it can become valid, 
except as between the parties which ratify it and before it can 
terminate or supersede the obligations under the previous treaty, it 
must have the adherence of Spain, Holland, Russia, Denmark, 
Sweden, and Norway, which countries were parties to the previous 
act. Germany and Austria-Hungary, also parties to the previous 
act, have agreed in the treaties of peace to accept such revision of 
this and other acts as the allied powers or som^e of them may have 
made.^^ 

The new treaty draft differs in several important particulars from 
the general act of 1885. ^*' Instead of reading ^'the trade of all 

68 See pp. 86, 87. The Pozo (or Mpozo) }oins the Congo only a mile or two above Matadi. For the 
prohibition on the sale of distilled liquors to the natives, between the coast and the Pozo River in 
1912-13, see Keith, op. cit., p. 218. 

87 Gt. Brit., Pari. Papers, Treatv Series 1908, No. 29, Protocol of July 22. 1908. 

6s See pp. 87, 88. " 

es Peace treaty with Germany, art. 126: peace treaty with Austria, art. 373. The treaty with Turkey 
makes the same requirement. The Times (London), May 12, 1920. 

70 The text of the official British translation is as follows; 

Convention Revising the Genekal Act of Berlin. February 26, 1885, and tke General Act and 
Declaration of Brussels, Jult 2, 1890. 

Signed at Saint-Germain-en-Laye, Sept. 10, 1919. 

The United States of America, Belgium, and the British Empire, Prance, Italy, Japan and Portugal; 

"SMiereas the general act of the African conference, signed at Berlin on Februaiy 26, 1885, was primarily 
intended to demonstrate the agreement of the powers vdth regaid to the general principles which should 
guide their commercial and civilising action in the little known or inadequatelj- organised regions of a 
continent where slavery and the slave trade still flourished; and 

V\Tiereas by the Brussels declaration of July 2, 1880, it was found necessary to modify for a provisional 
period of fifteen years the system of free imports established for twenty years by article 4 of the said act, 
and since- that date no agreement has been entered into, notwithstan(iihg the provisions of the said act 
and declaration; and 

Whereas the territories in question are now imder the control of recognised authorities, are provided 
with administrative institutions suitable to the looal conditions, and the evolution of the native popula- 
tions continues to make progress; 

Wishing to ensure by arrangements suitable to modern requirements the application of the general prin 
ci;^es of civilisation established by the a<?ts of Berlin and Brussels, 

Have appointed as their plenipotentiaries: 

[Names omitted.] 

Mho, after having communicated their full powers recognised in good and due form, 

Have agreed as follows: 

APvT. 1. The signatory powers undertake to maintain between their respective nationals and those of 
States, members of the League of Nations, which m-ay adhere to the present convention a complete com- 
mercial equality in the territories under their authority within the area defined by article 1 of the general 
act of Berlin of February 26, 1885, set out in the annex hereto, but subject to the reservation specified in 
the final paragraph of that article. 

(Annex. Article 1 of the genei-al act of Berlin of February 26, 18S5. See p. 85.) 

Art. 2. Merchandise belonging to the nationals of the sighatorv powers, and to those of States, members 
of the League of Nations, which may adhere to the present convention, shall have free access to the interior 
of the regions specified in article 1. No differential treatment shall be imposed upon the said merchandisa 



BELGIUM. 121 

nations/' ''all flags without distinction of nationality," ''wares of 
whatever origin/' "foreigners without distinction/' the new draft 
confines its guarantees to nationals and to the merchandise and ships 
of nationals of "the signatory powers and of States, members of the 
League of Nations, which may adhere to the present convention." 
Even freedom of conscience is guaranteed only to the nationals of 
these powers. The new draft removes the Hmitation on the rate of 

on importation or exportation, the transit remaining free from all duties, taxes or dues, other than those 
collected for services rendered. 

Vessels fiying the flag of any of the said powers shall also have access to all the coast and to all maritime 
ports in the territories specified in article 1: they shall ]je subject to no differential treatment. 

Subject to these pro\isions, the States concerned reserve to themselves complete liberty of action as to 
the customs and navigation regulations and tariffs to be applied in their territories. 

Abt. 3. In the territories specified in article 1 and placed under the authority of one of the signatory 
powers, the nationals of those powers, or of States, members of the League of Nations, which may adhere 
to the present convention shall, subject only to the limitations necessary for the maintenance of public 
security and order, enjoy without distinction the same treatment and the same rights as the nationals of 
the power exercising authority in the territory, with regard to the protection of their persons and effects, 
with regard to the acquisition and transmission of their movable and real property, and with regard to 
the exercise of their professions. 

Art. 4. Each State reserves the right to dispose freely of its property and to grant concessions for the 
development of the natural resources of the territory, but no regulations on t/hese matters sliall admit of 
any differential treatment between the nationals of the signatory powers and of States, members of the 
' League of Nations, which may adhere to the present convention. 

Art. 5. Subject to the provisions of the present chapter, the navigation of the Niger, of its branches 
and outlets, and of all the rivers, and of their branches and outlets within the territories specified in 
article 1, as well as of the lakes situated within those territories, shall be entirely free for merchant vessels 
and for the transport of goods and passengers. 

Craft of tvery kind belonging to the nationals of the signatory powers and of States, members of the 
League of Nations, which may adhere to the present convention snail be treated in all respects on a footing 
of perfect equality. 

Art. 6. The navigation shall not be subject to any restriction or dues based on the mere fact of navi- 
gation. 

It shall not be exposed to any obligation in regard to landing, station, or depot, or for breaking bulk or 
for compulsory entry into nort. 

No maritime or river toll, based on the mere fact of navigation, shall be levied on vessels, nor shall any 
transit duty be levied on goods on board. Only such taxes or duties shall be collected as may be an equiva- 
lent for services rendered to na\'lgation itself. The tariff" of these taxes or duties shall not admit of any 
differential treatment. 

Abt. 7. The affluents of the rivers and lakes specified in article 5 shall in all respects be subject to the 
same rules as the rivers or lakes of which they are tributaries. 

The roads, railways or lateral canals which may be constructed with the special object of obviating the 
innavigability or correcting the imperfections of the water route on certain sections of the rivers and lakes 
specified in article 6, their affluents^ l:)ranches and outlets, shall be considered, in their quality of means of 
communication, as dependencies oi these rivers and lakes, and shall be equally open to the traffic of the 
nationals of the signatory powers and of the States, members of the League of Nations, which may adhere 
to the present convention. 

On these roads, railways and canals only such tolls shall be collected as are calculated on the cost of 
construction, maintenance and managemerit, and on the profits reasonably accruing to the undertaking. 
A s regards the tariff of these tolls, the nationals of the si.gnatory powers and of States, members of the League 
of Nations, which may adhere to the present convention, shall be treated on a footing of perfect equality. 

Art. 8. Each of the signatory powers shall remain free to establish the rules which it may consider 
expedient for the purpose of ensuring the safety and control of navigation, on the understanding that 
these rules shall facilitate, as far as possible, the circulation ol merchant vessels. 

Art. 9. In such sections of the rivers and of their affluents, as well as on such lakes, as are not necessarily 
utilised by more than one riverain State, the Governments exercising authority shall remain free to estalS- 
lish such systems as may be required for the maintenance of public safety and order, and for other necessi- 
ties of the" work of civilisation and colonisation; but the regulations shall not admit of any differential 
treatment between vessels or between nationals ol the signatory powers and of States, members of tlie 
League of Nations, which may adhere to the present convention. 

Art. 10. The signatory powers recognise the obligation to maintain in the regions subject to their juris- 
diction an authority and police forces sufhcient to ensure protection of persons and of property and, if 
necessary, freedom of trade and of transit. 

Art. 11. The signatory powers exercising soA^ereign rights or authority in A-friean territories will con- 
tinue to watch over the preservation of the native populations and to supervise the improvement ol the 
conditions of their moral and material well-being. They will, in particular, endeavour to secure the com- 
plete suppression of slavery in all its forms and of the slave trade by land and sea. 

They will protect and favour, without distinction of nationality or of religion, the religious, scientific or 
charitable institutions and undertakings created and organised by the nationals of the other signatory 
powers and of States, members of the League of Nations, v/hich may adhere to the present convention, 
which aim at leading the natives in the path of progress and civilisation. Scientific missions, their prop- 
erty and their collections, shall likewise be the objects of special solicitude. 

Freedom of conscience and the free exercise of all forms of religion are expressly guaranteed to all nationals 
of the signatory powers and to those under the jurisdiction of States, members of the League of Nations, 
which may become parties to the present convention. Similarly, missionaries shall have the right to 
enter into, and to travel and reside in, Afiican territory with a view to prosecuting their calling. 

The application of the provisions of the two preceding paragraphs shall be subject only to such restric- 
tions as may be necessary for the maintenance of public security and order, or as may result from tlie 
enforcement of the constitutional law of any of the powers exercising authority in African territories. 

Art. 12. The signatory powers agree that if any dispute whatever should arise between them relating 
to the application of the present convention which cannot be settled by negotiation, this dispute shall 
be submitted to an arbitral tribunal in coufonnlty with the provisions of the covenant of the Leagxis of 
Nations. 



122 COLOXI.IL TAEIFF POLICIES. 

import duty - and leaves the powers wliich possess territorv in the 
ConTentional Basin of the Congo free to lev}- import duties at their 
pleasure, prohibiting only the subjection to differential duties of 
merchandise belonging to nationals of the signatory and adhering 
powers. The new draft omits the prohibition on any '* exclusive 
privilege of navigation"' and it. specifically recognizes the right of 
each State to ** dispose freely of its property and to grant concessions 
for the development of the national resources of the territory"' — i. e., 
the right to pursue a policy which, formerly practiced, was largely 
responsible for the failure of the general act to maintain in practice 
the open door in the Congo Free State. T\ith these exceptions and 
other changes in detail, the treaty signed on September 10, 1919, 
preserves the provisions of the treaty of 1885 for the free entry of 
m.erchandise, the exemption from transit and certain other dues,' the 
freedom of navigation on the Congo and the Xiger River-s, and the 
prohibition of differential treatm.ent in matters of trade, property, 
and professions. -; 

A new convention relating to the liquor traffic in Africa was also 
signed on September 10, 1919, by the same powers which signed 
the convention revising the act of Berlui.'- This convention is 
designed to take the place of the last of the Brussels treaties. '^ The 
convention applies to Africa with the exception of the Union of South 
Africa and the northern tier of territories from Morocco to Egypt, 
inclusive.'' The convention increases the minimum import duty 
leviable on distilled liquors from 200 to 800 francs per hectoliter of 
pure alcohol (from Si. 461 to So. 844 per gallon) except that a rate of 
not less than 600 francs is permitted in the Italian colonies. Further, 
the importation, distribution, sale, and possession of "trade spirits 
of every kind'"'-^ and of absinthe and some other liq uoi^ is prohibited. 
The manufacture of distilled beverages of every kind and the im- 
portation of stills are prohibited except in the Italian colonies in 
which an excise duty is to be imposed at the same rate as that of 

Akt. 13. Except in so far as the stipulations contained in article 1 of the present convention are concerned, 
the general act of Berlin of 26th Pebruary, ISSo, and the general act of Brussels of 2nd July, 1S90. with the 
ficcompanying declaration of equal date, shall be considered as abrogated, La so far as they are binding 
between the p-owers which are parties to the present convention. 

Akt. 14. States esereising authority over African t^mtories. and other States, members of the League of 
Nations, which were parties either to the act of Berlin or to the act of Brussels or the declaration annexed 
thereto, may adhere to the present convention. The signatory powers '.^'ill use their best endeavours to 
obtain the adhesion of these States. 

This adhesion shall be notified throuehthe diplomatic channelto the Government ofthe French Republic, 
and by it to all the signatory or adhering States. The adhesion will come into force from the date of it-s 
iiotifi(ktion to the French Gbvernnient. 

Aet. 15. The signatory powers will reassemble at the expiration of ten years from the coming into force 
of the present convention, in order to introdace into it such modifications as experience may have shown 
to be necessary. 

The present" convention shall be ratified as soon as possible. 

Each power ^ill addre^ its ratification to the French Government, which will inform all the other 
signatory powers. 

The ratifications will remain deposited in the archives ofthe French Goremment. 

Tee present convention will come into force for each signatory power from the date of the deposit of its 
ratification, and from that moment that power vrill b-e bound in fesp-ect of other powere which tiave already 
deposited their ratifications. 

On the coming into force of the present convention, the French Government will transmit a certified 
copy to the powers which, under the trearies of peace, have undertaken to accept and observe it. The 
names of these powers will be notified to the States which adhere. (Gt. Brit., Pari. Papers, Cd. 477, 
Treaty Series 1919, Xo. IS.) 

''• A maximum of 10 per cent ad valorem, with certain exceptions. 

"2 Gt. Brit., Farl. Papers, Cd. 47S. Treatv Series 1919. Xo.'l9. 

's The treaty of 19C^. To September, 192i, France alone had ratified this treaty. 

'< The limits to which the treaties of Brussels applied were 20° ^. and 22' S. The change made in the 
new convention extends the area of applic-ation to the southern parts of Southwest Africa and of Portu- 
guese East Africa, and to the northern parts of French West Africa and of the Sudan, and, if Spain becomes 
B party, to the Rio de Oro. 

'^ Trade spirits are those not usually consumed by Europeans, The convention leaves the exact defini- 
lion of the term to the various powers for application- in their own territory. See p. 313- 



BELGIUM. 123 

the import duty. It will be observed that everything which is in- 
troduced in this convention is in the direction of the further limita- 
tion of the liquor traffic in tropical Africa. 

A new convention for the regulation of the arms traffic was also 
signed on September 10, 1919. In addition to the powers which 
signed the above-mentioned conventions of the same date, this 
treaty draft was signed by representatives of China, Siam, liedjaz, 
and by five States of eastern or southeastern Europe and eight States 
of Latin America. '^^^ This convention greatly increases the scope of 
the restrictions established in 1890. In regard to war arms — artillery, 
grenades, flame throwers, machine guns, etc. — and ammunition for 
them, the signatory powers agree to prohibit their exportation 
altogether except for the governmental needs of themselves or of 
other signatories. In regard to firearms and munitions other than 
war arms (e. g. trade guns) the powers agree to prohibit their ex- 
portation except to destinations and for uses not inconsistent with 
this convention. The importation of all arms and munitions except 
under surveillance as later defined is prohibited in the territories 
belonging to or under the guardianship of signatory powers not only 
in the whole of Africa (except Algeria, Libia, and the Union of South 
Africa) and in Sao Thome, Principe, Annobon, Sokotra, and the 
islands within 100 nautical miles of the coast of Africa, but also in 
western Asia — Transcaucasia, Persia, Arabia, and what was Asiatic 
Turkey — and in a maritime zone w^hich includes the Ked Sea, the 
Persian Gulf, the Gulf of Aden, and the waters west and north of a 
line drawn from Cape Guardaf ui eastward around Sokotra and north- 
Vv^ard to the eastern boundary of Persia. Transportation of arms 
within the maritime zone is forbidden and special authority to en- 
force this provision is given to the warships of the signatory powers. 
The importation and sale of arms is restricted by requirements for 
entry at certain ports, for storing in public warehouses and for removal 
therefrom only for transference to other warehouses or for the use 
by licensed individuals of marked and registered weapons, or ^^to 
be destined for places designated by the supreme authorities as 
places where the inhabitants may hold arms under the supervision 
and on the responsibility of the local authorities for the purposes of 
defense against plunderers or rebels." In the territories in which 
the importation of arms is prohibited no arms are to be manufac- 
tured except in public arsenals and none are to be repaired except in 
arsenals or licensed establishments. It will be seen that the pur- 
pose of this convention is much wider than that of the act of 1890, 
that it applies to a much larger territory and that its provisions are 
much more stringent. 

IV. Takiff Rates. 

When Belgium annexed the Congo, the tariff rates in force were 
those of the treaty of 1892 with France and Portugal.^^ This treaty 
was denounced by France with effect from July 2, 1911. In the 
Belgian Congo this denunciation caused no immediate change in 
rates of import duty and but little change has been made since. 
From January 1, 1914, the duties on coal and mineral oils were 

75a This treaty has been ratified by China, Siam, Greece, Brazil, Chile, Peru, Venezuela, Guatemala, 
and Haiti. 
76 See p. 89. 

185766°— 22 9 



124 COLONIAL TAEIFF POLICIES, 

reduced and were made specific.'^^ Gn March 2, 1914, a long list of 
specific rates, on the basis of the ad valorem rate of 10 per cent, 
was proclaimed to go into force the following October, but after the 
outbreak of the war the operation of this schedule was mdefinitelT 
suspended.'^ On May 10, 1919, the rate on distilled liquors was 
raised to 500 francs per hectoliter of alcohol at 50° centesimal,'^ 
and by ordinance of August 9, 1920, this rate was doubled. Fer- 
mentecl beverages of more than 15° of alcoholic strength pay at 
the same rate in proportion to their alcoholic content; those of 15° 
or less pay the usual 10 per cent ad valorem. 

The export duties in force in the Belgian Congo at the time of the 
denunciation of the treaty with France and Portugal have under- 
gone considerable changes. The price of Con^o rubber VN'hich for 
many years had been 6 to 10 francs per kilogram fell in the 
latter part of 1912 to 2.70 francs; in April, 1913, it was just half of 
that figm^e; and it continued to fall until it reached 68 to 77 centimes 
per kilogram.^*^ The Congo product could then be sold oidy at a loss, 
and a serious crisis was the result. The Congo railroads and the 
navigation lines to Belgium reduced their rates, and the Government 
reduced and then remitted the export duty. This remission took 
the form of establishing a new export duty on a sliding scale by which 
the orciinary tree or vine rubber should pay no duty until the price 
should rise beyond 5 francs per kilogram. In 19i4, in pursuance 
of a policy of encouraging the development of the Congo, the export 
duties oix palm oil, palm kernels, groundnuts, coffee, and sesame 
were abohshed.*^ The rates of duty on ivors" remained unchanged, 
but the regulations for the registration of i vor\' for export were much 
simplified. ^^ Copal alone was untouched by the changes in 1913-14. 

The present policy of the Belgian Congo in respect to export duties 
was established by a decree of December 17, 1917, and went into 
operation March 1, 1918. This decree made no change in the rates on 
ivorv^, but all other previous export duties were repealed and in their 
place a uniform rate of 3 per cent ad valorem — reduced to 2 per cent 
in 1920 — was imposed on all exports except reexports. This intro- 
duced for the first time an export duty on mineral products. The 
governor general is authorized to fix valuations. ^^ 

The war caused a postponement of the change in the basis of 
reckoning the import duties, but otherwise had no effect upon either 
import or export duties. Certain features of the trade were subject 
to special provisions more effective than tariff regulations. Thus, 
in February, 1915, the exportation of rubber to destinations other 
than Great Britain and France was prohibited; but this vras shortly 
modified to permit exportation to the account of the Belgian consul 
in New York City. 

^' Decree of Dee. 11. 1913. Bulletin International des Douafies ( International Customs Journal), No. 3, 
2d ed., 14tli Supplement. 

78 Decree of Aug. 17, 1914, reported bv the American consul. The list included 69 items of which nearly 
one-half were classifications of cotton goods. 

?9 Ordinance of Oct. U, 1918, to go into operation from the dav of its publication in the official bulletin 
This publication did not take place until May 10, 1919. The rate prescribed is 10 centimes per liter and per 
centesimal degree of alcoholic strength, but the equivalent per hectoliter is given above to facilitate com- 
parison. 

80 The rubber imported into the United States is of the best grades, and the figure given on p. 25 is not 
inconsistent with tliis. 

81 Decree of June 3, 1914; in force 60 davs after its appearance in the ofiicial bulletin on June 24. 

82 Daily and Consular Trade Reports, Dee. 7, 1914, p. 1050. B. O. June 3, 1913. 

*■'' On those articles for which no valuation has been assigned the duty is levied on the "value in the 
market of realization less cost of transport and insurance from the place' of export in the territory to the 
place of destination and less a fixed rate of 5 per cent of the estimated price of safe in respect of the expenses 
of realization." 



BELGIUM. 



125 



Miscellaneous regulations are not numerous in tlie Congo. The 
importation of saccharin, glycerin, and other sweetening substances 
other than sugar and glucose is prohibited.^* The importation of 
absinthe is prohibited and, as mentioned elsewhere, through most of 
the territory the importation of all distilled liquors is prohibited. 
The importation and sale of arms is subject to special regulations in 
accordance with the treaty of Brussels. In 1913 the exportation of 
cows from Katanga was prohibited. In the same year a statistical 
dut}^ of 15 centimes on each barrel, sack, or other package was levied 
both on imports and exports, with a few exemptions. 

The present tarifi system of the Belgian Congo may be summarized 
in a few sentences. With three exceptions imports pay a uniform 
rate of 10 per cent ad valorem. The value is the c. i/f. value at the 
place of importation, on the invoice value plus 20 per cent. The 
thr^e exceptions to the uniform rate of 10 per cent are a higher 
specific rate on distilled and on the stronger fermented liquors, a short 
list on which the duty is 3 per cent ad valorem, and a short free list. 
These exceptions are enumerated in the table below. On exports, 
with the exception of ivory, a uniform duty of 2 per cent is levied. 
On iA^ory the specific rate, which Griginally represented a duty of 10 
per cent ad valorem, has remained unchanged since 1892, except for 
the doubling of the rate for some m^onths in 1920-21. 

Tarijf of the Belgian Congo. 

IMPORT DUTIES. 



Article. 



Articles not enumerated 

Coal: 

Coal and briquettes 

Coal for metallurgical use . 

Coke 



.ad valorem. 



.100 kilograms. 

do... 

do... 



Mineral oils: 

Petroleum, schist, and other crude oils ^ - - -do 

Motor-car spirit (light oils) b do 

Liamp oils (refined petroleum) do.... 

Distilled liquors per liter and per degree of alcoholic streugth. . 

Fermented liquors above 15°. do 

Ships and boats ad vaiorein. . 

Steam engines and similar machinery do 

Tools for industry and agriculture do 

Scientific instruments 

Railway equipment and materials, during the construction of the line 

Articles for pul^lic worship 

Personal baggage of travelers and colonists 

Live animals 

Seeds for agricultural purposes - - - • 

Organic and chemical fertilizers 



"r. a 


10% 


12 


06 


15 


:35 


60 


2 00 


20 


20 


3% 


3% 


3% 


Free. 


Free. 


Free. 


Free. 


Free. 


Free. 


Free. 



EXPORT DUTIES. 



Ivory: 

Pieces ("pilons"), etc 100 kilograms 

Tusks v/eighing less than 6 kilograms <ic) . 

Tusks weighing more than 6 kilograms ^ do . 

All other products ad valoren 



100 00 

160 00 

210 00 

2% 



a All oils which can not be used for hghting purposes without being previously refined, so as to render 
them fit for use in ordmary lamps, are regarded as crude oils. 
b Including, particularly, benzine, gasoline, motocarline, and other e^ssences of the same km.;i. 
<= For quantities inferior to 100 kilograms the duties shall be collected in proportion to the above rates, 
d The exportation, trade, or detention of elephants' tusks weighing less than 2 kilograms is prohioited. 
M Ordinance of Sept. 15, 1911. 



126 COLOIS^IAL TAEIFF POLICIES. 

TREATMENT OF PRODUCTS OF THE CONGO IN BELGIUM. 

Belgium pursues a low-tariff policy, and all raw materials are ad- 
mitted free. No preference, therefore, could be granted to imports 
from the Belgian Congo without a reversal of policy and the imposi- 
tion of duties on raw materials from other sources. The trade is in 
the hands of the Belgians to such an extent that it is difficult for 
foreigners to purchase these raw materials in the Congo, and no legal 
restrictions have been necessary in order to send the trade to Bel- 
gium. The only instance of special control over the products of the 
Congo in time of peace is the reservation, beginning early in 1920, 
of a supply of gold for Belgian goldsmiths .^^ Since, however, this 
gold comes from mines which are the property of the State,*^ this 
reservation is not one which affects general trade. One other special 
arrangement for trade between Belgium and the Congo may be 
mentioned. By a law of October 8, 1919, exports from Antwerp to 
the Belgian Congo may receive their customs examination before 
departure instead of on their arrival in the mouth of the Congo. 

V. Restoration of the Open Door. 

After Belgium took over the administration of the Congo from 
King Leopold thorough reforms were undertaken. The State monop- 
oly of the vegetable products of the domain was abolished for differ- 
ent parts of the territory in 1910, 1911, and 1912. The Government 
reserved only its plantations and five forest areas oL 600,000 hectares 
each.^' The area under the control of the Abir and the Anversoise 
companies was reduced from 15,000,000 to 110,000 hectares. The 
Government withdrew its interests from these companies and others, 
and the commercial companies v>^ere deprived of all governmental 
powers. They are now required to pay for all services in currency. 
The salaries of officials have been increased and put on a basis such 
that their remuneration is in nowise dependent upon their success in 
promoting the fiscal interests of the State. Land may now be ac- 
quired easily by missionaries, traders, or natives. The tax system 
has been radically revised. Taxes are levied in cash only and the 
State no longer makes payment for services in goods. A new system 
for the taxation of ivory was introduced, though it was estimated 
that this would reduce the revenue from this source by one-half. 
Foodstuffs are no longer commandeered, though the natives remain 
liable for the upkeep of roads, bridges, and rest houses. The term of 
the Corvee for civil work was reduced to three years in 1910 and the 
institution had been abolished before the war necessitated its re- 
vival. ^^ 

The passing of the Leopoldian regime and the restoration of the 
open door under the Belgian administration had no striking and 
immediate effects upon the proportion of the trade of the Congo 
which was enjoyed respectively by Belgium and foreign countries. 
Such an immediate effect could not be expected for several reasons. 

8= Commerce Reports, Jan. 19, 1920. 

86 The Colomal Minister, M. Franck, has stated that the gold mines and other State activities would 
be transformed into commercial enterprises, the State retaining some interest and control. (B. T. J., 
Mar. 17, 1921.) 

87 A total of nearly 12,000 square miles. For the areas to be opened in each of the tliree years and for 
the reserved areas, see the map in the Statesman's Year-Book, 1910, facing p. CIV. 

88 On these reforms see Keith: Op. cit., pp. 152-158. 



BELGIUM. 127 

The reforms were introduced only gradual!}^ and for the most part in 
1910-1912. Up to the beginning of the war, therefore, there had been 
little time for results to develop. Belgian trade was firmly intrenched 
and it might naturally be expected that — aside from such cataclysms 
as those caused by the war — the growth of trade with foreign coun- 
tries would be dependent rather upon the development of new trade 
than upon the replacement of Belgian by foreign goods. Another 
reason for the continued predominance of Belgian trade is discoverable 
in the attitude of the officials of the Congo administration toward 
the ''open door." This attitude is described in the following quota- 
tions. The first is from a letter from a British vice consul to the vice 
governor general of Katanga: 

Were the laws administered generously and impartially as they should be in a new 
country, if prosperity is the aim, I think that traders of all nationalities would conform 
thereto, but they resent being regarded as outcasts because they are foreigners, and 
that this is the case I have been told over and over again both here and in the interior. 
It Vv-as a Belgian trader who informed me that a favorite theme of the officials in the 
interior was "Katanga for the Belgians, and let the English and Germans go to their 
own colonies," while a German whose agents have traveled widely in the district 
remarked, in complaining of the feeling of insecurity which he and his employees 
shared, that the Katanga is full of young and inexperienced officials, who have no idea 
of free trade for all nationalities alike, and who consider it to be their duty to assist 
their compatriots to the detriment of foreigners. ^^ 

A missionary of long experience and much travel in Africa has said 
that theoretically the Belgians are anxious to persuade foreign capital 
to enter the Congo, but *'in practice the presence of any commercial 
agents, particular!}^ those of any other nationality, is gall and worm- 
wood to the local Belgians. Nothing, for instance, irritates them so 
much as to be reminded that by the Berlin act the}^- are bound to 
keep the country open to the free commerce of the world." ^'^ 

The British Government ultimately came to the conclusion that 
the administration had made and was making a determined and 
successful effort to carry out the reforms which had been recom- 
mended by the United States and Great Britain in 1908, and on 
June 27, 1913, it formally recognized the annexation of the Congo by 
Belgium. The Congo Reform Association had dissolved a few days 
earlier. ^^ 

War swept away Belgian commerce, and it remains to be seen to 
what extent the trade of Belgium will resume its old channels and 
recover its old predominance in the Congo. Even before the war, 
certain factors in the development of the Congo — whose presence 
must be attributed to the reforms introduced by the Belgian Govern- 
ment — were tending to divert trade from Belgium. One of these 
factors was that the gigantic English firm of Lever Bros ®^ had estab- 
lished numerous factories in the Congo, vfhere their activities fur- 
nished employment to thousands of natives. A considerable incr-ease 
in the exports of palm kernels and palm oil to Great Britain has been 
the result. Another factor is the development of the Katanga. 
Because South Africans have played so active a part in this develop- 
ment and because the imports and exports of the region must ^^ use 

S9 Quoted in Keith, A. B.: The Belgian Congo and the Berlin Act, p. 157. 

90 Harris, J. H. : Dawn in Darkest Africa, p. 92. Since 1913 there has been a large increase in the num- 
ber of foreign retailers in the Congo. L' Afrique Francaise, May, 1921, p. 165. 

91 Harris, N. P.: Intervention and Colonization in Africa, p. 62. 

92 Soap manufacturers, recently capitalized at £100,000,000. 

93 Until the railway to Lobito Bay in Portusruese Angola is completed. This railway will shorten the 
route by iTpward of a thousand miles. Imports may also reach the Katanga by way of the Congo River, 
but the numerous transshipments required in this route prevent competition with the South African 
railway system. 



128 COLONIAL TABIFF POLICIES. 

the South xiirican railway S3^steni, South Africa had obtained even 
before the war a growing share in the trade of the Congo. 

Bibliography. 

[See aim page 835.] 

Blanchard, Georges. Formation et Oonstitution Politique de I'Etat Independant du 

Congo. Paris, 1899. 
Bornhaupt, G. von'. Die Kongo-Akte und der FreihandeL Abteilung Berlin- 

Charlottenburg der Deutschen Kolonial-Oesellschaft. Verhandlungen 1901-02, 

Band VI, Heft 4, 1902. 
Boulger, Demetrius C. The Congo State, or the Growth of Civilisation in Central 

Africa. London, 1898. 
Bourne, Henry R. Fox. Ci\ilisation in Congoland. London, 1903. 
Castelein, A., S. J. The Congo State. Its Origin, Rights, and Duties. The Charges 

of its Accusers. London, 1907. 
Cattier, Felicien. Droit et Administration de I'Etat Independant du Congo. Brus- 
sels and Paris, 1898. 
Cattier, Felicien. Etude sur la Situation de 1 "Etat Independant du Congo. Brussels 

and Paris, 1906. 
Chapman, A. B. W. The Commercial Relations of England and Portugal, 1487- 

1807. Royal Historical Society Transactions, 3d series, Vol. I, London, 1907. 
Descamps, E. E. F. New Africa. (Tr. ) London, 1903. 
Halewyck, Michel. La Charte Colordale. Commentaire de la Loi du 18 Octobre 1908 

sur le Gouvernement du Congo Beige. Brussels, 1910. 
Halot-Gevaert, Alex. La Charte Coloniale Beige. Commentaire de la Loi de 

Gouvernement du Congo Beige. Brussels, 1910. 
Harris, J. H. Dawn in Darkest Africa. London, 1912. 
Harris, N. D. Intervention and Colonization in Africa. Boston, 1914. 
Keith, A. B. The Belgian Congo and the Berlin Act, Oxford, 1919. 
Keltie, J. Scott. The Partition of Africa. 2d ed., London, 1895. 
Lannoy, C. de, and Linden, H. vander. Histoire de lexpansion des peuples euro- 

peens. Vol. I, Portugal et Espagne. Brussels, 1907. 
MacDonnell, J. de C. King Leopold II, His Rule in Belgium and the Congo. Lon- 
don, 1905. 
Morel, Edmund D. King Leopold's Rule in Africa. London. 1904. 
Sociedade de Geographia de Lisboa, Commissao nacional africana. La question du 

Zaire. Droits" du Portugal. Lisbon, 1883. 
Stanley, Sir- H. M. The Congo and the Founding' of its Free State. New York, 1885. 
StaiT, Frederick. The Truth about the Congo. Chicago, 1907. 
Vandervelde, Emile. La Belgique et le Congo. Le Passe, le Present, I'Avenir. 

Paris, 1911. 
Vermeersch, Arthur, S. J. La Question Congolaise. Brussels, 1906. 
Wack, Henry W. The Story of the Congo Free State. New York, 1905. 
Wauters, Adolph-Jules. L'Etat Independant du Congo. Brussels, 1899. 
Wauters, Adolph-Jules, editor. Le Mouvement Geographique, Brussels, weekly 

from Apr. 6, 1884. 

OFFICIAL WORKS, 

Commission of Inquuy appointed by the Congo Free State Government. Report on 
the Congo. Putnam's, 1906. 

Etat Independant du Congo. Bulletin Officiel, monthlv 1885-1908. Continued by 
the Bulletin Officiel du Congo Beige, 1908. 

Great Britain, Parliamentary Papers. C. 3531, 1883; C. 4023, 1884; Cd. 1933, 1904; 
Cd. 2097, 1904;_Cd. 3450, 1907; Cd. 3880, 1908; Cd. 4079, 1908. 

Louwers, OctaA^e. Lois en vigueur dans 1 'Etat Independant du Congo. Brussels, 1905. 

Institut Colonial International. Regime Foncier aux Colonies. The Congo, Vol. II, 
pp. 7-121. (Collection of texts of laws, etc.) 

Royaume de Belgique, Ministere des Colonies. Renseignements de I'Office Colonial. 
Annales Parlementaires de la Chambre des Representants, Sess. Ord. de 1890- 
91, 1892. 

59th Cong., 2d sess. U. S. Senate Document No. 139, Verbatim Report of the Five 
Days Congo Debate in the Belgian House of Representatives, Feb. 20, 27, 28, 
Mar. 1, 2, 1906. (Taken fi-om Morel's Iving Leopold's Rule in Africa, includ- 
ing Morel's comments.) 

TEXTS OF TREATIES. 

See the list given on page 834. 



Chapter III. 
COLONIAL TARIFF POLICY OF FEANGE, 



CONTENTS. 



I. Introduction: 

The French Colonial Empire- 
History 130 

Present extent 132 

Area and population- 
Table 1 133 

Situation and commercial importance 134 
Table 2.— Trade of the French 
colonies, 1913 139 

II. Government of the colonies and the . 

making of tariffs: 

Government 139 

The making of colonial tarifls. ....... 140 

III. Colonial tariiE policy and system: 

Earlier policy 142 

The tariS law of 1892— policy. 143 

Treaty limitations— 

The open door in Central and West 

Africa , 144 

Limitation of the trade in alcohol 

and arms 145 

The customs duties of Timis, Mo- 
rocco, Somaliland, and the New- 
Hebrides . 145 

The minimum tariflE in the assimi- 
lated colonies 148 

Colonial tariff system— 

Under the lav/ of 1892.. 147 

Classification o f the colonies— 
(a) Assimilated colonies 

(tarifi characteristics j- . . 147 
(6) Nonassimilated colonies 
with special regimes 
(tariff characteristics) ... 148 
(c) Nonassimilated colonies 
with " open door " 
(tariS characteristics). . 148 
Treatment of intercolonial trade . 148 
Levying of additional charges on 

imports 148 

Export duties 150 

Minimum rates and direct trans- 
portation 150 

Modifications of the s ystem since 1 892— 

Changes in classification 151 

Changes in procedure of tariff 

making. 151 

Changes in treatment of interco- 

1 onial trade 153 

Changes in rates and preferences. 153 

Changes since 1914 154 

Present system (summary) 156 

Diagram summarizing the French 

colonial tariff system 157 

The differential featm-es— 

Preferences in the colonies ... 159 

Preferences in France .... 159 

Preferences to French ship- 
ping. . ........ 159 

Table 3.— Shipping in 
colonial trade, 1913. ... 181 

IV. Tariffs of the colonies, in groups and 

individually: 
The assimilated colonies and territories . . 152 



Page, 
IV. Colonies proper: Indo-China, Madagas- 
car, Martinique, Reunion, Guadeloupe, 

New Caledonia, Guiana, Gaboon 1G2 

Commercial importance , 1G2 

Table 4. — Trade aud population 

of colonies bv groups 153 

Tariff history- 
Inauguration of differential 

tariffs in the colonies — 163 

Assimilation of tariff's under the 

law of 1892. , 164 

Features of the system 184 

-The differential features— sum- 
mary , . 168 

Tariff schedules in the different col- 
onies- 
Customs duties 109 

Consumption duties 1G9 

Table 5.— E xceptions to the 
French tariff in the assimilated . 

colonies 171 

Table 6.— Octrois and consiunp- 
tion duties of the assimilated 

colonies 176 

Algeria- 
Commercial importance 179 

Features of the Algerian tariff" system. 179 
Differential features— Summary . 183 
3?he protectorate of Tunis — 

Commercialimportance 184 

Tariff history— Estabhshing of differ- 
ential taria 184 

Features of the tarifi system of Timis. 185 
Treatment in France bf imports from 

Tunis 188 

Table 7.— Quantities of Tunisian 
products authorized to enter 

France free 190 

The difierential features — Sum- 
mary 191 

The nonassimilated colonies — 

Classification 191 

General tariff policy— 

The law 192 

General features 192 

The tariff systems of the nonassimi- 
lated colonies summarized. 194 

Table «.— Tariff concessions for 

products entering France — . . . 195 
The differential features— Sum- 
mary 196 

Tariffs of the nonassimilated colonies, 
individuailly— 

Special regime colonies 197 

French West Africa (Senegal and 
Guinea) — 

Commercial importance 197 

Tariffs in West Africa— T\vo 
types— 

Thefreelist.. 197 

Diff'erentiai duties 198 

Table 9.— Examples of import duties. 199 

nixport duties 200 

Exports to France— (Special 
treatment) ... 200 

129 



130 



COLONIAL TAEIFF POLICIES. 



IV. The nonassimilated colonies— Contd. Page. 
Oceania- 
Commercial importance 200 

Tariffs- 
Differential duties 200 

The Octroi de mer 201 

Export duties 201 

Preference on vanilla ex- 
ported to France 202 

St. Pierre and Miquelon — 

Commercial importance 202 

Special tariff a substitute for 

"assimilation 202 

Thefreelist 203 

Rates lower than in France . . 203 

Consumption duties 203 

Changes in rates 203 

Open-door colonies- 
Morocco — 

Commercial importance 204 

Tariff history— Treaties 204 

Treaty of Versailles and 

policy of France 206 

The maritime customs tariff- 
Import duties 208 

Discrimination against Ger- 
man goods 208 

Thefreelist 208 

Export duties 208 

Prohibitions, restrictions, and 

monopolies 209 

Consuniption duties 209 

Special tariffs of the land fron- 
tiers 210 

Table 10— Examples of Moroccan 

export duties 211 

Scmaliiand— 

Commercialimportance 214 



IV. The nonassimilated colonies— Contd. Page. 
Somaliland— Continued. 
Tariff- 
No import or transit duties 214 

Consumption duties 215 

Export duties 215 

Dahomey and the Ivory Coast — 

Commercial importance 216 

Tariff- 
Treaty provisions of 1898 216 

Import duties 216 

Export duties 217 

. Exports to France 218 

French India — 

Commercial importance 218 

Tariff- 
Duties on spirits only 218 

Exports to France and to 

other colonies 219 

Equatorial Africa- 
Commercial importance 219 

Tariff- 
Treaty pro^-isions— 

Conierence of Berlin 219 

The open door... 220 

Brussels conference 220 

Arrangement with Portu- 
gal and the Congo State. 221 

The tariff of 1912 .-.. 221 

Export duties 221 

Exports to France 221 

New Hebrides- 
Commercial importance 222 

Tariff — 

Duties established by Franco- 
British treaty 222 

Exports to France 222 

Bibliography 223 



I. Introduction. 



THE FRENCH COLONIAL EMPIRE. 



HISTORY. 



France holds to-day a position among colonial powers second only 
to that of Great Britain. She is the one modern power that has gained 
and lost and gained anew a vast overseas empire. The French 
did not seriously enter the colonial field until toward the end of the 
sixteenth century. In 1504 Breton ships fished off the coasts of 
Newfoundland, 20 years later Verazzano mapped the coast of North 
Am_erica and sailed on the Indian Ocean, and in 1534 Cartier took 
possession of the region adjacent to the St. Lawrence River and 
Ribaut explored the coast of Florida. But France was busy with 
wars at home. Ultimately, however, the purposeful efforts of the 
French explorers, missionaries, and trading companies outdid, in 
the acquisition of valuable and extensive colonial connections, the 
more brilliant pioneering of the Portuguese and the Spanish^ and the 
French successfully rivaled the Dutch and the British as colonial 
empire builders The Marquis de la Eouche was given in 1598 a 
commission to conquer Canada. Champlain founded Quebec and 
French missionaries and traders penetrated to the Great Lakes and 
down the Mississippi. Frenchmen settled in Louisiana in 1699 and 
founded New Orleans in 1715. Villegaignon established a French 
colony at- Rio de Janeiro. The French company of the Moluccas 
competed successfully in the trade of the East Indies and its ships 
touched at Madagascar and the Comoro Islands. French companies 
were organized for trade with the Orient, with Senegal, with Cape 
Verde, and with the islands of America, and for colonizing St. Christo- 
pher's Island and other islands in the West Indies. Settlements were 



FEANCE. 131 

established on Martinique, Antigua, St. Martins, St. Bartholomew, 
and the Bahama Islands, and in Guiana. During the seventeenth 
century Colbert's French East India Co. established the colony of 
Pondicherry on the Coromandel coast (India) and sent an expedition 
to Ceylon. French expeditions made settlements in Bourbon 
Island (Keunion) and in Mauritius (Isle of France). Senegal and 
Goree, in Africa, were made French possessions, their chief attraction 
being the slave trade. Later Louis XIV sponsored an adventure 
directed toward monopolizing the trade of Siam. 

These activities brought France into collision with Holland, Spain, 
and England. The Dutch almost exterminated the French colonies 
in the Far East. After the restoration of Pondicherry, in 1693, the 
French fortified that point and made it the political and commercial 
capital of an empire in the East. Their expansion in India, together 
with that of North America, made them the most formidable rivals 
of the British. The test of strength between the two powers came in 
the Seven Years War (1756-1763), which was fought in the colonies 
as well as in Europe and which settled the fate of both India ^ and 
Canada. From the beginning to the end of the eighteenth century 
France lost colony after colony. The Napoleonic Wars completed 
the destruction. ^'The Congress of Vienna left to France only St. 
Pierre and Miquelon, Guadeloupe, Martinique, and a part of the 
Guiana coast in America; Reunion Island off the coast of Africa; 
and small enclaves in India." ^ Upon the restoration of Louis XVIII 
the colonies which had been in French possession just before the 
revolution were returned, with the exception of Tobago, St. Lucia, 
and Mauritius. 

Just before the '^ July revolution^' of 1830, Charles X sent a puni- 
tive expedition to Algeria and occupied part of the coast. The new 
king, Louis Philippe, did not withdraw this army, but it was not until 
1857 that the conquest of what is now northern Algeria was com- 
pleted.^ Between 1841 and 1843 certain other regions in Africa 
v/ere occupied. In 1860, Moorish tribes in Senegal were pacified, and 
thereafter French interests in that region expa^nded. Napoleon III 
had visions of possible colonization in the Western Hemisphere, but 
without successful achievement. 

Much the greater part of the second French colonial empire has 
been acquired under the Third Republic within the past 40 years. 
In Africa, France has accumulated a.n unbroken territorial block 
embracing three and one-half million square miles. Most of this 
domain has been brought under French rule since 1880. In Asia, 
since 1880, France has acquired most of the 310,000 square miles of 
the governor-generalship of Indo-China. 

In 1881 the French entered Tunis and placed that country under 
French protection. As time passed their influence in Tunis was 
strengthened, while their control in Algeria was being perfected. 
Meanwhile — though not closely connected with events in the Mediter- 
ranean ^ — the partition of tropical Africa had been proceeding. The 
European occupation of central Africa really dates from Stanley's 

1 Pondicherry was restored to the French in 1763; it has since been taken three times by the British and 
three times restored, and it remains to-day the chief French community in India. 

2 Gibbous: The New Map of Asia, p. 95. rr, j., 

3 Leroy-Beaulieu, Paul: De la Colonisation chez les Peuples Modernes, vol. 1, p. 371. The author 
mentions the chief advances in the occupation of Algeria, the events named falling into 13 diflerent years. 

* See Woolf, Leonard: Empire and Commerce in Africa, 1920, pp. 68, 93 fl. 



132 COLONIAL TASIFF POLICIES. 

descent of the Congo and his return to Europe in the following year 
(1878). In 1880 de Brazza, who had earlier been engaged in explora- 
tions in those regions, undertook to establish a French protectorate 
over a large area on the north bank of the Congo. By 1884 the French 
were penetrating into the interior of all West Africa from the Senegal 
to the Congo and were establishing their position by means of treaties 
with native chiefs. 

By -agreement with Great Britain in 1890 and with Germany in 
1894, the French obtained a free hand in the Central Sudan, and thus 
established a continuous sphere of influence between their posses- 
sions in North and West Africa and those in the Congo region. 
Boundaries in Africa had been for the most part agreed upon by 
1900, a,nd the French had established themselves in the remoter 
hinterland behind the States of Morocco and Liberia and behind all 
the West African colonies of Great Britain, Germany, Portugal, and 
Spain from the Congo to Algeria and Tunis. The final adjustment 
of the last part of the undefined boundary of the French Sudan was 
made in an agreement with Great Britain in the autumn of 1919. 
In a post-war settlement of colonial boundaries in accord with the 
treaty of London (1915), France has ceded to Italy certain Saharan 
territory to round out the boundaries of Libia. 

The French position in Algeria led to boundar}^ conflicts with 
Morocco and these conflicts led to disputes with other European 
powers. Through agreements with Great Britain, Germany, and 
Spain, these disputes were compounded and in 1912 France was 
recognized as the paramomit power over most of Morocco. German 
recognition of the new French position in Morocco was obtained in 
return for the cession of 107,000 square miles of Equatorial Africa, 
a cession which broke the continuity of the French possessions. This 
territory was regained in the late war.^ 

As early as 1862 France had acquired by treaty Ob ok, on the Gulf 
of Aden, but this point was not formally occupied until 1883. Trea- 
ties with Somali sultans resulted in the extension of the boundaries 
of this territory (French Somaliland), and in 1897 the boundary to- 
ward Abyssinia was fixed by treaty with King Menelik. 

With an interest which began much earlier, the French conquest of 
Cochin-China dates from 1861. In 1867 Cambodia was made a 
protectorate, and in 1884 Annam was brought into the same posi- 
tion. The conquest of Tonkin was completed in 1886, The gover- 
nor-generalship of Indo-China was formed in 1887. Six years later 
there was added the Laos protectorate, ceded by Siam; and in 1907, 
Battambang, also ceded by Siam. 

PRESENT EXTENT. 

The French Colonial Empire of to-day has a total area of over 
4,000,000 square miles. Of this territory 3,735,000 square miles, an 
area greater than that of the United States and all its possessions, is 
in Africa; 310,000 square miles are in Asia; 35,000 square miles are 
in America; and 8,700 square miles are in Oceania. This empire 

5 The territory ceded by France was added to German Kamerun under the name of New Kameruia. 
The territories constituting old Kamerun and Togo are now held under mandate of the League of Nations, 
the greater part of each being held by France and the smaller part by Great Britain. The division is so 
made that the territories under mandate are contiguous to colonies of those powers. 



fra:n"ce. 



133 



includes peoples of tlie greatest diversity widely distributed over the 
earth's surface. Algeria in northern Africa is as far from Madagascar 
in the Indian Ocean as it is from French Guiana in South America 
or from St. Pierre off the coast of Newfoundland; while Madagascar 
is as distant from Algeria as it is from Indo-China. 

The French possessions and protectorates in Africa include Tunis 
and Algeria on the Mediterranean, and Moracco bordering on the 
North Atlantic; Sahara to the south of these; West Africa, including 
Senegal, Upper Senegal and Niger, Mauritania, French Guinea, the 
Ivory Coast, and Dahomey on the Atlantic coast in the northern half 
of the torrid zone; French Equatorial Africa, touching on the Gulf of 
Guinea and extending a thousand miles inland to the northeast, partly 
north and partly south of the Equator; Madagascar and certain smaller 
islands east of Africa in the Indian Ocean; and a fragment of the 
Somali coast on the Gulf of Aden. In Asia, France has five areas 
in India, aggregating less than 200 square miles and organized as a 
single ^'colony," and a considerable region in Indo-China bordering 
on the China Sea. In Oceania, the French possess the sizable island 
of New Caledonia together with a number of other islands of less 
importance. In America, the French possessions embrace French 
Guiana, north of Brazil; Guadeloupe and Martinique in the West 
Indies; and St. Pierre and Miquelon, off the south coast of New- 
foundland. 

These vast areas are not, it is true, as densely populated as is the 
motherland with her 189 inhabitants to the square miie^ or the 
United States w^ith its 31 persons to the square mile; but with their 
average of 13.7 persons to the square mile they have a total popula- 
tion of over 56,000,000, which is more by 41 per cent than the popu- 
lation of France. In Africa, where the greater part of the French 
colonial population is located, the average is estimated at 10.3 per- 
sons to the square mile, while in the French possessions in Asia the 
density is about 55.5 to the square mile. 

AREA AND POPULATION. 



Table 1 gives the area and population of the various French 
colonies. Approximately 91 per cent of the area and 68 per cent 
of the population are in Africa. 



Table 1. — Area 



and populo.tioti of French 2)ossessions and -protectorates. 



Colony or protectorate. 



AFBICA. 

Algeria (northern and southern territories) 

Tunis (protectorate) 

Morocco (protectorate) 

Sahara 

West Africa: 

Senegal 

Upper Senegal and Niger^ 

Mauritania 

French Guinea 

Ivory Coast 

Dahomey 

1 Annuaire Statistique de la France, 1914-15 

2 Statesman's 1 ear-Book, 1919. 



Area.i 




Square 

miles. 
222, 119 
48,313 
193, 050 
924, 401 

73,992 
836, 477 
345, 056 

92,273 
125, 571 

37, 537 



Popula- 
tion per 

square 
mile. 



5,564,000 

1,953,000 

5,400,000 

800,000 

1,247,000 
5,598,000 

600,000 
1,812,000 
1, 417, 000 

•211,000 



s See note on p. 197. 



134 COLOXIAL.TAEIFF POLICES. 

Taele 1. — Are-i and population of French possessions and protectorates — Continued. 



Colony or protectorate. 




Popula- 
tion. 



Popula- 
tion pet 
square 
iniie. 



AFEiCA— continued. 



Equatorial Africa ^ 

Madagascar and dependencies .- 

Reunion and lies du sua (Kerguelen, St. Paul, Amsterdam). 
Somali coast 



Square 
miles. 
561,346 
226,911 
2.284 
M6',332 



9,000,000 

3,610,000 

174,000 

203,000 



Total. Africa ■ 



Possess! ouy in India. 
Indo-Cliina 



Total, Asia. 



New Caledoma, adjacent islands and dependencies. 
French Establishments in Oceania 



Total, Oceania. 



St. Pierre and ^Miouelcn. 

Guadeloupe and dependencies. 

Martinique 

Guiana. 



Total America. 



3,735,662 


33,294,000 


10 


198 
310,060 


268,000 
16,990,000 


1.354 
55 


310,258 


17,258,000 


56 


7,202 
1,544 


51,000 
31,000 


7 
20 


8,746 


82,000 


9 


93 

688 

381 

34,069 


5,000 

212,000 

193,000 

49,000 


54 
308 
507 

1 


35,231 


459,000 


13 



Grand total | 4,089,897 i 56,092,000 

4 Prewar area, not including the 107,000 square miles claimed by France under article 125 of the Treaty 
of Versailles. See p. 266. 

5 Apparently an overestimate. It is given as 5,790 square miles in the Statesman's Year-Cook, 1920; also 
in earlier volumes. 

SITUATION AND COMMERCIAL IMPORTANCE. 

Algeria, lying between Morocco on the vrest and Tunis on the east^ 
has a Mediterranean coast line of about 650 miles. It reaches inland 
about 380 miles. Its area, exclusive of the Algerian Sahara, is esti- 
mated at 185,000 square miles; including the Algerian Sahara, it- 
amounts to about 222,000 square miles. 

The strip of hilly land from 50 to 100 miles in width along the sea- 
coast is on the whole very fertile. To the south lies an arid table- 
land covered with esparto grass, and beyond this is the Sahara Desert. 
The fertile area to the north, now owned mainly b}" Europeans, is 
cultivated scientifically and produces v\'heat, oats, barley, corn, pota- 
toes, beans, dura, flax, and tobacco. It also produces silk and a 
variety of fruits. The yield of vdne amounted in 1916 to 193,188, 000 
gallons, ilmong the cultivated fruits are olives, oranges, dates, m.an- 
darins, citrons, bananas, pomegranates, almonds, and figs. There is 
a considerable forest area, but it is inaccessible. Much attention is 
devoted to mining and grazing. The fishing industry is important. 

The leading exports are wine, cereals, live stock, fruits, iron ore, 
phosphates, tobacco, zinc, cork, vegetables, wool, hides, and alfa. 
The chief imports are textiles, clotning, furniture, machinery, coffee, 
tobacco, timber, and coal. Imports in 1913 amounted to 'approxi- 
mately 721,000,000 francs and exports 553,000,000 francs. 

Tunis, to the east of Algeria, is bounded on the north and east by 
the Mediterranean. Its area is about 48,000 square miles. In the 



FEANCE. 135 

north, agriculture is the main industry, the principal products being 
cereals and grapes. Farther south, attention is devoted mainly to 
stock raising and the cultivation of olives and date palms. On the 
coast, fishing is an important industry. The principal exports are 
phosphates, cereals, olive oil, live animals, and lead. The chief 
imports are flour, coal, sugar, cereals, hides, machinery, and hard- 
ware. About one-half of the total trade is with France. In 1920, 
exports were valued at 337,057,000 francs and imports at 635,563,000 
francs. 

Morocco, on the north coast of Africa west of Algeria, lies opposite 
Spain, from which it is separated by the narrow Strait of Gibraltar. 
The area of the French zone in Morocco is approximately 193,000 
square miles. Agriculture and stock raising are the principal indus- 
tries. The chief exports are hides and skins, barley, wheat, eggs, 
wool, almonds, and cattle. The principal imports are cotton goods, 
sugar, tea, provisions, and hardware. In 1920, the import trade pass- 
ing through the ports amounted to 1,000,474,000 francs, while the 
exports for the same year were valued at 268,875,000 francs. 

The Sahara is a name generally applied to ail of northern Africa 
between the Atlas Mountains and the Sudan. Spain has title to a 
section of the Sahara along the Atlantic coast, while the Saharan 
I)ortion of Tripolitania belongs to Italy,® and the desert farther east 
lies within Egypt and the Anglo-Egyptian Sudan. The area which 
the French administer under the name of the Sahara embraces 
about 925,000 square miles; the desert area included in the various 
French Provinces of North Africa totals about a million and a half 
square miles. As a whole the desert is not a level waste of sand; 
much of its soil lacks only water to make it very productive, and in 
the valleys where the subterranean waters come to the surface 
productive oases are formed. With the exception of dates and salt, 
the commerce originating in the Sahara is unimportant, but there 
is a considerable caravan transit trade between the Sudan and 
Morocco and Tripoli. 

Senegal, with an area of 74,000 square miles, lies along the west 
coast of Africa between the Senegal Kiver and Portuguese Guinea. 
Its coast line is broken by the enclave formed by the British colony 
of Gambia. The coast is flat and sandy, and along the Senegal 
River the soil is fertile. Agriculture has experienced a notable 
development recently. Millet, corn, manioc, and peanuts ^ are grown. 
Peanuts form the principal export. Gums, rubber, palm kernels, 
and cattle are also exported. The principal imports are cotton 
tissues, coal, rice, kola nuts, sugar, wine, edible oils, tobacco, and 
flour. In 1912 the exports were valued at 56,020,000 francs and the 
imports at 67,860,000 francs. 

Upper Senegal and Niger, as it was known until the end of 1920, is 
now the Upper Volta and the French Sudan ; it comprises an area of 
approximately 570,000 square miles. Including the military territory 
of the Niger, the area is about 836,000 square miles. Agriculture and 
grazing are the principal occupations. The crops include rice, corn, 
peanuts, millet, manioc, and tobacco. The chief exports are peanuts, 
rubber, hard gums, cattle, skins, and wool. The principal imports 

6 It is called the Libyan desert. 

' Many varieties, both edible and nonedible, of- peanuts are grown in Africa and Asia. They are also 
commonly known as groundnuts or earthnuts. 



136 COLOXI-\L TAEIFF POLICIES. 

are cottons, foodstuffs, and metal work. In 1912 the exports and 
imports via Senegal were valued at 3,422,410 and 9,803,^99 francs, 
respectirely. 

Mauritania, on tiie west African coast between the Senegal Kiver 
and the Spanish colony of Eio de Oro, has an area estimated at 345.000 
scjuare miles. For the most pai't it is a. countr}^ of sandy plains, 
hut in the south along the Senegal Eiver there is a fertile strip of 
land from 6 to 25 miles broad. Grazing and palm tending are the 
principal occupations. The trade, carried on by caravan, is largely 
barter. 

French Guinea, bordering on the Atlantic Ocean, is situated between 
Portuguese Guinea and Sierra Leone. To its north, northeast, and 
east are Senegal and Upper Senegal. The estimated area is some- 
what under 100,000 square miles. The alluvial soil along the rivere 
is fertile. Eubber, palm kernels, and gums are gathered, and millet, 
rice, sesame, manioc, and other crops are groT^TL Tlie principal 
exports are rubber, cattle, peanuts, and palm kernels. In 1912 
the exports and imports amounted, respectively, to 20,058,000 and 
19,274,000 francs. In 1016 thev were valued at 16,240,488 and 
9,689,291 francs. 

The Ivory Coast, between the British colony of the Gold Coast 
and Liberia, extends northward to L'pper Senegal and contains 
about 125,000 square miles. The colony is notable for its vast 
forest. Maize, plantains, bananas, pinea])ples, and other fruits are 
cultivated, as well as coffee. The principal exports are palm oil 
and rubber, palm nuts and mahogany. The principal imports are 
cotton tissues, tobacco, rice, machinery and iron manufactui-es, and 
distilled liquors. In 1912 the exports and imports amounted, 
respectively, to 17,616,000 and^ 17,5^4,000 francs, 

Dahomey, between British Xigeria and Togo, with a coast line of 
about 75 miles on the Gulf of Guinea, extends northward to L^pper 
Senegal, its area is estimated at somewhat under 40,000 scjuare 
miles. For 50 miles inland from the coast the country is flat and 
covered with dense vegetation. Farther inland it is hilly. The 
principal occupation of the people is agricultm^e. Corn, manioc, 
yams, and potatoes are cultivated. The chief exports are palm 
kernels, palm oil, copra, and dried fish. The principal imports are 
cottons, machinery, liquors, and tobacco. In 1911 the exports and 
imports were valued, respectively, at 21,958,301 and 19,524,531' 
francs. 

French Equatorial Africa comprises four divisions, three of which 
are ofhcially spoken of as ''colonies," though that designation is 
more commonly used for the whole area. These colonies or prov- 
inces are Gaboon, the ^Eddle Congo, the Ll>angi-Shari, and the 
Chad territory. The total area, including the territory ceded to 
Germany and reconquered in the late war, is about 672^000 square 
miles. The exports are chiefly rubber, ivory, and costly wood^. 
Other exports are coffee, cacao. ^ palm kernels, palm oil, and piassava. 
In 1912 the exports were valued at 28,035,000 francs and the 
imports 19,987,000 francs. 

The island of Madagascar is situated off the southeastern coast of 
Africa, 240 miles distant from the mainland. It is 980 miles long and 

- Cocoa in its raw siaie is more accurately oallsd eaeao. 



FRANCE. 137 

its greatest width is 360 miles. The area is estimated at 226,000 square 
miles. The island of Nossi Be and the Comoro Islands to the north- 
west, and the island of Ste. Marie, to the east, are under the Mada- 
gascar administration. The chief vegetable products of these islands 
are rice^ sugar, coffee, manioc, cotton, cacao, vanilla, tobacco, butter 
beans, cloves, mulbeny trees, and rubber. The forests contain 
many valuable woods.- Graphite and rubber are exported in con- 
siderable quantities. The principal occupations of the people are 
cattle breeding and agriculture. The chief exports of Madagascar 
are hides, gold, rubber, vanilla, rafha, legumes, wax, cattle, and 
ebony. Among the principal imports are cotton textiles, metal 
manufactures, metals, wines, and spirits. In 1912, the exports of 
domestic products were valued at 59,844,294 francs, while the im- 
ports for consumption amounted to 50,034,848 francs. 

Reunion, which is situated in the Indian Ocean about 420 miles 
east of Madagascar, has an area of 970 square miles.® The chief 
products are sugar, rum, coffee, tapioca, vanilla, and spices. Sugar 
and rum. are exported in considerable quantities. The chief imports 
are rice and grain. The exports amounted in 1917 to 26,782,472 
francs and the imports to 22,001,829 francs. 

French Somaliland borders on the Gulf of Aden betvfeen Eritrea 
and British Somaliland and extends inland to Abyssinia. Its area 
is about 5,790 square miles. There is a considerable transit trade. 
The chief exports are coffee, ivory, hides and skins, and salt. The 
chief imports are cotton goods, butter, sugar, and galvanized iron. 
The exports in 1917 were valued at 50,324,846 francs, while the im- 
ports amounted to 39,416,120 francs. 

French India consists of the five dependencies of Pondicherry, 
Karikal, Chandernagar, Mahe, and Yanaon^ with a total area of 198 
square miles. Mahe is on the southwest coast of India north of 
Calicut. Karikal, Pondicheny, and Yanaon are enclaves in Madras 
on the Gulf of Bengal and Chandernagar is located on the Hugli 
River north of Calcutta. The principal crops are paddy, ground- 
nuts, and ragi. The exports in 1917 amoimted to 20,366,326 francs 
and the imports to 13,225,207 francs. 

French Indo-China, comprising the colony of Chochin-China and 
the protectorates of Tonkin, Laos, Annam, and Cambodia, and the 
region of Battambang, is bounded on the east and south by the China 
Sea, on the west by Siam, and on the north by China. It has an 
area of about 310,000 sc|uare miles and a population of about 
17,000,000. Indo-China comprises three distinct economic areas: 
(1) The agricultural territory tributary to Saigon, one of the great 
rice-growing regions of the world; (2) the region tributary to Haifong, 
which is devoted to agriculture, mining, and manufacture; and (3) 
Central Annam, which is agricultural but not important as a rice- 
growing district. The minerals of Indo-China are coal, lignite, 
antimony, tin, wolfram, and zinc. The chief exports are rice (which 
forms about 70 per cent of the total), fish, pepper, hides, coal, cotton, 
rubber, and sugar. In 1919, the total commerce was valued at 2,293,- 
000,000 francs, or 1,332,000,000 more than the average for the pre- 
ceding Rve years. 

9The lonely islands of St. Paul and Amsterdam, situated about 37^ south, in the Indian Ocean midway 
between Africa and Australia are also French possessions; as is the island of Karguolen, 50° south and 70" 
east. These islands are of no present commercial value. 



138 COLONIAL TAEIFF POLICIES. 

New Caledonia^ situated some 600 miles east of Australia and a 
little north of the tropic of Capricorn, is 248 miles long and has a 
breadth of 31 miles. Its area is 7,200 square miles, of which more 
than haK is mountainous and noncultivable. The chief agricultural 
products are coffee, copra, cotton, manioc, maize, tobacco, bananas, 
and pineapples. Minerals, coffee, copra, rubber, and guano are 
exported. The imports are wine, coal, flour, and rice. In 1918, 
the exports amounted to $4,700,000 and the imports to $3,900,000. 
Other French islands in the Pacific, dependencies of New Caledonia, 
are the Isle of Pines, the WaUis Archipelago, the Loyalty Islands, 
the Yuon Islands, and Futuna and Alafi. 

The ''French estabhshments in Oceania" consist of a great number 
of small islands scattered over a wide area in the least frequented 
part of the Pacific. They lie 2,000 to 3,000 miles south and south- 
east of Hawaii and at even greater distances from New Zealand 
and South America. They comprise the Society Islands, the Mar- 
quezas Islands, the Tuamotu group, the Leeward Islands, and the 
Gambler group, the Tubuai group, and Ropa Island. The total 
area of these is estimated at 1,543 square miles. 

St. Pierre and Miquelon, close to the south coast of Newfoundland, 
have a combined area of 93 square miles. The chief industry is 
cod fishing, which is on the dechne. The principal exports are 
cod fish and fish products. The imports include textiles, salt, 
wines, foodstuffs, and meats. The exports in 1915 were valued 
at 8,919,000 francs and the imports at 2,574,000 francs. 

Guadeloupe, situated in the Lesser Antilles (West Indies), consists 
of two islands separated by a narrow channel. Guadeloupe has 
five island dependencies, namely, Marie Galante, Les Saintes, 
Desirade, St. Barthelemy, and St. Martin. The total area of the 
whole colony is 958 square miles. The chief products are sugar, 
coffee, and cocoa. 

Martinique, another of the Lesser Antilles, has an area of 381 
square miles. The principal products are sugar and cocoa. Coffee, 
tobacco, and cotton are also produced. The exports in 1915 
amounted to 41,957,325 francs, the imports to 22,439,125 francs. 

French Guiana, on the north coast of South America, between 
Dutch Guiana, and Brazil, has an area of about 34,000 square miles. 
There is very little agriculture. Rice, maize, manioc, cocoa, coffee, 
sugarcane, indigo, tobacco, and gutta percha are produced. Gold 
mining is the principal industry. The exports consist of cocoa, 
phosphates, various woods, gold, rosewood essence, and hides. 
The exports in 1915 amounted to 11,371,905 francs, the imports 
to 10,171,597 francs. 

The total foreign trade (imports and exports) of the French col- 
onies for the year 1913 amounted to 3,261,158,000 francs, as com- 
pared with a foreign trade of 19,984,300,000 francs for France for 
the same year. 

Table 2 shows the value of the trade of the French colonies in 
1913, and the portion carried on with the mother country, with 
each other, and with foreign countries. 



FEAITCE. 



139 



Table 2. — Trade of the French Colonies, 1913. 
[In thousands of francs.] 



Colony. 



Algeria . = 

Indo-China 

French-Morocco 

Tunis 

West Africa 

Madagascar ^ 

French Somali land 

Equatorial Africa 

French India 

Martinique 

Reunion 

Huadeloupe'' 

New Caledonia ^ 

French Guiana 

French Oceania 

Saint Pierre and Miquelon 



Total trade. 



Total trade. 



1,27.3,667 

650, .591 

221,607 

322, 918 

277,718 

102, 802 

81,621 

57, 847 

51,557 

51,041 

41,527 

38, 462 

33, 546 

24,717 

20, 585 

10,559 



Imports. 



720, 728 

305, 332 

181,427 

144, 255 

151, 574 

46, 747 

33,917 

21, 182 

10, 837 

22, 144 

24, 935 

20, 174 

17, 708 

12, 495 

9,030 

4,357 



Per cent 
of total 
trade. 



56.6 
47.0 
81.9 
44.7 
54.6 
45.4 
41.6 
36.6 
21.0 
43.4 
60.0 
52.5 
52.8 
50.5 
43.9 
41.3 



Exports . 



552, 949 

345, 259 

40, ISO 

178, 664 

126, 144 

56, 054 

47, 704 

36, 665 

40, 720 

28, 897 

16,592 

18, 287 

15,838 

12,223 

11,555 

6,202 



Per cent 
ol total 
trade. 



43.4 
53.0 
18.1 
55.3 
45.4 
54.5 
58.4 
63.4 
79.0 
56.6 
40.0 
47.5 
47.2 
49.5 
56.1 
58.7 



Colony. 



Algeria 

Indo-China 

French Morocco 

Tunis 

West Africa 

Madagascar 4 

French Somaliland 

Equatorial Africa 

French India : . . . 

Martinique 

Reunion 

Guadeloupe ^ 

New Caledonia ^ 

French Guiana 

French Oceania 

Saint Pierre and Miquelon 



Trade with France. 



Per cent 
of total 
imports. 



82.8 
35.1 
2 61.0 
52.8 
43.9 
83.0 
23.1 
41.2 
3.8 
51.0 
47.4 
55.5 
48.5 
65.4 
]6.3 
52.5 



Per cent 
of total 
exports. 



67. 
22. 
^52. 
40. 
52. 
61. 
7. 
39. 
60. 
93. 
92. 
89. 
40. 
67. 
13. 
88. 



Trade with French 
colonies-. 



Per cent 
of total 
imports. 



.7 

2.6 

39.7 

1.6 

1.8 
4.3 



Per cent 
of total 
exports. 



1.4 


1.6 






1.5 
3.3 

.4 
.4 


.3 
5.6 
1.3 



6.9 
3.2 
4.0 
3.6 
1.4 
.4 



Trade with For- 
eign countries. 



Per cent 
of total 
imports. 



1 17. 

63. 
3 39. 
147. 

54. 

13. 

76. 

58. 

95. 

46. 

12. 

42. 



Per cent 
of total 
exports. 



132.9 

75.9 

M7. 1 

159.1 

47.1 

33.1 

91.2 

60.7 

33.0 

3.8 

3.4 

6.7 

57.8 

32.6 

86.3 



1 Including trade with other French colonies. 

2 Trade with France and Algeria. 

3 Including trade with French colonies other than Algeria. 
■1 And dependencies. 

II. Government of the Colonies and the Making of Tariffs. 



GOVERNMENT. 

The difference in the political status of the various French colonies 
is considerable, though there is none among them that corresponds 
to the British self-governing Dominions, Since 1881, Algeria has 
been treated for most purposes as a part of France ^^ and is not tech- 
nically a colon}/. Tunis, Morocco, and parts of Indo-China are pro- 
tectorates, governed by native rulers with the ''advice^' of French 
'^ residents," in accordance with treaties which give to the French 
complete control over foreign affairs, and a less defined influence in 

10 In the political system it consists of three "Departments." 

185766°— 22 -10 



140 COLOI^-IAL TAEIFP POLICIESe 

domestic matters. The New Hebrides ^ in so far as they are governed 
by Europeans, are under the jomt controlj or ^^ condominium^'' of 
France and Great Britain. 

The other French possessions are colonies proper, and they faL^ — 
including the whole of Indo-China — under the jurisdiction of the 
colonial ministry.^^ Laws dealing with the colonies collectively 
usually read: ^'the colonies and the protectorates of Indo-China." 
Such laws do not appl;^ to Algeria, Tunis, Morocco, and the New 
Hebrides. Of the colonies proper Guadeloupe, Martinique, Keunion, 
Guiana, French India, Senegal, and New Caledonia have elective 
"Councils General." But whether they have a Council General or 
only an advisory Administrative Council for an all-powerful governor, 
there is in the colonies only a limited field for legislative determina- 
tion by the local government. All matters of importance must be 
approved by the authorities in Paris. Indeed, in any matter and at 
any tim.e the French Chambers may legislate for the colonies di- 
rectly, while to a large extent the colonies are subject to government 
by decrees from Paris. Such decrees are either simple decrees of 
the President, that is, of the minister of colonies, or ^'decrees in the 
form of regulations of public administration;" that is, decrees of the 
Council of Sta,te. 

Over the government in Paris the colonies have little influence. 
Several of them are represented in the legislative bodies, but the total 
representation of Algeria and all colonies is only 7 out of the 314 
senators, and 16 out of the 610 deputies. ^^ 

THE MAKING OF COLONIAL TARIFFS. ^ 

The home government has kept strict control over tariff policy.'* 
The parts taken by the French legislature and the French executive 
respectively in this control will be described in a general v/ay in the 
following paragraphs, but certain points will be reserved until certain 
peculiarities of the French colonial tariff system have been explained. 

The French legislature has supreme control over the colonial tariff 
system. It is not limited by any constitutional provision on the sub- 

11 The residents in Tunis and iiorocco arc subject to the ministry of foreign affairs. This ministry has ' 
a division of African affairs (sous-direction d'Afnquej which in addition to governing Tunis and Morocco 
controls the I^Ioslem pohcy of France and controls the relations of the French African colonies to other 
French colonies and to foreign countries (L'Airique Frangaise, 1918, p. 126.) 

In the Chamber of Deputies a single committee formerly dealt with foreign and colonial affairs, but 
early in 1920 the chamber adopted a proposal to have separate committees for foreign affairs and for the 
colonies, but the proposal was adopted only after it had been so amended that the protectorates and 
Algeria were included with the colonies proper. (lb., 1920, p. 66.) 

^ The representation of the colonies in the national legislature is fixed by the coi]stltuti'^;n, iDut the num- 
ber of deputies representing France increases with the increase of the population. Twenty-odd years 
ago the colonies were represented by 16 out of 584 deputies. The membership of both Senate and Chamber 
has been increased recently by the addition of representatives of Alsace-Lorraine. 

There is also a superior council of the colonies, upon which all the colonies (except Somahland and the 
protectorates of Morocco and Tunis) are represented, either by delegates elected for that purpose, or by 
their senators and deputies. This council was instituted in 1883, but did not meet after 1886. It has now 
been reorganised in three sections, by decree of Sept. 28, 1920. (a) The hi:.h coLinial council (composed of 
ex-ministers of the colonies, ex-governors general, and representatires of the ministries of foreigh affairs, 
war, and navy, under the presidency of the colonial minister) is to consider general administrative and 
economic problems, political and mihtary organisation, and the status of natives. (6) The economic- 
council (composed of the senators, deputies, and delegates of the colonies, representatives of the central 
and colonial governments taken from the departments v/hich deal v^^ith economic matters and other mem- 
bers appointed for their special experience in financial, industriah commercial, agricultural, or maritime 
affairs affecting the soUdarity of the colonies and the m^other coujitry) is divided into seven sections for 
the consideration of problems relating to foodstuffs, fats, textiles, minerals, forest and vegetahle products, 
maritime transport, and travel and colonial propaganda, (c) The council of colonial legislation (com- 
posed of members appointed for their competence, together with a fev/ officials and representatives of any 
colony concerned in the subject under deliberation) is" to consider legislation for fiscal and administrative 
reforms. See preamble and text of the decree in the Journal Olficiei, September 30, 1920, pp. 1445-1419. 

13 Except in Martinique, Guadeloupe, and Reunion, in 1866-1892, see p, 143. 



FEAIsTGE. 141 

je-ct. Its power is equally great in resj)ect to the general rules, the 
exceptions to these rules, and the precise rates to be applied. In 
practice, however, through the greater part of the system the power 
of determining the exceptions and the rates is delegated to the execu- 
tive; but this does not prevent the legislature from acting directly 
if it so desires. 

The relation between authority and product in the making of the 
colonial tariffs may be stated as follows: There are (a) rules laid down 
by the legislature and not subject to modiiication by the executive; 
(h) rates fixed by the legislature, but for the most part subject to 
change by the executive; (c) and rules and rates left entirely to the 
executive^ 

(a) The general rules made by the legislature and not subject to 
exceptions made by the executive provide that the products of the 
assimilated colonies shall enter France free and that intercolonial 
trade shall be free. Exceptions can be made only hj the legislature. 

(h) The legislature fixes the tariff rates for foreign goods imported 
into the a.ssimilated colonies, and it also fixes the minimum tariff 
rates of France which are normally to be paid by the products of the 
nonassim.ilated colonies on entry into France. The French legislature 
makes these rates primarily for France, and they apply automatically 
to the assim-ilated colonies unless, as was provided in the tariff 
revision law of 1910, their application is explicitly made dependent 
on action by the executive. To these rates the executive may make 
exceptions as soon as the schedules are in force. ^^ For Tunisian 
goods entering France the legislature itself determines the special 
reductions and exemptions, while it leaves to the executive the 
determination of the quantities of goods that shall benefit by these 
reductions. 

(c) The powers invested in the executive either before or by the 
tariff act of 1892 may be set forth under four heads: 

(1) In the case of nonassimilated colonies and where there are no 
treaty restrictions, the executive may exercise, by decree, full 
control over the tariff regimes. 

(2) In the case of assimilated colonies the executive may, in the 
absence of treaty restrictions, change the legislative rate (that is, 
the French tariff rate) upon a.ny article or articles, either increasing 
or decreasing it, the only limitation on this power being that the 
local council general, or council of administration, must be consulted — 
though its views may be entirely ignored, ^^ These special rates 
established by the executive continue in force even if the legislature 
later prescribes in the general tariff new rates for these articles, 

(3) The executive may also grant to any product of any non- 
assimilated colony on entry into France exemption from a part or all 
of the minimum duty which it would pay under the general rule of 
the law of 1892. Decrees for any of the purposes specified above 
are made as '^decrees in the form of regulations of public administra- 
tion/' that is, decrees of the Council of State. They will be further 
discussed under the heading '^Modifications of the system.' ' 
(See p. 151.) 

(4) Under the law of 1890, which granted special reductions or 
exemptions to Tunisian products, it was provided that the quantities 

" This does not apply to Algeria, the tariff regime of which is not subject to revision by the executive. 
i« The local council may take the initiative and request a change of rates. 



142 COLONIAL TAEIFF POLICIES. 

of such products to be admissible at the reduced rates should be 
determined annually by simple decree, that is, by a decree in the 
name of the president but upon the responsibility of the minister 
or ministers too countersigned it. ^ ^ , 

In addition to this extensive authority in relation tbthe colonial 
tariff system, the executive is empowered to approve or disapprove 
the colonial consumption duties, as will be explained. This descrip- 
tion of the power usually exercised by the legislature and of the 
executive relates to times of peace; in time of war the executive 
becomes practically supreme. 

As a general rule, decrees relating to the tariffs of the colonies are 
issued separately for each colony because the tariff provisions differ 
for each of them. Some decrees, however, are made to apply to the 
colonies collectively or even to France and the colonies. For instance, 
a decree of November 8, 1919, ^^ prohibited the exportation of arms 
to China from France, Algeria, and the French colonies and pro- 
tectorates. 

In West and Equatorial Africa areas under the same colonial 
government are subdivided for tarLff purposes, so that there are 
among the colonies no less than 20 different tariffs, no two of which 
have exactly the same charges. While the French colonial tariffs 
exhibit variety and sometiiing^ of complexity, it is possible to group 
them in a threefold classification, and to that end there will be dis- 
tiaguished in this report the '^ assimilated'^ colonies, the ''special 
regime'^ colonies, and the ''open-door" colonies, 

III. Colonial Tariff Policy and System. 

EARLIER POLICY. 

The colonial tariff policy of France has undergone several radical 
and sudden changes in the past century and a half. To begin with, 
the French Revolution ^wept away the monopolistic policy of the old 
regime; it was then decreed that there should be no tariffs between 
France and her colonies, for the latter were considered parts of 
France herseK. ^^ At the same time the duties on goods from foreign 
countries were reduced. 

But when the first Napoleon rose to power there was a reversion 
toward the older exclusive system, and it was not until Napoleon III 
became Emperor that that system was definitely abandoned. By 
a ''veritable coup d'etat," Napoleon III, through a series of treaties 
(1860-1866), imposed a liberal tariff policy on France. The first and 
most important of these treaties, the "Cobden treaty" with Great 
Britain, was a product of secret diplomacy and was not even con- 
firmed by the French legislature.^^ 

Napoleon III at the same time liberalized France's colonial tariff 
policy. The main features of the colonial system established in the 
years 1861-1870 were as follows: 



i«Clreulaire, serie g^nerale, No. 168, or Journal Offieiel, November 16, 1919. The term protectorate 
in this decree does not mclude Tunis or Morocco. 

17 This policy was called tariff "assimilation." By tariff assiaiilation of their colonies the French meant 
the establishment of a customs union— a common tariff barrier around France and the colonies Imposing 
the same rates upon foreign goods whether imported into France or into the colonies, while within this 
barrier free trade was to exist between the mother country and the colonies and among the various colonies. 
This is still the theory of assimilation, though no part of it is consistently carried into practice 

18 Augier , Chas. , and Marvaud, Angel: La Politique douaniere de la France dans ses rapports avec celle 
des autres 6tats, 1911, pp. 3, 5. 



FRAlsrCE. ^ 143 

(1) Foreign goods might now enter the colonies. The older rule 
which forbade them this privilege had already been modified in 
1845-46, 

(2) Colonial products might now find a market in foreign countries. 

(3) The trade with the colonies was thrown open to the ships of 
every nationality subject to the payment of navigation surtaxes, and 
after a short interval these surtaxes were discontinued. 

(4) Duties on colonial goods imported into France were abolished 
or reduced, though for purposes of revenue it was thought necessary 
to maintain a part of the duties on the chief colonial products, such 
as sugar, coffee, and cocoa. 

(5) Guadeloupe, Martinique, and Reunion,- which were then "the 
colonies" in the eyes of Frenchmen, received "tariff autonomy" (in 
1866), and when they made use of this to abolish the duties which 
fell only on foreign goods and to increase the octrois which fell on all 
goods alike, the Council of State ratified the decrees. 

(6) Goree, in Senegal, was made a free port, while Guiana had 
duties of 3 per cent without discrimination. 

In short, the system was liberal throughout. ^^ xls a result partly 
of the commercial depression which began in 1873, the mid-century 
liberal movement rapidly lost headway. By the end of the seventies 
most of the countries of continental Europe had returned to protection, 
France was more deliberate. The tariff was not revised until 1881, 
and even then treaties with a dozen countries maintained the older 
rates in force for their goods; but after the crisis of 1882 the protec- 
tionist movement "vigorously manifested itself," and within the 
decade successive acts put duties on sugar, cereals, cattle, alcohol, 
and a number of other articles. Finally the law of January 11, 1892, 
"crowned the triumph of protectionism." Relations with the colo- 
nies naturally were affected by this movement. The Algerian tariff 
was assimilated to that of France in 1884, that of Indo-China was 
assimilated in 1887, while in and after 1884 special duties on foreign 
products were established in various French colonies. ^^ The parti- 
tion of Africa, accompanied by a great increase of interest in all 
colonies, took place during this period. 

THE TARIFF LAW OF 1892 POLICY. 

By the tariff law of January 11, 1892, France returned to the policy 
of tariff assimilation which had been adopted by the French Revolu- 
tion as an expression of the brotherhood of man. But in 1892 the 
emphasis was rather on the thought that the colonies should reim- 
burse France for the expense to which she had been put in the recent 
large acquisitions of territory than upon any broadly humanitarian 
purpose. This could be done, it was felt, by compelling the colonies 
to buy a larger share of their imports from France through the estab- 
lishment of a customs union, thus converting France's unfavorable 
balance of trade with the colonies into a favorable balance. 

19 Although in Algeria the full French tariff was collected on textiles, beverages, and a few other items 
and two-thirds of the French rate was charged on many manufactured articles. Arnaune, Aug.: Le Com- 
merce exterieur et les Tarifs de Douane, 1911 , pp. 148, 269-274; Move, Marcel, and Nogaro, Bertrand: Les 
Regimes Douaniers, 1910, p. 41; Girault, Arthur: The Colonial Tariff Policy of France, 1916, pp. 60, 71-80. 

20 Girault: Op. cit. , pp. 6, 84-89; Moye and Nogaro: Op. cit., p. 46; Trescher, E.: Vorzugszolle, Ihre Ge- 
schlchte und Wirkung im Internatiorialen Warenaustausch, 1908, pp. 80-83. 



144 COLOIs^IAL TABIFF POLICIES. 

TSEATY LIMITATIONS, 

Owing to treaty obligations, France has at no recent time had an 
entirely free hand in regard to her colonial policy. The motiyes 
which led France to assume those obligations need iiot detain us 
here, but it will be useful to consider certain treaties which, existing 
in 1892, affected the policy adopted then, as well as various treaties 
entered into since th^t time which relate to colonial tariffs. The 
provisions of these treaties will be here treated, not in chronological 
order, but in succession according as they relate to the subjects (1) 
of the open door in Central and West Africa, (2) of the limiting of the 
trade in alcohol and arms^ (3) of the customs duties of Tunis, Morocco, 
Somaliland, and the New Hebrides, and finally (4) of the minimum 
tariff in the assimilated colonies. 

THE OPEN DOOH IX CENTRAL AND WEST AFRICA. 

The general act of the conference of Berlin, 1884-85, provided for 
freedom of trade and of navigation in the basin of the Congo, so 
defined as to include territory east and west to the Indian and the 
Atlantic Oceans. Most stringent provisions prohibited import duties 
for 20 years and transit duties in definitely, limited navigation fees 
on the Congo and its affluents to compensation for port and river 
nnproTements, and carefully excluded all differential features. Ex- 
port duties were not prohibited^ however, and a declaration which 
was added to the general act of the Brussels antislavery conference 
in 1890 authorized import duties not to exceed 10 per cent.^^ 

France, Portugal, and the Congo State then agreed in 1892 to limit 
import duties in the western part of the Congo basin to 6 per cent ad 
valorem, with certain exceptions. This accord remained in force, 
the rate being raised to 10 per cent in 1902 and the valuations in- 
creased in 1907, until denounced by France in 1911. 

Because of the provisions of the general act of the conference of 
Berlin it was impossible, when Gaboon became an assimilated colony 
nuder the French tariff law of 1892, to apply the French tariff to 
that part of the colony lying within the Congo basin. By another 
treaty Dahomey was necessarily excluded from the list of assimilated 
colonies, at least for a time, and this exclusion was doubtless a factor 
in determining the status of West Africa as well as in the confirmation 
of the open-door policy in both Dahomey and the Ivory Coast by the 
treaty negotiated in 1898 between France and Great Britain. 

Dahomey and Togo had for many years identical tariffs, with 
no customs line between them, by agreements of 1887 and 1889, and 
the treaty of 1898 with Great Britain guaranteed for 30 years com- 
mercial equality in the Ivory Coast and Dahomey, in the Gold Coast 
and Nigeria, and, by an extension agreed upon before the treaty was 
ratified in 1899, in the country south and east of Lake Chad to the 
conventional basin of the Congo and to the Nile. In practice, other 
powers have enjoyed the benefits of these arrangements equally with 
the signatories. 

2i See the chapter on the Congo for a- full account of this treaty and related matters, p. 85. 



FRANCE. 145 

LIMITATION OF THE TRADE IN ALCOHOL AND ARMS. 

The international conference held at Brussels in 1890 placed 
restrictions on the traffic in alcohol and arms throughout that part 
of the Afric^ji continent which lies between 20° north and 22° south. 
The area thus delimited includes, on the Atlantic coast, the territory 
from somewhat north of Waliish Bay almost to the Rio de Oro, and 
on the Red Sea and the Indian Ocean, most of the Sudan and a large 
part of Portuguese East Africa, extending northward beyond Suakin 
and southv/ard beyond Sofala, Liberia acceded to this treaty on 
August 11, 1892, and the Sultan of Zanzibar was a party to it, so 
that Abyssinia was the sole territory within the limits set which was 
not subject to its provisions. 

It was agreed at the Brussels conference in 1890 that as soon as the 
treaty should becom^e effective the duty on alcoholic liquors should 
be raised, where it was less, to 15 francs per hectoliter (10.957 cents 
per gallon) of alcohol of 50° strength, and that three years later this 
rate might be increased to 25 francs. This agreement was revised 
on June 8, 1899, and it was provided that the rate should be 70 
francs,^^ with proportionate increases for alcoholic strength above 
50°, for a period of six years; and later, by a convention of November 
3, 1906, the rate was raised to 100 francs (73 cents per gallon), for 
10 years. These various agreements likewise stipulated that any 
liquors produced locally should pay an excise not lower than the rate 
of duty, and that in districts where the use of liquor was forbidden 
by the religion of the natives, or where for any reason its use had not 
developed, its entry should be altogether prohibited. 

It was further agreed by the Brussels conference of 1890 that as 
an aid to the suppression of slavery throughout the aforesaid territory 
no arms should be sold to the natives in any district where the slave 
trade continued, nor should any arms of precision, such as breech- 
loading and magazine rifles, be sold to any natives anywhere. Flint- 
lock guns and common gunpowder, known as ^' trade powder,'' might 
be sold under certain restrictions. This was to be put in force for 
12 years and then for further periods of 2 years until denounced with 
6 months' notice. To this was added by a protocol of July 22, 1908, 
a total prohibition of the importation, except for transit, and of the 
sale to natives, of all arms, within a territory extending on the Atlan- 
tic coast from the Cross River to 25 kilometers south of the Congo 
and extending inland to include all of Kamerun, the southern part 
of French Equatorial Africa, and a large part of the Congo State. 
This agreement was made for the four years following February 15, 
1909, and was denounced by France on February 6, 1912. Another 
agreement, of June 15, 1910, amended the declaration of 1890 with 
regard to import duties, by allowing the imposition of a duty greater 
than 10 per cent on arms, 

THE CUSTOMS DUTIES OF TUNIS, MOEOCCO, SOMALILAND, AND THE NEW HEBRIDES. 

In both Tunis and Morocco the French, when they established 
their protectorates, found themselves bound by preexisting treaties. 
In the case of Tunis the treaty of 1875 with Great Britain prohibited 
duties exceeding 8 per cent ad valorem and contained various other 

22 Togo and DaJioiney were allowed a rate of 60 francs. 



146 . COLONIAL TARIFF POLICIES. 

restrictions affecting the tariff; and numerous treaties of earlier 
and later dates extended these provisions, through the operation 
of the most-favored-nation clause, to other countries. France, 
therefore, could give her merchants no preference in Tunis until a 
series of treaties and declarations in 1896 and 1897 cleared the way 
for the practical assimilation of the Tunisian tariff in 1898. Even 
then, until 1905, the treaty with Italy prescribed that rates in the 
Tunisian tariff should not be higher than the minimum tariff of 
France.^^ (France was not prevented, however, from giving her 
colonists in Tunis an advantage in her own market. This was done 
in 1890.) 

Similarly, when the French protectorate in Morocco was finally 
recognized in 1912, the tariff was already limited by treaties dating 
as far back as that with Great Britain in 1856, which stipulated 
that the import duties should not exceed 10 per cent. Then, too, 
there were the stringent provisions of the general act of the con- 
ference of Algeciras, in 1906, against any sort of commercial dis- 
crimination. That conference, however, permitted a surtax of 
2h per cent in addition to the 10 per cent previously allowed as the 
maximum import duty. 

A treaty of December 13, 1906, relating to Eritrea and the three 
Somalilands, and to which France, Great Britain, and Italy were 
parties, prohibited transit duties except to the extent necessary 
to cover the cost of supervising the traffic in arms and alcohol. It 
contained an express provision that all other powers should benefit 
by these stipulations. A French treaty of 1906 with Great Britain 
provides for equal tariff treatment in the New Hebrides and stipu- 
lates that all tariff rates shall be agreed upon between the commis- 
sioners of the two countries. 

THE MINIMUM TARIFF IN THE ASSIMILATED COLONIES. 

Finally, it should be noted that certain treaties distinguished 
between the colonies and the mother country in regard to the right 
to the minimum tariff. The law of 1892 nationalized the tariff 
and expressly extended to the countries entitled to the minimum 
tariff of France, the same right to the minimum tariff in Algeria 
and the assimilated colonies.^* This free extension of the right to 
the minimum tariff of the colonies was attacked by the protectionists 
as extravagant, and some of the later treaties exclude the colonies, 
but not Algeria, from arrangements for the minimum tariff, or 
include them only in return lor further concessions. The treaties 
with Haiti, June 31, 1900, and January 31, 1907, mention only 
France and Algeria and thus do not ap|)iy to the colonies. Treaties 
of 1906 and 1907 with Bulgaria, Servia, and Roumania provided 
that the colonies might be included on the demand of France on 
two months' notice. Similarly, the treaty with Portugal, effective 
by a decree of February 20, 1911, gives to products of Portugal, 
Madeira, Porto Santo, and the Azores the advantage of the minimum 
tariff in France and Algeria only. Likewise the provisions of the 
treaty with Japan (August 11, 1911) have never been extended to 

23 There were certain exceptions to this prohibition. 

24 The nonassimilated colonies have no minimum tarifis. The Protectorate of Tunis is not an assimi- 
lated colony within the meaning of the law in question. 



FRANCE. 147 

French Indo-China and Oceania, though they applied to all the 
Japanese possessions. This exclusion was due to the refusal of 
Japan to make the desired concessions in favor of rice from Indo- 
China, and 'hence "established a new principle; that the grant of 
the privileges of the minimum tariff in France should be regarded 
as compensation for advantages accorded for the products of Franco 
proper; while the grant of the privileges of the minimum tariff in 
the colonies should be regarded as compensation for advantages 
accorded to the products of those colonies.'' ^^ 

In order to obtain a free hand in the reconstruction period, France 
denounced all her commercial treaties. It remains to be seen whether 
the ''new principle" will be embodied in the new series of trade 
agreements. The colonies are omitted from the Franco-Canadian 
agreement of 1921, 

The decrees fixing special tariff rates in the colonies name only 
a single rate of duty which takes the place of the French general 
and minimum tariffs. The only exceptions are that in 1911 general 
and minimum rates were set upon one or more articles in Guiana, 
Guadeloupe, Madagascar, and Indo-China, and upon a score of 
items in New Caledonia. 

COLONIAL TARIFF SYSTEM. 
UNDER THE LAW OF 1892. 

As the present colonial tariff system is based upon the tariff law 
of 1892^ it will be profitable to examine its leading features as estab- 
lished at that time. 

Classification of the colonies. — The law of 1892 did not apply the 
policy of assimilation to all of the colonies. The more important 
colonies were assimilated ; the others were not, either because treaties 
stood in the way, or because their importance lay chiefly in their 
situation as centers of transit and transshipment, or because their 
small size and their distance from France prevented the prospect 
of much gain from them. Thus the law divided the colonies into 
two classes — the assimilated colonies and the nonassimilated. The 
customs duties to be collected in the nonassimilated colonies were 
not provided for in the legislation of 1892, and as a matter of fact 
the utmost diversity exists among the tariffs of these colonies. On 
the basis of their actual tariff systems the nonassimilated colonies 
may be further divided into two classes, '^ special regime" and 
''open door" colonies. The characteristics of the three classes of 
colonies here enum-erated may be summarized as follows: 

A. Assimilated colonies (tariff characteristics) : The assimilated 
colonies have in general free trade ^® with France and present to the 
trade of foreign countries the same tariff barrier that is found in 
France.^' These colonies thus give the maximum of advantage,^^ as 

2^ Girault: Op. cit., pp. 123-126. Continuing, by way of comment, Girault says: " From this point it is 
only a step to a policy of separate agreements, some relating to the national domain, others, not to the 
colonies in general, but to the several colonies in particular. This step will doubtless be taken sooner 
or later." 

26 " Free trade" here refers only to customs duties. For other duties see p. 148. The entry of French 
goods into the colonies free of customs duties preceded the law of 1892. 

2' There were under the law of 1892 important exceptions to the free entry of colonial products into France, 
but these have since for the most part been done away with. The council of state may modify the applica- 
tion of the French tariff to the assimilated colonies. 

28 Unless the unusual measure should be adopted of giving the colonies a tariff higher than that of the 
mother country. 



148 COLOI^IAL TARIFF POLICIES. 

far as tariff is a factor, to French, trade, and they are given a corre- 
sponding advantage in the French market. 

B. Nonassimilated colonies with special regimes (tariff character- 
istics): The special regime colonies have individual tariffs, in which 
customs duties are imposed only on foreign goods. The rates of 
duty have no necessary relation to those of the tariff of France or 
of any other tariff ; they may be proposed locally but are decreed only 
by the French Council of State. Products of these colonies entering 
France may be granted special rates or exemptions, by decree; 
otherwise they pay the minimum rates. The tariffs of colonies in 
this grou|) discriminate less against foreign goods than do those of 
the assimilated colonies, for their rates are lower than those of the 
tariff of France. 

C. Nonassimilated colonies with ''open door" (tariff character- 
istics): The open-door colonies have either slight duties or none, 
but in any case they put no heavier duties on foreign goods than on 
French products. Their products when entering France normally 
pay the French m.inimum. duties; that is, the rates conceded to the 
m-ost-favored other countries in exchange for equivalent commercial 
concessions; but in 1892 the French Council of State was empowered 
to grant them lower rates by decree — and a number of such special 
reductions have been made. Although certain of their products thus 
enjoy a preference in the French market, these colonies grant no 
preference to French goods. 

Treatment of irvler colonial trade. — Trade between the colonies is 
free, except trade in foreign products. The tariff law of 1892 estab- 
lished the rule that, regardless of the classification of either colony, 
'' native products of a French colony which are imported into another 
French colony, shall not be subject to customs duty" ; and, '^ foreign 
products imported from a French colony into another French colony, 
shall be subjected in the latter to the payment of the difference 
between the duties of the local tariff and those in the tariff of the 
exporting colony." (Art. 5.) The protectorates of Tunis and 
Morocco and the Condominium of the New Hebrides are not colonies 
within the meaning of this article. Algeria was at one time held to 
be such a colony but this ruling was later reversed. See p. 179. 

Levying of additional charges on imports. — The French colonies 
employed before 1892 and they still retain certain other imposts 
upon imports, not materially affected by the law of 1892, which by 
reason of the burden which they impose and of the degree to which 
they are inevitably related to custom.s duties commercially and 
economically, can not be neglected. These may be called collec- 
tively '^ consumption duties," although they go under the names 
octroi de mer, droit de consommation, and droit d' importation. 
The two last nam.ed are obviously "consumption duties " and " duties 
on importation," but the term octroi de mer is not easily translated. 
The characteristic feature of the octroi de mer is that its proceeds, 
beyond 6 per cent or 10 per cent retained for costs of collection, are 
distributed among the comimmies instead of going into the general 
treasury of the colony. The droit d'importation is found only in 
Equatorial and West Africa and does not differ legally from the 
consumption duty. In Dahomey and the Ivory Coast it is the only 
duty imposed, but the use in the law of the term ''customs duty" 
would, according to French law, have conferred free entry upon the 



FRANCS, 149 

products of France and of the other colonies. The use of the dis- 
tinctive term ^^droit d'importation" allows the maintenance of the 
open door without inconsistency or conflict. Several of the colonies 
have both the octroi de mer and the droit de consommation. 

All three Tof these imposts differ from the customs duties in two 
respects. First and chiefly, according to French usage, a customs 
duty is a duty falling only on foreign goods, while, by definition, any 
of the three consumption duties must fall equally -on goods of all 
origins. Second, these imposts, as is explicitly laid down in the law 
of 1892 for the octroi de mer, w^ere to be levied hj the local councils. 
The Council of State might veto them, but they might be put in force 
provisionally by the Colonial Governor before being considered by 
that council,"® 

On the other hand, these three imposts present to the merchants 
who deal in foreign products exactly the same type of cost factor as 
do the customs duties. The customs authorities collect them, and 
all the rules in regard to declarations, tares, bonding, etc., apply 
equally to them. Yet the importer of foreign products finds that his 
rivals who import French goods have no advantage in respect to these 
duties, and that in theory and to some extent in practice these duties do 
not afford protection eve|^ to local industry. It was laid down explicitly 
in 1884 that the octroi of Algeria should be paid on the articles 
specified if consumed in Algeria, whether imported or of local origin. 
Such a provision is found generally in the decrees which fix the rates 
of the colonial octrois de mer and droits de consommation, and 
in some cases the Cour de Cassation and the Council of State have 
condemned as ultra vires the imposition of certain of these consump- 
tion duties, because they did not fall on local products equally with 
imported products and hence were protective in character. Accord- 
ing to these decisions — there are conflicting decisions and the rule is 
not generally enforced — any duty discriminating between French and 
foreign trade and any impost protecting the local market against 
French goods is necessarily a ^'customs duty" and can not be included 
with any of these three consumption duties. Therefore the impo- 
sition of such charge can not be originated by the local council, but 
must be wholly within the power of the French Council of State both 
to originate and to reject. The local council may petition for it; it 
can do nothing more. There is some disposition to rec^uire that the 
octrois be limited to the list of articles which may be similarly taxed 
in the French cities and to enforce the rule applicable to them in 
France that octrois can be decreed only for periods of five years.^^ 

Colonial authorities levy also various fees, either upon goods or 
upon shipping, for wharfage, pilotage, navigation, port improvement, 
warehousing, sanitary inspection, and the like. A statistical duty is 
generally collected in the colonies. These fees are generalljr but not 
always free from discriminatory features. At Saigon, for instance, 

29 The veto of the Counci] of State, like the governor's veto on appropriations in some of the states of the 
United States, extends to the items proposed; and apparently to any separable part of the proposed 
system. The rate of a rax may be reduced or its duration limited. Indeed, in the case of the West African 
tariff of 1905, when tne droit d'importation and the "surtaxes," or customs duties, were promulgated by 
the same decree, the Council of State considered the whole scheme of imposts de novo "on the principle ol 
attachment to the body of most extensive authority." See an article by Pierre Ma, in Questions Diplo- 
matiques et Coloniales, vol. 21, p. 611. 

20 Dislere, P.: Traits de Legislation Coioniale, 1906-7, Vol. I, pp. 826-829; 1st Sup., pp. 52, 56; 2d Sup., 
p. 58; 4th Sup,, pp. 28, 82, 87. Pailain, G.: Les Douanes Franeaises, 1913, pp. 219, 232-233. Arnauo6: 
Op. cit., p. 409. 



150 COLONIAL TARIFF POLICIES. 

Frencli vessels receive a reduction of 60 per cent in the tonnage and 
pilotage fees. 

There are in France certain consumption taxes which, paid on do- 
mestic products, are likewise levied upon colonial as well as foreign 
products imported into the mother country. These falljon alcoholic 
beverages, compounds with an alcoholic content or basis, sugars, 
certain sugar compounds, salt, dynamite, candles, automatic lighters, 
and bicycles and motorcycles. Wines up to 15° and the lighter 
drinks pay a droit de circulation whose rate is 1.50 francs and 80 
centimes, respectively, per hectoliter; but the stronger wines and 
distilled spirits pay a droit de consommation whose rate before the 
war was 220 francs per hectoliter of pure alcohol. The interior tax 
on sugar is offset by a like duty in the tariff schedules, and that part 
of the duty which falls only on foreign sugars is accordingly called a 
surtax, but there is also in addition to the duties mentioned in the 
tariff schedule a refining tax of 2 francs per 100 kilograms, paid by 
refined sugar of all origins and collected by the customs. All these 
taxes on alcohol and sugar are collected also on molasses, sirups, etc., 
and on varnish, certain soaps, tannic acid, etc. — in general on all 
chemical and medicinal compounds with an alcoholic basis. Salt 
pays 10 francs per 100 kilograms. The French duties on candles, 
lighters, and cycles are not likely to affect the colonies, ^^ since France 
does not import these goods from those sources. 

Export duties. — The law of 1892 contains no mention of export 
duties, but such duties have existed in some of the colonies and were 
formerly more important in the fiscal system than they are now. 

Minimum rates and direct transportation. — The colonial trade gener- 
ally was thrown open to ships of every nationality by laws of 1861 and 
1866, but the law of May 16, 1863, provided that ^'reductions of duties 
established by reason of the places of origin or production are ap- 
plicable only when it is certified that the merchandise has been im- 
ported directly ^^ from the country of origin or of production designated 
by the law. ^' This rule tends strongly to excfude from the French 
colonial trade all vessels which do not confine themselves to that 
trade. ^^ 

The requirement of direct importation is not special to the colonial 
trade, but is part of a general policy. The minimum tariff is con- 
ceded regularly with the restriction that the goods enjoying it shall 
be imported directly or through a country entitled to the same rates. 
Tables D and C of the tariff contain surtaxes applicable respectively 
to most non-European goods imported through a European country 
and to certain goods which originate in one European country and 
are imported via a port of another, i. e,, discharged in a European 
port and thence reshipped. 

31 Pallaia: Op, cit., Vol. I, p. 220; Vol. II, pp. 230, 680-703. The text describes the prewar system and 
rates. 

«2 "Directly" here means without calls at any hut French ports; but this definition has been relaxed to 
allow calls at other ports, subject to certain conditions, sucn as rhat no goods similar to those entitled to 
favored-nation treatment be taken on board. The companies operating regular lines are not, however, 
held strictly to thi"^ latter rule, nor even to tnat forbidding transshipment of the goods to be imported. See 
Pallain: Op. cit., Vol. I, pp. 65-69. See also Direction Gen^rale de Douanes: Tarif des Douanes de France, 
Observations Pr^liminaires, 1908, Nos. 56-59. 

33 See pp. 182, 185, 188, 202, and 223 for war time and other exceptions to the rules for direct trans- 

gortation and use of French vessels. The relaxation of the rule in the trade with Indo-China ended 
'ct. 15, 1920. It may be noted that products of the Philippines are not entitled to the French minimum 
tariff, and those products of the United States which are so entitled forfeit the right if they are transshipped 
in Manila for Indo-China. 



FEANCE, 151 

The ^'reduction of duties established by reason of the places of 
origin or production" became increasingly important as the assimi- 
lated colonies became more numerous and as the preferences of the 
colonial tariff system, increased. These reductions of duties include 
in their effect': (1) All the products of the assimilated colonies except 
such raw materials as are admitted to France free even under the 
general tariff; (2) such products of the nonassimilated colonies as are 
admitted at rates lower than the present minimum tariff; and (3) the 
French goods admitted free in the assimilated and special regime 
colonies in so far as duties are levied on similar foreign goods. The 
rule of direct transportation does not apply ^^ to products which are 
in any case free according to the general tariff or which are imported 
from the nonassimilated colonies and on which there is in the tariff 
schedules only a single rate of duty; nor does it apply to French 
goods carried to the open-door colonies. Similarly the rule that 
French ships must be used in bringing imports from Tunis ^^ does not 
apply to the goods which are admitted free or at a single rate of duty 
regardless of origin. 

The trade between France and Algeria was restricted to French 
ships by a law of April 2, 1889, but this may be regarded as an exten- 
sion of much older laws reserving the coasting trade of France to 
French vessels. 

MODIFICATIONS OF THE SYSTEM SINCE 1892. 

Changes in classification. — It was expected in 1892 that all the colo- 
nies would be assimilated eventually,^*^ but only two such changes 
have been made since that date, the Comoro Islands in 1896 and 
Madagascar in 1897. The Comoro Islands have since been annexed 
to Madagascar. Tunis has been given a tariff the provisions of which 
bring the protectorate practically within the assimilated group, but 
has never been declared assimilated. The only other change has 
been in the opposite direction— the colony of St. Pierre and Miquelon 
has been disassimilated and given a special tariff,^' 

Changes in procedure of tariff mahing. — When the French tariff 
law was revised in 1910 there was inserted a special provision against 
the automatic incorporation of the new French rates in the colonial 
tariffs, but the object of the law was not to force the creation of 
separate colonial tariffs, but to compel special (revisorj/) considera- 
tion of the colonial rates. There was in 1910 no general reconsidera- 
tion of the colonial rates, and there was no revision of the colonial 
duties on articles on which the French rates had not been changed. 
The decrees of June 30, 1911, which finally applied the law to the 
colonies, made a few exceptions from the new rates, exceptions which 
have been described as ^'insignificant ameliorations in the revised 
tariff."38 

Certain changes have been made in the method of formulating the 
executive decrees which fix special tariff rates in the assimilated 

34 It does not apply because the law provides no reduction of duty and the tariff provides no penalty in 
the form of higher rates, but in some instances there is a surtax for indirect importation. See Table C oi 
the tariff, 

35 The Tunisian decree of 1898 extending special rates or exemption from duty to many French products 
stipulated direct transportation. 

36 Girault: Op. cit.,p. 95; Pallain: Op. cit., Vol. I, p. 217. 

37 Law of Nov. 11, 1912; decree of Apr. 23, 1914. 

38 Girault: Op. cit., pp. 98-101. See also Augier and Marvaud: Op. cit., p. 390. 



152 COLOI^IAL TAEIFF POLICIESo 

colonies^ and in the method of comirmmg the consumption duties in 
all of the colonies. Articles 3 and 6 of the law of 1892 provided that 
decrees for these two purposes shoiild be made on the report of the 
minister of commerce, industry, and the colonies. When the colonies 
were given a separate ministry (1894), this function deF;olved on it, 
though it was necessary to consult in advance the ministers of com- 
merce and mdustry. This left the minister of the colonies, on whom 
the final responsibility rested, in a position to ^ 'brush aside the oppo- 
sition of his colleagues and even the conclusions of the CounciF of 
State." 

Later legislation has differentiated the making of these decrees. 
The ta^riff revision law of 1910 specifies that the decrees which fix 
special colonial tariff rates shall be made on the proposal of the 
ministers of com_merce, of finance, and of the colonies. From this it 
follows that, ^^an agreement must be reached by the three adminis- 
trations concerned. If this understanding is not effected there can 
be no action; accordingly it follows that each of the three ministers 
enjoys practically a veto upon the dem^ands of the colonies. The 
granting of special rates has thus become more difficult and the 
procedure of the initiation of such rates has become much slower, "^^ 
On the other hand, by the law of April 13, 1900, decrees to confirm the 
levying of consumiption duties in the colonies were to be issued by the 
Council of State, but no minister in particular was named. This law 
also took from the colonial governor the power of enforcing these 
duties provisionally before their approval by the Council of State. 
Under this procedure, resolutions of the colonial councils have 
frequently been refused confirmation, either as to the articles proposed 
for taxation or as to the rate or duration of the tax. In 1916, however^ 
the power of the colonial minister in respect of these decrees was 
restored and increased. The councils general of the colonies deter- 
mine the method of levying and the rules of collection of the taxes 
and imposts other than customs duties, but these do not become 
operative until they have been approved by the Council of State. 
The rates, however, come into force automatically after a certain 
delay, and unless the Council of State at the instance of the minister 
of the colonies has disapproved them, and the minister may expedite 
the process of their going into operation by renouncing his right of 
requiring that they go before the Council of State for consideration. 
Thus if the minister approves of the rates, the Council is not given 
an opportunity to disapprove of them; but if the minister disapproves, 
the Council may approve and the rates go into effect. In a word, 
they go into effect with the approval either of the minister or of the 
Council. 

These changes do not affect the manner of making the other decrees 
found in the colonial system, namely, those which grant special 
exemptions from the French tariff to products of the nonassimilated 
colonies, and the simple decrees Vv^hich fix the quantities admitted at 
such exemptions. However, the sphere in which decrees operate has 
been extended somewhat. The law of 1900 empov/ered the Council 
of State to determine the customs rates to be applied in France or in 
the colonies to products of the New Hebrides grown or manufactured 

^ Girault: Op. cit.,p. 102, quoting M. Gervais. See also Pallain: Op.cit., Vol.I,p.226,andLaQuiiizaine 
Coloniale, vol. 15, p. 441. 



FRANCE. 153 

by French colonists. This power has been applied in the same way 
as that conferred by the law of 1892 in regard to products of the 
nonassimilated colonies entering France. The Council of State 
determines what products shall be so admitted, what the rates shall 
be, and whether the quantity so admitted shall be limited or unlimited. 
If the quantity is limited, as it usually is, the Council specifies in 
each case that the amount to be admitted each year shall be fixed 
annually by simple decree on the advice of certain ministers desig- 
nated. These ministers are usually those of finance and of the 
colonies; and they are usually required to act on the basis of official 
statistics furnished by colonial governors^*^ or after taking the advice 
of the ministers of commerce and agriculture. Doubtless the Council 
might keep in its own hands the determination of these amounts 
annually J or it might fix the amount for a number of years in advance. 

Simple decrees issued in accordance with a law of 1909 fix for three 
years at a time the quantities of Indo-Chinese pepper to be admitted 
annually at the rate fixed in Table E of the tariff, A law of 1904, 
however, set a definite limit to the amounts of yarn and longcloth 
of French India which were to enter the other colonies free each year. 

Changes in treatment of intercolonial tirade, — The rule of freedom of 
intercolonial trade has been modified since 1892 by the establishing 
of one exception. Owing to the difficulty of estabhshing the origin 
of the goods, the products of French India, other than limited quan- 
tities of longcloth and yarn, have been required, beginning in 1904, 
to pay the minimum duties when entering the assimilated colonies 
and to pay whatever duties are found there when entering the non- 
assimilated colonies. In France such longcloth continues to enter 
free, by specific provision of the law of 1892. 

The freedom of trade within the Empire was further restricted by 
a redefinition. The law of 1892, in providing that intercolonial 
trade should be free, failed to specify whether Algeria was a ^^ colony " 
within the meanuig of the clause. The council of state took the 
position that it was a colony, and that trade between Algeria and the 
colonies should be free. The tariff law of April 8, 1900, reversed this, 
but with the provision in general that colonial products should enter 
Algeria on terms the same as those on whicn they enter France. 
This made no change as regards those products of the assimilated 
colonies which enter France free, but it established the requirement 
that the products specified in Table E pay the duties there listed, and 
that products from nonassimilated colonies pay the minimum 
duties.** 

Changes in rates and preferences. — Numerous changes have been 
made in the rates and preferences established in the general tariff 
law of 1892. Of these changes, two especially should be noted. In 
the first place, a number of products of assimilated colonies which 
were denied free entry into France under the law of 1892 have since 
been accorded this favor, and, secondly, the increase in the French 
tariff under the law of 1910 has added to the preference given both to 
the assimilated and to the nonassimilated colonies. Changes in co- 
lonial export duties have likewise affected colonial preferences. 

^0 Or corresponding officials. 
. *i No legislation was required regarding exports from Algeria to the colonies, for Algerian products would 
enter the assimilated and the special regime colonies free of customs duty whether Algeria were classed as 
a colonj/- or as part of France; while similarly, in either case, Algerian products entering the open-door 
colonies would pay the charges levied on goods of all origins. 



154 COLONIAL TARIFF POLICIES. 

The law of 1892 contained important exceptions to the rule that 
products of the assimilated colonies should enter France free. These 
exceptions were listed in Table E annexed to the tariff law. Accord- 
ing to this table, sugar and sugared products were to pay the rates 
of the metropolitan tariff;*^ and the other articles specified were to pay 
one-half of the rates of that tariff. These other articles were tea, 
coffee, cocoa, chocolate, pepper, vanilla, allspice, cloves, nutmeg, 
mace, cassia lignea, amomums, and cardamoms. This list obviously 
includes some of the most important colonial exports; but it was felt 
to be fiscally impossible to sweep away these duties, and it was 
necessary to maintain upon colonial sugar the same burdens as were 
borne by the domestic product. Further favors granted to colonial 
sugars, except the rebate to cover freight charges, had to be reduced 
after the Brussels sugar convention of 1902.*^ On the other articles 
on the list the preferences were maintained^* until January 1, 1914, 
when free entry was accorded to all these colonial exports except 
sugar, sugared products, and pepper,*^ The increase in the "surtax'' 
on sugar, effective from June 10, 1920, has increased the differential 
in favor of colonial sugars to 14 francs per 100 kilograms. 

The law of 1910 increased the French tariff, and therefore increased 
the advantage of the French producer in the market of the assimilated 
colonies. It equally increased the advantage of producers of the 
assimilated colonies in the French market, in so far as the rates were 
increased on goods which they exported. To the same extent, for 
the first time, a general advantage was accorded by law to the non- 
assimilated colonies generally. Their products continue to pay the 
minimum tariff, but until a decree shall have been issued to the 
contrary, it is the old minimum rates that they pay and not the 
increases under the law of 1910. Meanwhile they benefit by any 
decreases made by this law; and the decree to impose on their prod- 
ucts the increased rates has not been issued. The preferences accorded 
to the colonies in the French markets have thus tended to increase, 
but slowly. 

In the special tariffs of the assimilated colonies, while various 
articles have been added to the free list, the general tendency of the 
customs duties has been toward increases; but the same is true of the 
consumption duties, where the increases are usually, if not always, 
due to increased fiscal demands. There have been some further 
export duties imposed, but striking decreases have been made in 
Tunis, Indo-China, Madagascar, and Equatorial and West Africa. 
Export duties are still levied, however, in all the colonies except 
French India and St. Pierre and Miquelon, and they usually fall on 
the most important products. 

Changes since 1914: The French legislature authorized the execu- 
tive during the War to prohibit the importation of foreign mer- 
chandise or to increase import duties.*^ During the period of hosti- 
lities trade was controlled chiefly through prohibitions upon importa- 
tions and exportations except as the trade was licensed. Most, if 

<2 But not the "surtax." 

*3 In accordance with the provision of that convention that no protection or preferences on sugars should 
exceed 6 francs per 100 kilograms for refined sugar or 5 francs 50 centimes for other sugars. A duty at these 
rates was imposed on all foreign sugars, but was designated a surtax. See p. 168. 

4^ But the rate on coffee was reduced in 1900 and the rate on pepper raised in 1903. 

« Law of Aug. 5, 191.3. 

« Law of May 6, 1916, extended to Jan. 1, 1921 by law oi April 30, 1920, 



FRANCE. 155 

not all, of the Frencli lists of prohibited articles applied also to Al- 
geria. Similar or identical lists were proclaimed in Tunis and in the 
colonies proper. It may be noted that the law did not authorize 
the prohibition of the importation of products of the French colonies 
and the trade between France and the colonies and the intercolonial 
trade suffered few restrictions. The colonies provided chiefly raw ma- 
terials^.^ and it was the policy of France not to hinder their develop- 
ment more than was absolutely necessary. Throughout the war the 
development of the French zone in Morocco was vigorously continued. 
In the reconstruction period the embargoes upon exports have been 
continued and even extended. Thus the decree of October 14, 1919, 
prohibited the exportation from the French colonies*^ to destinations 
other than France or French colonies of those articles *^ whose ex- 
portation from France had been prohibited by decrees of July 12 
and August 28.^^ 

In the reconstruction period, France has relied upon im^port duties 
somevv^hat more than upon prohibitions for the restriction of imports. 
The prohibitions were generally removed in June and July, 1919,^^ 
when increased duties had already been announced. These increases 
took the form at first of ad valorem surtaxes, the highest rates being 
under the minimum tariff, 20 percent, and under the general tariff, 40 
per cent ad valorem. This system was found unsatisfactory, par- 
ticularly as the customs authorities were unaccustomed to dealing 
with ad valorem duties, and in July, 1919,^^ the ad valorem surtaxes 
were abolished and in their place a system of ^'coefficients of increase '^ 
was introduced. The coefficients varied from 1.1 to 3, and by multi- 
plying the old specific rates of the French schedules by these coeffi- 
cients new specific duties were obtained corresponding to new price 
levels. Under this law increases of duty were limited to 200 per 
cent. Neither the ad valorem surtaxes nor coeffilcients of increase 
were applied to the first two hundred items as numbered in the 
French schedules — animals and animal products, vegetable products, 
and crude mineral substances — with the exception of wool and slate.^ 
As the trade balance continued heavily against France, in April, 1920, 
prohibitions of importations were restored upon about 175 articles of 
luxury and when this list was largely repealed in July ^^ new duties 
were proclaimed for many articles, imposed by the use of coefficients 
which ran as high as 7.1, and even larger ones have since appeared. ^^ 

*^ According to a statement oithe minister of the colonies, the colonies provided 1,600,000 tons of materials 
available for war purposes. 

«8 The French decree did not include Tunis, Morocco, and the New Hebrides, which are not subject to the 
colonial ministry, but the measures taken by the French Government for the control of the trade have 
been regularly and faithfully reflected in those of the Protectorate of Tunis, and this has been almost 
equally true of Morocco. 

*9 Except beet root. 

BO Boardof Trade Journal, Nov. 13, 1919,p,605. The list included oleaginous seeds and nuts and vegetable 
oils, and the measure has been cited as a reply to the differential dut j^ on palm kernels exported from British 
West Africa; but the decree of Feb. 1, 1921, left practically nothing on the list except sugar and precious 
metals. 

61 Decrees of June 13 and July 7. 

52 Decree of July 8, 1919 ratified by law of Jan. 9, 1920. The ad valorem surtaxes had been imposed by 
decree of June 14 and became effective June 20. Ad valorem duties have been exceptional in the French 
tariff, but even since the abolition of these surtaxes further ad valorem duties have been imposed in cer- 
tain instances. For instance the decree of Aug. 20, 1920, imposed 35 per cent ad valorem on pianos, organs 
and mechanicalplayersand 25 per cent on phonographs and their records (Commerce Reports, Sept. 8, 1920.) 

53 Commerce Reports, Aug. 4, 1919, p. 708. 

54 Decree of July 22. The prohibition remained upon about 20 articles. Commerce Reports, Aug. 12, 1920. 

55 In the year July , 1919 ,to July , 1920, there had been many increases of rates which need not be mentioned 
separately. The chemical schedule was revised by law of Nov. 7, 1919, and numerous decrees increased 
various rates by increasing the coefficients, e. g., Mar. 27 and Apr. 12, 14, and 21 , 1920. A few items were 
given lower coefficients from time to time, but the general tendency was decidedly toward the increase of 
the coefficients to the maximum of 3. Decrees increasing the coefficients have continued to appear— e. g., 
the coefficient 10 appears half a dozen times in the decree of June 29, 1921. (B. T. J., July 14.) 

185766°— 22 11 



156 COLONIAL TAPJFP POLICIES. 

A decree of March. 2S, 1921. made sweeping increases in the rat^ 
of the French general (maxiDium^ tariff. While the maxiniuna rates 
had previouslj in no case exceeded the mininnim rates hj more than 
100 per cent, now many of them are greater by 300 per cent. These 
increases affect practically the whole of the French tariff schedules 
after the first 109 it ems. -^•'' 

Throughout the period of rapid readjustments of tariff rates in 
France^ the new rates have been made effective in the assimilated 
colonies in only a few cases 8Jid with considerable delay. Algeria is 
practically always included in the tariff laws or decrees of France, but 
the only other c-oionies to which. up_ to October, 1921. the new rates 
appear to have been made applicable are Indo-China, Madagascar, 
Tunis, and Guadeloupe. In Madagascar the coefficients of increase c^ 
Jnly S and the chemical schedule of 2n ovember 7. 1919. the coefficients 
of January 10 and February 3. 1920, and the maximimi rates decreed 
on March 2S. 1921, have been put in force. ^' In Indo-China the sys- 
tem, of coefficients was introduced by decree of Janu^ay 13. 1920. iid 
a decree c^f July 17, 1920, made effective the modiiications and exten- 
sions contained in eight ± rench decrees beginuj'ng with that of Jan.uary 
10 and ending with that of April 22. 1920."^ In Guadeloupe from 
October 1, 1920. imports were held liable to the payment of duty as 
increased by the French coefficients, except for the articles listed in. 
the colony's special tariff. In Tunis the new maximum rates were de- 
creed in June. 1921. 

FSESEXT SYSTEM (SFJIiULRY . 

The diagram on page 157 presents the French colonial tariff system 
in its general outlines, with the enumeration of the colonies fa llin g 
into each tariff class. Most of the statements on the diagram are 
subject to exceptions, as may be seen from the more extended dis- 
cussions in the text: of the report or even from the summary c%)n- 
tained in the next two pages. The reader who is interested in the 
general t^iriff pohcy rather than in the details of its application in 
single colonies or groups of colonies will mid that the subject- has 
been treated in Part iXE, of which the lollo^wing paragraphs are a 
brief summary. The reader who is interested in the treaty system 
of Morocco, the rates of the consumption duties in French Guiana, 
the transfer of St. Pierre and ^Vliqueion from the class of assimilated 
to that of nonassimilated colonies, or other matters relating primarily 
to individual colonies, will ffiid the details in Part TV of Chapter HI. 

The fdllowing diagram summarizes roughly the French colonial 
tariff system: 

5^ B. I. d. P.. ISth. Sup, to Xo. 22 (oxh. ed.). pp. 4 to SO. i^:". Tir "l- sTJirir-lr- in —jnci TiLs de- 
cree made no efaaag^ aie I. m, VI. and YIH — Jive ani-Zi^l^ . isl. ldr:rji.c-yis ;::i5. azii ec^c r^ al 

praekLi~Ti ::ir ir-::::^';:::::- :i-lr -r-n:n iTfTTT :i }j:ar. 2S._ _ 



in th- -:i_l :;■ iri; : : :': ::n 1- : 1" : : : , . :;:i _ r iepreeianon : t^ :: .; . • j\ -. zhL^ asximBXe 

the duTT =v,:^ gTc-:-: 



FRANCE. 



157 













o 


£ 




























c3 












i 


■§ 












o 














O 












© 


® 










■ 


rd 


5 +» 










« 














§ 


i 


.g o s 










1 


o 


•^ <N >> "1, ' 1 














<I> '-' S- lO 1 












!>5 


o 03 o 00 ! 










1 


6 c3 

oiS 

a >, 


France re 

80, 1906, 1 

nd the Iv 

ia. 
Africa, 18 

ies, 1906. 










O 


o;2 






. 






s® 


OK S'^=*'2':3 'C 






1 


aj 




:S.9 


wo 0^30)"^^ !W 




1 


1 


1 




owdi 
eiern 
State 

xport 
ducti 

:orocc 

3mali] 
ahom 

rench 

quato 

ewH 






o 


o 






'S 


1 




^fi 


K S mft PhH ^ 




s 






0) 


«j - ^ o 


' 


ll 


1 


[3 










i| 




§ 




>! 


rt 1^ 




§■ 


M 






^ ^^ 






^ 


0! 

s 


ra 


1 


1 !i 




d o 




o 


® 




-^ m c3 


i 

1 


go 




02 

1 


1 

1 
1 


1 


•ance except t 

-S. 

ce except tho; 
i minimum r 

iquelon. 


< 


11 




i 

a 


3 
1 


^O 
-4^ ^ 


from Ft 
1 free list 
to Fran 
neral an* 

rica. 
•e and M 




;toms dut^ 

ption duti 
ted locally 




1 




;2o 


Imports 
genera 

Exports 
the ge 
same. 

West Af 

Oceania, 
St. Fieri 














•5 fl.S 








1 


a 




S §S 








'§ 




;nter f r 

ay the 
chedul 










a. 




s 






D, 








g 


1 




t 


w 






i 


+2 

t 

1 

"S 




.>o 

•So 

|| 






French products. 
French colonial pro^ 
French products. 
French colonial pro^ 
Foreign products. 
Nondiscriminatory. 


1 




All trade in both d 
cles on general fre 

Algeria, most closel 
Indo-China, 1887. 
Tunis, partially, 181 

Madagascar, 1897. 
Reunion, 1892. 
Martinique, 1892. 
Guadaloupe, 1892. 

New Caledonia, 189 
Guiana, 1892. 
Gaboon, 1892. 














. . ^ — . 














o2 












w 


0--H 












8 


^■^ 

^s 












a 


&r 1 












o 


i. s'-i^ i 












o 


c o a o 












1 


nreqiii 

ommer 
milatio 
pen do 












ce 




. 








o 














o o •- < o 




•B 




g 




1 


^ oi^ 




a 




§ 




C3 


-(J t- +J 




S -^ ^ 






.1 


t transpor 

ies in orde 
h. date of 
ranteeing 




ms duti 

imption 
rt dutie 




5 

M 

b 








5 m ° 




o 










1 i s- 




ft 
1*1 




to 

3 


1 I'^S 




O O K 




W 




O 


« o 



158 COLONIAL TARIFF POLICIES. 

The French colonies are divided by law into two classes, assimilated 
and nonassimilated ; and according to tariff practice into three 
classes, assimilated, open-door, and special regime colonies. 

The assimilated colonies are French Indo-China, Madagascar, 
Gaboon, Reunion, Guiana, New Caledonia, Guadeloupe, and Mar- 
tinique. Algeria, even more closely assimilated than the regions 
just mentioned, is not a colony. The Protectorate of Tunis is not 
by law an assimilated colony but the rates of its tariff are such that 
it falls in tariff classification there rather than among the special 
regime colonies. The assimilated colonies have the same tariff on 
foreign goods as has France, except for reductions decreed by the 
French Council of State, and they have free trade with France 
except that their sugar and pepper pa,y special rates lower than 
those on any similar foreign product. 

The open-door colonies are Morocco, Equatorial Africa (with the 
exception of part of Gaboon), Dahomey, and the Ivory- Coast — in 
which limited duties, not always called customs duties, are col- 
lected and the open door is guaranteed by treaty; and Somaliland, 
Kwangchow Wan (the French leased territory in China) and the French 
establishments in India. In these open-door colonies there are very 
low rates with the absence of duties in many cases and there is no 
discrimination against foreign trade. The Anglo-French Con- 
dominium of th^ New Hebrides also has a limited tariff containing 
no discriminations. 

The special regime colonies are French Oceania, West Africa, 
excluding Dahomey and the Ivory Coast, and St. Pierre and Miquelon. 
They have tariffs decreed for them individually by the Council of 
State. The rates are lower than the French rates and fall only on 
foreign goods. 

The products both of the open-door and of the special-regime 
colonies pay when entering France the rates of the minimum tariff.^® 

The tariffs of the assimilated colonies are made by the French 
legislature in the enacting of the national tariff. ^^ The tariffs of the 
nonassimilated colonies are decreed by the Council of State, which 
also determines special reductions or exemptions for the goods of 
those colonies on entering France. 

Intercolonial trade is free, except that upon products of French 
India imported into other colonies the payment of duties is required, 
except upon limited quantities of longcloth and yarn. 

In Equatorial Africa, Dahomey, and the Ivory Coast, previous to 
1911, the only duty imposed was called the droit d'importation and 
this was levied on goods of all origins alike. Since 1911 in Equa- 
torial Africa, and for a much longer period in all the other colonies, 
there have been additional charges on importation called octrois 
de mer and droits de consommation. These also are levied on 
goods of all origins. 

With the exceptions of French India, and St. Pierre and Miquelon, 
all the colonies have also export duties ; and these duties are collected 
alike on goods for all destinations — except in Indo-China, where 
most products bound for France are exempted. 

6S With the exceptions that the increases of 1910 have not been put into effect in reference to them and 
that one or more of their products in most cases have been granted special reductions or exemptions, in 
limited quantities at least, in the French market. 

60 But changes in schedules enacted in the French tariS law do not apply in the assimilated colonies 
until a special decree has been issued to that effect. 



FRANCE. 159 

Carriage in French ships is required for the trade between Algeria 
and France and for practically all the imports from Tunis. ®^ All other 
goods are entitled to preferential treatment in France or in Tunis or the 
other colonies only if carried "directly" from their places of origin. 

TJie differential features. — Preferences in the colonies: In the 
assimilated colonies, which include most of those which are important, 
the high protective tariff of France is applied with some reductions, 
relativelj^ few, decreed by the French Council of State. These cus- 
toms duties are discriminatory to the full extent of their amount, as 
they are levied in full on foreign products and are not levied at all on 
French and French colonial products. 

In the special regime colonies the percentage of discrimination in 
favor of French goods is equally great, but the absolute amount of 
discrimination is less, since the rates of the special (individual) 
tariffs are lower than those of the French tariff. However, this 100 
per cent discrimination applies only to the customs duties, and in all 
of these colonies there are levied additional duties which fall equally 
on a longer or shorter list of goods regardless of origin, so that many 
French products pay imposts which are often considerable. To 
generalize roughl}/^, these charges on French goods amount •usually 
to less than one-half of the total charges levied on foreign goods, i. e., 
the octroi de mer and other consumption duties are generally less 
in amount than are the customs duties. 

In the open-door colonies there are no tariff discriminations. The 
trade of these colonies in the period 1909-1913 was 15.75 per cent 
of the total colonial trade, excluding that of Algeria. 

With one exception, the comparatively important export duties of 
Indo-China are not levied on exports to France. The special advan- 
tages which France enjoys in the assimilated and special regime colo- 
nies are enjoyed equally dj all the French colonies except French India. 

Preferences in France: In the French market the assimilated colo- 
nies enjoy a preference of the full amount of the tariff, except that 
on sugars and peppers the preferences are less, about one-fifth on the 
former and one-third on the latter. These preferences to the colonies 
are the more important because ^^a great number of rates in that 
[the French] tariff are fixed solely for the benefit of the colonies." ^^ 
The open-door and special regime colonies receive a preference in the 
French market on sugars,^^ and some of their products receive reduc- 
tions or exemptions.^^ The increases of the minimum tariff rates, 
enacted in 1910, have not yet been applied to the products of these 
colonies. Colonial exports are exempt from the sales tax of 1920. 

Preferences to French shipping: As to navigation, French ships 
must be used in all trade between France and Algeria, The same 
rule also applies to goods imported from Tunis and enjoying tariff 
favors in France. In all other cases preferential treatment is made 
conditional, in France and in the colonies, on direct transportation. 
The direct transportation may be in French or on foreign ships. 
'^Direct" is not in all cases construed strictly, and during the war 
preferences to French shipping were relaxed or suspended. 

Doubtless other factors contribute, but that these restrictions are 
not without effect is strongly evidenced by the figures presented in 

61 But not including some of importance. See p. 71. 

62 Augier and Marvaud: Op. cit., p. 393. 
68 By law. 

64 By decree. See p. 195. 



160 COLONIAL TARIFF POLICIES. 

tlie Tableau General du Commerce et de la Navigation published by 
the French customs administration. 

First of all, foreign vessels are wholly excluded fromi the Algerian 
trade with France. In 1913 tliis trade amounted to 9,300,000 metric 
quintals from France to Algeria and almost 11,000,000 quintals in 
the opposite direction. The trade between France and all other 
colonies except Morocco was 27,750,000 quintals, so that this law 
deprived foreign vessels of all chance to compete in a trade which is 
almost four -ninths ^^ of the total colonial trade with France as meas- 
ured by weight. 

Secondly, French vessels carried (in 1913) from France to the col-^ 
onies, including Tunis but not Algeria or Morocco, 6,700,000 quin- 
tals as compared with 460,000 carried in foreign vessels. As foreign 
vessels carried only 6.42 per cent of the total it appears without fur- 
ther analysis that they were not greatly benefited by the fact that 
the lule of direct importation did not apply to all the goods carried. 

Thirdly, French vessels brought in 1913 from the French colonies, 
again excluding Algeria and Morocco, 10,110,000 quintals, while 
foreign vessels brought 8,423,000. These figures in the gross show 
that foreign ships had nearly one-half of this invv^ard carrying trade, 
in spite of the French restriction. But it must be remembered that 
the restriction regarding direct importation does not apply to all tlie 
goods brought from the colonies. It applies only to goods which 
claim the benefit of reduced tariff rates. A product of an assimilated 
colony can receive no favor when similar products from other places 
enter free. A product of a nonassimilated colony entering France at 
the minimum rate can receive no favor if the tariff provides only that 
one rate for that product of no matter what origin. Such goods, 
therefore, may stop at any and all ports and still enter free or at the 
minimum, duty as the case may be. The so-called warehousing sur- 
taxes of Table D of the French tariff apply to these products only if 
they have been discharged in a European port. 

Scrutiny of the returns of the imports brought in 1913 by foreign 
vessels from the colonies to France, discloses that five-sevenths of 
the total 8,423,000 quintals consisted of articles to which the rule of 
direct transportation does not apply; and that foreign vessels were 
practically excluded from transpoi ting to France colonial products to 
which the rule do^ apply, with the exception of rice and cereals from 
Indo-China and' sugar from Martinique and Guadeloupe. The ta- 
bles do not show whether in these cases the foreign vessels made the 
transportation direct or whether the additional duty was paid; nor 
do they show whether the importation in foreign vessels of stones 
and earths from Tunis, an item that accounts for nearly one-half the 
weight imported in foreign vessels, was indirect; i. e., whether the 
rule of direct transportation if applied to these articles would in any 
degree affect adversely the carrying trade of foreign vessels. The 
tables do show, however, that the 18,533,000 quintals of total imports 
to France from the colonies, excluding Algeria and Morocco, may be 
divided into three large classes. The first consists of articles to which 
the rule of direct transportation does not apply, and it includes more 
than one-half by weight of the total importation. In this class-^ 
taking indeed only the larger items — foreign vessels brought 5,830,000 

65 But, of course, this fraction would be greatly reduced if the figures for ton-miles could be used, and 
even that reduction would not represent accurately the relative profit in carrying the trade. 



FRANCE. 



161 



quintals while French vessels brought 4,185,000, making a proportion 
of four to three in favor of the foreign vessels. 

The second class, including one-fifth of the total, is made up of the 
few items to which the rule applies but where foreign vessels have 
shown themselves able to compete — rice and cereals from Indo- 
China, and sugar from the Antilles. Of this trade, the foreign vessels 
carried 2,393,000 quintals, while French ships brought 1,512,000 quin- 
tals, a proportion of three to two, again in favor of the foreign ships. 

The third class comprises the rest of the trade — mainly trade to 
which the rule aj^plies, but including minor items which on closer 
analysis might go into class 1 and further items which lose their iden- 
tity in the tables under the heading '^all other articles," It will be 
observed that the trade of many of the colonies falls wholly in this 
class. In it the foreign vessels share to the extent of 200,000 quin- 
tals, while French vessels carry the bulk, 4,413,000 quintals. For- 
eign vessels carry 4.5 per cent of this trade. 

To conclude, in classes 1 and 2, where the foreign vessels can 
compete, they have 59 per cent of the carrying trade. In the third 
class, to which may be added the whole of the export trade to the 
colonies, their share is not much over 5 per cent. 

Table 3 gives the figures upon which these conclusions are based. 
The line drawn below the item raw hides from Indo-China indicates 
the end of class I, The totals to that point in the columns '^selected 
products'' are 5,830,000 and 4,185,000; the four remaining items in 
those columns form class II and total 2,393,000 and 1,512,000. 



Table 3. — Imports by weight of colonial products into France 

vessels, 1913} 


in French and foreign 




Thousands of metric quintals Imported into France in 1913 . 


Colonies of origin— selected 


Rate of French tariff per 100 

kilograms. 


In foreign vessels. 


In French vessels. 


products. 


Total of 
all prod- 
ucts. 


Selected 
prod- 
ucts. 


Total of 
all prod- 
ucts. 


Selected 
prod- 
ucts. 


Tunis 




3,829 




4,946 






Mostly free 


3,792 
35 


3,263 
15 


arts and trades. 


Free 






Senegal . . . 




1, 065 


758 




Oily seeds and fruits 

West and Central Africa, ex- 




1,063 


711 




79 


475 




cluding Senegal. 

Oily seeds and fruits 

Exotic woods. 


Free or with a single rate of duty 


23 
9 


37 


Mostly free. 






79 


French India , . . 




889 


22 




Oily seeds and fruits. ...... 


Free or with a single rate of duty 


886 
3 


7 


Free.. 








Indo-Chlna 




2,027 


1.582 




Oily seeds and fruits 

Exotic woods 




10 

5 

! 


40 


Mostly free 






10 










5 


Rawhides 


Free 







13 


Rice 


3,6,8 francs 




^11? 




816 


Cereals, flours and malt 


3 to 7 francs 






432 


Martinique 




193 


402 




Sugar 


Refined, 6 francs; other, 5.50 (sur- 
tax). 


187 


193 


Guadeloupe 


294 


190 




Sugar 


Refined, 6 francs; other, 5.50 (sur- 
tax). 


203 


03 










Total selected products 




8,223 
153 




5,697 


All other products 






2,678 


Total selected colonies. . . 




8,370 

47 


8,376 


8,375 
1,735 


8,375 










■ 






Total, by nationality of 
vessels. 


8,423 




10,110 









Excluding Algeria and Morocco. 



162 COLONIAL TARIFF POLICIES. 

IV. — Tariffs of the Colonies, in Geoups and Individually. 

_ [Those not vcishlng to follow the detailed discussic-n of French tariff policy as applied in the separate 
j-rench colonies should pass over pp. 162-223, inclusive. They were prepared for detailed studv, not for 
the general reader. But see summaries on pages 168, 1S3, 19i, and 196.] 

A. ASSIMILATED colonies AND TEEEITOEIES. 

A. (A) COLOXIES proper: IXDO-CHIXA, MADAGASCAR, MARTINIQUE, REUXIOX, GUADE- 
LOrPE, XEW CALEDOXIA, GUIAXA, GABOOX. 

The assimilated possessions of France, having the French tariff 
scheckiles ^vith relatively few exceptions, necessarily have practically 
indentical tariffs. It will therefore be advantageous to discuss col- 
lectively the tarifi systems of Indo-China, Madagascar, Martinique, 
Keunion, Guadeloupe, New Caledonia, Guiana, and Gaboon. But 
Algeria and Tunis differ from the assimilated colonies, strictly so called, 
in respect to the basis or the degree of their assimilation and require 
separate consideration, though, for pm-poses of comparison, figures 
relating to them are entered in Tables 4, 5, and 6. 

Comviurcial importance. — It may be seen from Table 4 that the 
trade of the assimilated colonies is of much more importance than 
that of the nonassimilated= For the five-year period, 1S99-1903, the 
total trade of the French colonies amounted to 1,588.1 millions of 
francS; while the trade of the assimilated colonies totaled 1,289.4 
millions, or 81.1 per cent of the whole. For the five-year period, 
1909-1913, the trade of the assimilated colonies amounted to 2,143 
miUions of francs out of a total of 2,805 milhons, or 76.4 per cent of 
the total, i. e., the commercial development of the assimilated was 
not keeping pace with that of the nonassimilated colonies. If we 
leave out of account Algeria, as not being in French eyes a colony, the 
commercial importance of the remaining assimilated colonies shrinks 
by nearly one-half. And since France enjoys a greater share of the 
trade of Algeria than of any other of her colonies, ^^ her trade with the 
assimilated colonies would be decreased by over tliree-fifths by 
omitting Algeria from that classification. 

France's share of the trade of the assimilated and special regime 
colonies is as a rule much larger than her share of that of the open- 
door colonies. Among the assimilated colonies, Indo-China is a nota- 
ble exception. In 1910 only 27.7 per cent of Indo-China's total trade 
was with the mother country, and 1.7 per cent with other French 
colonies, while 70.6 per cent V\'as with foreign countries. In 1913 the 
percentages were 28.4, 1.5, and 70.1; but of the imports of Indo- 
China, 35 per cent came from France.^^ Less important exceptions 
are K"ew Caledonia and Oceania. All three exceptions are due to 
obvious geographical influences. Among the open-door colonies, the 
French share of the trade of Morocco barely attained 50 per cent in 
1913.®^ The rapid increase in Moroccan trade is seen to consist 
mainly of imports, and the increase in the French share of this trade 
is due largely to the activity of the French Government in organizing 
and developing the country. 



35 Guadeloupe had a higher percentasje in 1910, but see the figures for 1913, p. 139. 

66 See table 2, p. 139. 

67 Table 4 shows ±^quatorial Africa as trading to the extent of more than 50 per cent witli France; but see 
Taole 2, p. 139. 



FRANCE. 



163 



Table 4. 



■Trade and population of French colonies classified according to their customs 
systems. 





Average 
total 
annual 
trade,! 
1899-1903 
(in mil- 
lions of 
francs). 


Average 
total 
annual 
trade,! 
1909-1913 
(in mil- 
lions of 
francs). 


Percentage of total trade in 
1910. 


Total 
popula- 
tion2 (000 
omitted). 


European 


French colonies. 


With 
France. 


With 
French 
colonies. 


With 

foreign 

countries. 


popula- 
tion (la. 
thou- 
sands). 


Assimilated colonies: 

Algeria 


634.0 
316.6 
118.3 
51.6 
44.6 
37.6 
35.1 
22.8 
19.5 
9.3 


1,051.0 
546.2 
267.9 
90.3 
46.2 
38.4 
38.1 
25.9 
23.7 
15.3 


78.4 
27.7 
52.5 
72.1 
73.2 
73.6 
82.3 
43.1 
60.0 
45.2 


2.5 
1.7 
8.4 
4.0 
3.3 
18.8 
3.1 
3.7 
1.7 
0.5 


19.1 
70.6 
39.1 
23.9 
23.5 
7.6 
14.6 
53.2 
38.3 
54.3 


5,563 

16,990 

1,953 

3,512 

193 

174 

212 

50 

49 

4,000 


796 

23.7 
130 

18 


Indo-China 


Tunis 


Madagascar , 


Martinique 


Reunion 


159 


Guadeloupe 


15 7 


New Caledonia 


18 


French Guiana 


26.1 


Gaboon 3.. 


7 






Total 


1, 289. 4 


2,143.0 








32, 896 


1,187.2 












Open-door colonies: 

Morocco 4 


89.8 

1 39.4 

12.6 

24.9 

7.6 


226.0 

68.9 

65.4 
46.6 
29.7 
6 6.5 


41.7 
/ 23.6 
\ 36.6 
17.4 
32.3 
57.2 


58 3 


5,400 
911 

1,417 
208 
268 

5,000 
70 


67 


Dahomey . 


76.4 
63.4 
9 SI 7 


} - 

6 


Ivory Coast 


French Somalil and. . 


French India 


4.0 
.0 


63.7 
42.8 


1. 1 


Equatorial Africa & 


.8 


New Hebrides 


.9 














Total.... 


174.3 


443.1 








13, 274 


71 9 













Special regime colonies: 
West Africa 7 


94.8 

7.5 

22.1 


191.5 
14.6 
12.8 


57.6 
11.3 
62.3 


1.6 

.0 

3.0 


40.8 
88.7 
34.7 


9,257 

30 

4 


9 


French Oceania 


8 


St. Pierre and Miquelon 


.35 


Total 


124.4 


218.9 








9,291 i 15.35 












Grand total 8 


1,588.1 


2,805.0 








55,461 1.274.45 















1 Statistiques Coloniales, 1905 and 1914. Other sources for the figures for Algeria, Tunis, Morocco, 
Dahomey, and the Ivory Coast, and Gaboon. 

2 Statesman's Year-Book, 1920. 

3 Gaboon includes much territory that is not assimilated. 

* Figures for the whole empire, which was divided in 1912 into French and Spanish zones. 

* Excluding Gaboon. 

"Trade for the year 1916. Interstate Commission of Australia: Report on British and Australian 
Trade in the South Pacific, April 25, 1918. 

^ Excluding Dahomey and the Ivory Coast. 

8 The grand total for the colonies may be compared with the total general commerce of France which 
averaged for the years 1909-1913 nearly 18,000,000,000 francs. France imported from her colonies in 1899- 
1903 an average of 8. 12 per cent of her imports and in 1909-1913, 9.28 per cent. She exported to the colo- 
nies in 1899-1903, 10.47 per cent of her exports and in 1909-1913, 10.92 per cent. In 1913, 44.66 per cent 
of the colonial imports were French or French colonial products and 45.1 per cent of the exported produce 
of the colonies was exported to France or to French colonies. See Girault, op. cit., pp. 162-185, for com- 
ments on the trustworthiness of the colonial statistics. 



TARIFF HISTORY. 

Inauguration of differential tariffs in the colonies. — The protectionist 
movement of the eighties led to the imposition of differential tariffs 
in various colonies. The tariff of Algeria was assimilated to that of 
France in 1884 and Indo-China in 1887. Of the other colonies 
whose tariffs were later assimilated in law or in fact Madagascar 
had not yet been annexed and Tunis was still under the restrictions 
of most-favored-nation treaties, but the others except New Caledonia 
either accepted or were given new tariffs discriminating against 
foreign goods. The councils of Guadeloupe, Martinique, and Re- 



164 COLONIAL TAEIFF POLICIES. 

union ^^ were (in 1884 and 1885) induced by threats and promises 
to vote new duties on foreign goods. As a reward for their com- 
pliance a rebate of 12 per cent of the French tariff w~as granted to 
colonial sugars and seven francs per 100 kilograms was added to the 
rate on foreign sugars. Of the other colonies, whose councils had 
received no power of making tariffs, Indo-China, Gaboon, Guiana, 
and St. Pierre and Miquelon were given differential tariffs.®^ AU 
merchandise was to pay duties in Gaboon, but French goods were 
granted a rebate of 20 per cent in 1883, 60 per cent in 1884, and — • 
except alcohol and arms — ^^ 100 per cent from January 1, 1891. 
French goods entering Indo-China were granted in 1886 a rebate of 
one-half of the duties — which Vv'-ere generally at the rate of 5 per cent. 
In St. Pierre and Miquelon a previous tariff was restored in 1889 and 
in the following ^^ear in Guiana a new charge of 4 per cent for foreign 
goods was added to the general rate of 3 per cent previously levied 
on all goods, including French. ^^ 

Assiinilation of tariffs under the law of 1892. — Under the law of 
January 11, 1892, the tariffs of Indo-China, Martinique, Reunion, 
Guadeloupe, New Caledonia, Guiana, and Gaboon were assimi- 
lated to that of France. From that date these colonies have had 
free trade with each other and with France and have presented 
the French tariff as a barrier to the trade of the outside world. The 
Comoro Islands were added in 1896 to the list of assimilated colonies; 
and Madagascar was added in 1897.'^^ All of the colonies assimilated 
in 1892 except New Caledonia already had tariffs which discriminated 
in favor of French goods, but now the amount of preference was 
increased. The rates of the French tariff had been used sparingly 
hitherto in the colonies; the usual rates were 4, 6, or 10 per cent, 
while there were a few as high as 15 or 20 per cent. But now the full 
French rates — at that very time being revised upward — were applied. 
The outstanding features of the colonial tariff system of 1892, together 
with the modifications introduced since that date, are set forth in the 
following paragraphs. 

FEATURES OF THE SYSTEM. 

(i) French goods enter assimilated colonies duty free. — In the assimi- 
lated colonies no customs duties are levied on French goods or on 
goods which have been nationalized by the payment of duties in 
France, if the shipment is direct,^^ whatever the flag under which the 
merchandise is carried. This free importation of French goods is 
not mentioned in the law of 1892, but is based on the Senatus-Con- 
sultum of July 4, 1865, which legalized the distinction between the 
terms '' customs duty," that is, the duty paid only by foreign goods, 
and other duties such as the octrois de mer which are paid equally 
by goods of all origins. Such local consumption duties exist in all 
the colonies and French goods have never been exempt from them. 

68 These councils had, as French protectionists expressed it, abused their powers under the Senatus- 
Consultum of July 4, 1866, by imposing the same taxes on French as on foreign goods. 

69 Also Mayotte in 1888; Nossi-Be and Senegal in 1890; and the Ivory Coast in 1889. 

70 These retaiued the 60 per cent rebate. 

71 See Girault: Op. cit., pp. 90-92, and Trescher: Op. cit., pp. 78-83. . 

" Diego-Suarez (since 1885 a French colony on the island of Madagascar), the island of Nossi Be, and the 
Island of Ste. Marie had been placed under the authority of the governor general of Madagascar in 1896. 
The Comoro Islands came under the same jurisdiction in 1914. 

"3 The requirement of direct shipment was greatly relaxed during the war. See e. g. Supplement to 
Commerce Reports, No. 72b, Mar. 3, 1920; The Times Trade Supplement, Sept., 1916, p. 121. 



FEANCE, 165 

Goods manufactured or elaborated in bond in France pay on impor- 
tation into these colonies as they would if taken out of bond for 
consumption in France, that is, according to the amount of foreign 
material contained in them^ except in the Antilles (Guadeloupe and 
Martinique) and Reunion where they enter free J* 

(ii) French colonial goods enter French colonies duty free. — ^All 
products of any French colony, whether assimilated or not, are 
admitted free to all other colonies 7^ The only exception ^^ is that 
goods coming from French India pay the rates accorded to goods of 
the most-favored nation, save that 2,000,000 kilograms of longcloth 
up to No. 26 French, and 1,500,000 kilograms of yarn not beyond 
No. 20 French may enter the other colonies " from French India duty 
free, provided they are made from yarn from Pondicherry. Foreign 
goods imported into a French colony through another French colony 
pay in the second the difference in the tariff rates, if the latter has 
the higher rate on the goods in question 7^ 

(Hi) Foreign goods entering assimilated colonies fay the rates of 
the French tariff, except where special rates have been established for 
them by decree. — Decrees changing rates for 'individual colonies have 
introduced variety into the colonial tariffs,'^® but the Government has 
been ^'preoccupied much more with realizing the intentions and the 
aim pursued by the authors of the law of January 11, 1892, than with 
attending to the advice given by the local councils. "^^ Jules Ferry 
advanced the view that this power of decree should be used to give 
each colony a tariff suited to its needs; but this principle, if embodied 
in practice at all, has been followed in the spu'it of explanations 
offered in the Chamber of 1891 — that exceptions should be made only 
for articles of the first necessity or for products which France could 
not furnish. ^^ 

The increases made from time to time in the French tariff schedules 
do not go into effect automatically in the assimilated colonies, but 
only after they have been proclaimed in each colony. This point 
has been of special importance since June, 1919, for the increases have 
been very numerous; only a few of them, however, have as yet 
(October, 1921) been applied in the colonies (See p. 156). 

All of these decrees which have changed the rates for individual 
colonies have specified that the surtaxes on goods of a European 
country imported through another European country, and on non- 
European goods through a country of Europe ^^ should not apply 
in these colonies. 

(iv) Exceptions to the French tariff ^ in assimilated colonies are 
decreed by the French executive. — -The tariffs of the assimilated colonies 
are made, since they are the tariffs of France, by the French legisla- 
ture. Provision is made, however, for exceptions in the application 
of the French tariff to the colonies. The determination of exceptional 
rates might, of course, have been left to the action of the French 

?4 Law of May 16, 1863. 

r^ By Art. V of the law of 1892. 

"Introduced in 1904. 

'? The New Hebrides and the protectorates of Tunis and Morocco are not colonies within the meaning 
of this law. . 

'8 Law of Jan. 11, 1892, Art. V. 

'9 Although most of the schedules have been practically unaffected. See descriptions of schedules below, 
p. 169. 

^ Girault: Op. cit., p. 99, quoting Bouchie de Belie. 

81 Augier and Marvaud: Op. cit., p. 393. 

82 Taoles C and D of the taria of 1892. 



166 COLONIAL TAEIFF POLICIES. 

legislature, but by the law of 1892 this function was delegated to the 
executive, and since that time the legislature has not interfered with 
it. The special free list of each colony and the schedule of special 
digressions from the French tariff rates are therefore established by 
decrees of the French Council of State, though ^'The Councils General 
and the Councils of Administration of the colonies may also pass 
resolutions asking for exceptions from the metropolitan tariffs. "^^ 

The octrois de mer and similar local taxes, other than customs 
duties, are unlike the latter in that they are established by resolutions 
of the local councils. Until 1916 these resolutions required ratifica- 
tion by the Council of State. Since then, the colonial minister, if 
supported by the Council of State, has had the right to veto thern.^* 

When a change is made in the law the legislature frequently makes 
the date of its application to the colonies dependent upon an execu- 
tive decree. Thus, the tariff revision of 1910 did not extend to the colo- 
nial tariffs until decrees had been issued in the following year revisiag 
their special tariffs. ^^ 

(v) Export duties are, as a rule, not differential. — Export duties were 
abolished in France in 1863,^^ but they remained in most of the colo- 
nies, including all of the assimilated colonies. The newer colonies, 
Indo-China, Madagascar, a.nd Gaboon, taxed all exports for a number 
of years, but within the decade before the war they granted free 
export to many articles and decreased the rates of the duties collected. 
In Gaboon for two years before the war rubber and ivory alone were 
paying export duties. In Madagascar the duty on rubber was not 
renewed in 1914, and there remained only the export duty of 2.50 
francs per head on cattle.^^ In Indo-China 31 rates still appeared 
on the export duty list. 

In the older colonies export duties are a fundamental feature of 
the fiscal system. Where practically all the produce is exported, an 
export duty is looked upon as a fair and an easy way of collecting 
the equivalent of a land tax. The articles taxed, and more particu- 
larly the rates, dift'er from tim_e to time, but generally there is a low 
duty on all the most important exports, regardless of destination. 
These taxes regularly include articles which are exported almost 
exclusively to France. In the sugar producing colonies the export 
duty falls chiefly on sugar, molasses, and rum; in New Caledonia, on 
ores;®^ and in Guiana, on gold. The rates of these duties have been 
generally raised since the war began. For instance, in Reunion 
export duties were extended to new articles in 1915 and the rate was 
increased from 2 to 3 per cent ad valorem, and in 1916 a shding 
scale was introduced by which the rates on the chief products were 
to increase more rapidly than the rise in price.^^ In Madagascar 3 
per cent was imposed upon practically all exports .^^ In Guadeloupe, 

83 Law of Jan. 11, 1892, Art. IV. 

8^ The power to put them in force provisionally, formerly possessed by the colonial governors, was taken 
away in 1900. 

8" Law of Mar. 29, 1910, Art. VII. In 1910 the French tariff was revised upward, and it was these increased 
rates whose enforcement in the colonies was delayed ; the relatively few decreases in rates were made imme- 
diately appheable in the colonies. 

86 A few have been reintroduced lately, e. g. 25 francs per 100 kilos upon oilcake (decree of June 30, 1920). 

8T This duty on exported cattle is associated with an almost complete prohibition on the exportation o£, o 
cows and heifers, and is in the nature of a statistical fee. .•,■,-; 

88 Since June, 1917, there is also a duty of 5 per cent on copra, hides, and mother-of-pearl, and since Septl, , 
1920, a duty of 8 per cent on preserves and extracts of meat and on tallow. 

88 Decrees of Jan. 21, 1915 and Sept. 15, 1916. 

^ Decree of May 30, 1919. Forty products are enumerated as duitable at 3 per cent; cows and heifers at 
60 francs each and other cattle at 10 francs. These duties were imposed for five years. 



FRANCE. 167 

where the rates on sugar, coffee, cocoa, and rum are on a sliding scale, 
the rise in the price of sugar in 1920 brought the export duty upon that 
article to 6 per cent ad valorem. Sugar, cattle, and cocoa are exported 
almost exclusively to France; vanilla is the one product of Guade- 
loupe exported almost exclusively to the United States. Not until 
September, 1920, was any export duty imposed upon vanilla, and 
the rate is 75 centimes per kilogram, which was, at the time of its 
imposition, equal to an ad valorem rate of 1^ per cent.®^ 

As a general rule the French colonial export duties are levied 
only in response to fiscal needs. The decrees which increase export 
duties usually contain reference to the fiscal needs of the colony. 
That these taxes contain no concealed discrimination is easily seen 
by checking up the predominant share of France in the consumption 
of many of the articles on which they are levied; but it can not be 
affirmed that motives other than fiscal are entirely without influence.'*^ 
And in Indo-China since 1898 there has been an open differential in 
that the export duties have not been levied on goods exported 
directly to France and the French colonies. However, in addition 
to the regular export duty collected in Indo-China there is another 
impost on rice exports, levied in lieu of a land tax, and this is paid on 
exports to France as well as to other destinations.^^ Rice constitutes 
two-thirds of the export trade of Indo-China. The other export 
duties are on animals, including buffaloes and elephants, and on 
silk floss, raw and ginned cotton, fish, sugar, spices, etc. 

(vi) Colonial exports to France enter free: This free entry, ex- 
cept in the case of materials admitted free regardless of origin, is con- 
ditional upon direct transportation either by French or by foreign 
vessels. The only exceptions to the rule of free entry are sugar 
and sugared products and pepper. This breach in the general 
principle was allowed because of the need of raising revenue in 
France from consumption staples, especially from colonial products. 
The tariff law of 1892 set forth a longer list, in Table E^^ — sugar, 
tea, coffee, cocoa, chocolate, vanilla, pepper and spices, with the 
provision that they should pay only one-haK of the usual duty. 
In 1900 when the French tariff on coffee was reduced from 156 
francs per 100 kilograms to 136 francs, the colonial preference of 78 
francs per 100 kilograms was maintained. Instead of the new rate 
on the colonial product being one-haK of the French tariff as before, 
it was now ^'the Metropolitan tariff diminished by 78 francs." This 
made it 58 francs instead of the 68 francs that it would otherwise 
have been. Similarly, when the rate on pepper was raised in 1903 
from 208 to 312 francs, the colonial preference in francs per 100 
kilograms was maintained at 104, by making the item in Table E 
read '^the Metropolitan tariff diminished by 104 francs." Since 
1909, pepper from Indo-China has been admitted at this rate only 

91 Decree of Aug. 28, 1920. Commerce Reports, Oct. 21. The prohibition imposed durmgthe war on the 
exportation of sugar from Guadeloupe to countries other than France was repealed July 12, 1921. 

22 For instance, it was reported by an American consul that the increase of duty on the molasses of Guade- 
loupe in 1912, an increase almost as great per liter as tnat on rum, was intended to foster the home industry 
of converting molasses into rum. 

S3 The rate of this duty was trebled early in 1920 and then doubled a few months later. Special measures 
for the conservation of the rice supply in several countries in the Far East made a higher rate of duty iu 
Indo-China more feasible, and the rate is understood to be temporary. See The Board of Trade Journal, 
Feh. 5 and Apr. 20, 1920, pp. 188 and 746. For the differential duties of New Caledonia, see p. 52 fn. 

9< Table E of the French tariff, as already noted above, sets forth the duty on products imported from 
French colonies. 



168 COLONIAL TARIFF POLICIES. 

in limited quantities, fixed by decree every three years.^^ Additional 
quantities enter under the nunimum tariff if imported '' directly." 

By the law of August 5, 1913, all colonial consumption staples, 
except pepper, sugar, and sugared products, were to enter France 
free after January 1, 1914, if imported "directly." In consequence, 
in order to prevent evasion of duties by roundabout importation 
into France, the special reductions from the French rates on tea, 
coffee, cocoa, etc., which had been in force in some of the assimilated 
colonies were abolished, with the result that the rates of the French 
tariff were automatically reimposed.^^ 

The law of 1892 gave sugar produced in the colonies only slight 
advantages over the foreign product, and these, with those granted 
later, had to be reduced after the adherence of France to the Brussels 
sugar convention in 1902. Accordingly, colonial sugar from any 
colony was subject to the regular Metropolitan duty, 25 francs per 
100 kilograms net;^^ but it was exempt from the surtax of 5.50 francs 
on raw sugar jdelding 98 per cent or less of refined sugar, and of 6 
francs on better grades. Some time after the French denunciation 
of the Brussels sugar convention had become effective an additional 
duty of 14 francs per 100 kilogram.s was imposed on foreign sugars, 
becoming effective June 10, 1920.^ Colonial sugar benefits also b}^ 
a deduction for freight paid (detaxe de distance), equal to the cost 
of transportation provided that cost does not exceed, in the case of 
sugar from the Caribbean colonieSj 2,25 francs, or in the case of 
imports from other colonies, 2.50 francs per 100 kilograms of refined 
sugar. Sugared products from the colonies also enjoy special rates. ^ 

Tlie differential features — Sum,rnary. — The tariffs of the assimi- 
lated colonies present the m.aximum of the commercial discrimina- 
tions which appear in the French system. With the exceptions 
set forth in some detail in Table 5, foreign goods pay in these colo- 
nies the full rates of the French tariff,^ or in a very few instances 
higher rates, while French goods are entirely exempt from the cus- 
toms duty. The consumption duties, however, collected under 
various names, fall equally on French and on foreign goods. The 
discrimination in favor of colonial products entering France is very 
similar because, with the exception of sugar and pepper, these 
products enter free of customs duty, but consumption duties are 
levied on typical colonial products — coffee, cocoa,^ etc. Complete 
exemption from customs duties is the rule in the intercolonial trade 
of the French empire, except that duties are levied upon m.ost of the 
products of French India. The trade between France and the 

85 A decree of June 5. 1919, fixes the quantities for 1919, 1920, and 1921, increasing them to — from Cochin- 
China, 500 tons, and from Cambodia, 2.000 tons. 

96 Suchindirect importation of colonial products had been penalized more heavily by a law of 1900, which 
provided tliat such products so imported should pay the rates of the French general tariff less the duty 
already paid in a colony or Algeria. The rate of the general tariff on these products is approximately 
double that of the nunimum tariff, except on sugar and cocoa, which have single rates of duty, and on 
sugared products. Most of the countries from which such goods come are entitled to the minimum rates 
for direct importation, so that the penalty on importation through a French colony amounted to practically 
a doubling of the duty. 

97 Candy sugar, 28.75 francs. 

1 France denounced the Brussels sugar convention on Sept. 1, 1918. The new duty was imposed in 
October, 1919, but owing to the prohibition then in force upon importation of sugar by private individxials 
the duty did not go into eft'ect until June 10, 1920. (Times Trade Supplement, Oct. 25, 1919, p. 53. Cire. of 
July 23, 1919. Serie Generale, No. 49.) ^ - ' --t^ 

3 Shown in Nos. 90-95 of the French tariff schedules. The preferential features of these rates were also 
increased by the duties whicli became effective June 10, 1920. 

3 Except in so far as the latest increases in these rates have not at any given moment been proclaimed in 
the colony in question. 

* See Board of Trade Journal, June 24, 1920, and Commerce Reports, July 26, 1920. 



FRAI^CE. 169 

assimilated colonies is required to go directly, except in the case of 
articles on the free lists, and this requirement largely excludes for- 
eign vessels from this trade, except in the case of rice,^ and cereals 
imported from Indo-China and sugar from Martinique and Guade- 
loupe.® 

TARIFF SCHEDULES IN THE DIFFERENT COLONIES. 

Customs duties. — It must be kept in mind that the tariff schedules 
of the assimilated colonies individually contain only the exceptional 
rates and that on all articles for v/hich there are none such the rates 
of the French tariff are applied. The exceptions take the form 
almost invariably of reductions. The free lists consist of articles 
additional to those v/hich enter the m.other country free. It will be 
observed from the length of the additional colonial free list and the 
list of special tariffs exhibited below ^ that there is a considerable 
departure in the colonies from the rates of the French import sched- 
ules. An accurate evaluation of the amount of the departure would, 
of course, require a consideration of the importance of each article of 
import and of the amount by which the rate had been reduced below 
the French rate when the article was placed on the special tariff 
list. In some cases the reduced rate will be found to be still pro- 
hibitive. In a few cases the colonial customs duties, and in many 
cases the consumption duties are ad valorem, making it difficult to 
compare them with the specific rates of the French tariff, 

ConsumjMon duties. — On the other hand, the octrois de mer and 
the consumption duties miay or may not correspond to local excises; 
they may represent,^ indeed (though they usually do not), a certain 
amount of local protection to local manufacturers or producers, but 
in any case they are nonpreferential as between the French and 
their competitors outside of the colony in question. It follows that 
when an article appears both on the special tariff schedules and on 
those of the octroi de mer the principle of tariff assimilation has 
suffered a double breach in that French goods entering the colonies 
are compelled to pay a tax and foreign goods are made to pay less 
than is required of them in France, 

The exceptions to the French tariff in the schedules of the assimi- 
lated colonies proper are not easily summarized. Only very general 
statements can be made concerning the tariffs of all eight colonies 
collectively. They all have special rates on tobacco. They all have 
some reductions or exemptions in reference to live animals and to 
foodstuffs. They most commonly accord reductions on cattle^ 
salted meat, certain dried fish, wheat, flour, corn and corn meal, 
and seeds for sowing. None of them has strildngly longer or 
shorter lists than the others and none has strikingly greater reduc- 
tions.® 

The consumption duties and octrois de mer levied in the assimilated 
colonies vary much more than do the exceptions from the French 
tariff. Indo-China levies upon tobacco, liquors, mineral oils, salt; 

6 The export duties of Indo-China are differential except as to part of the charge on rice. 

8 See table on p. 161. The statement is based on the figures for 1913, and has not been checked for the 
effect of the more recent shortage of shipping. 
: ;?Seep. 171. 

sSeep. 149. 

3 Aside from edible products, the chief reductions are in woods, casks, sacks, and petrok^um. Higlier 
rates than the French are found on matches in Indo-China and Gaboon, on beer in Indo-China, and on 
edible oils in Guadeloupe and Martinique. 



170 COLONIAL TARIFF POLICIES. 

powders, and matches ; Gaboon adds to this list sugar, arms, and cot- 
tons ; Madagascar adds to these meats and fish, other textiles, spices, 
candles, and edible oils. In Guadeloupe, Martinique, Reunion, New 
Caledonia, and Guiana the consumption duties are levied on nearly 
all articles, though only Guiana and Reunion include in their schedules 
general rates on '^all articles not enumerated" and not on special 
free lists. It will be observed that while the table below has made 
no distinction between the different kinds of consumption duties in 
the other colonies, those for Guiana and Reunion have been listed 
separately because of their great number. 

A considerable number of the consumption duties are higher than 
the French minimum tarifi duties, and hence they increase by more 
than 100 per cent the charges actually levied on a foreign article 
when imported. In 1909 the revenue from these duties was in New 
Caledonia twice and in Guiana nearly four times as great as that 
from the customs duty. In Madagascar and Indo-China the reve- 
nues from consumption duties likewise largely exceeded the customs 
revenue.^^ These figures of total revenue, however, throw no light 
on the relative average' height of the customs and consumption 
duties. They include, apparently, in some cases at least, sums col- 
lected on local production. Further, in so far as the tariff rates 
exclude foreign goods and substitute French products they decrease 
the customs revenue without affecting the revenue from consump- 
tion duties. A revenue from consumption duties twice as great as 
that from customs duties might result from either of two combina- 
tions: Low tariff rates, admitting considerable quantities of foreign 
goods as well as French, with consumption duties at higher rates on 
the goods thus admitted, or high tariff rates, reducing the importa- 
tion of foreign goods to a small fraction of the total and leaving it 
to French goods, admitted free, to form the bulk of the imports— 
in which case the revenue from customs duties would be sm^all and 
that from consumption duties would be relatively large. The latter 
is virtually the situation which prevails. 

10 For other colonies the figures are not given separately. In 1918 Madagascar received S720,000 from 
consumption duties on imports and only S540,500 from import duties. The consumption duties on local 
products yielded S159,000. In 1917 the receipts from customs duties were over 12 per cent of the value of 
non-French goods imported; the receipts from consumption duties on imports were 4 per cent of the total 
value imported. 



FEANCE. 



171 



00 









c3 c? 



88 



^6.2 



'2 S 

« bfi 






• o oo 

3 o oo 



888888 

CO CM <N '-1 1-1 



8 88 



O oo c 

id o LO (>? lo Lo ■ 



; to rfi CO '-( !N 1-H ■ 



88 






88? 



CO (N »0 



2§ 



tsse^ 



-o 



8 8 88 



CO »o coo 



_c^'2 
■2pS 

>» 2 <D 



^^^ '^■riX} 



a«M 



•I 
I 



185766 




172 



COLOISriAL TAEIFP POLICIES. 



58 88 88 



888 8 

ooc5 o 

<M O lO O 






ooo cTo 

8S^2g 

>— I lo >o o ro 









888 8 
§88 § 



^6, 






888 oS 

cc c o o -^ 



888 

OCJCJ 



O lO O Q 

CCOO o 

O CD <0 O 

O <-i "-I lO 



888 

OCJO 
IC 113 O 



8 

CO 




8 8 


L^ ^,-J CC lO 






S 


88 






oc 


ofci 






^^ 


^.^.^ 




8 






s 


S»3 


8 8 8 



5" o 



SS88 



oo o 

JS 8 



Sooo oo oo ooooooogo o oo 



IC O oc lO lO IC t^ :c 

— I iM -# T-l CO M r-< 



; j>- >^ CO o ,^ i-o — -, 

^ -r O ^-O lO 



oc5 o' 






g „-0Q <! O gOE^ „-0^ ;--0;^ 



6 C 









FRANCE. 



173 



8 g 

g 1 




























:S8 

• c^co 










joo 






:§8 


:S 
:.d 

• CO 

i i 


g 8 










:S 










:£ 



















s_ 
















g 8 

g I 




8 




















Co 


^ 








; 88 

?5 
















300. 00 

300. no 

25.00 
25.00 
25.00 
25.00 
25.00 


^;g^^„^ 


8 

CO 














^^ 


e 






^ 




8 8 






88 


c:S£ 






^ 












8g8g 

;^ tH I>r ,4 r-i 






c^ 














g 










t-^iO o 










O 


S8 

'8e 


c 




8 8 










£ 














8 












888 

Cr CO CO CO 




^ 


^ 




8 8 

04 (M 










£ 
















8 - 




8 




888 


8 8 


8 

CO 










































8 












^ 








1 


O O ooooo CD O LOr- 

^2 "^S S 


888 

d ^" s4 

^^8 £ 


oo !M OOO 


£ 




i 


3,250.00 
1,800.00 

3.00,10.00 

1.00 

5.00 

6.00,12.00 

1.00-15.00 

.65 

1 1.00,1 25 

\ 1. tb 

.75 

1.50 

.20 

1.00 

3.50,5.00, 

1 1.00 

5.00-2.00 

6.00-12.00 

20.00 

(17) 

12.00 

9.00 

80.00 

.12 

9.00 
12.50 
9.00 
3.30 

13.20-37.40 
12.00 
12.00 
20.00 


1 - 

B 


o 


> 






o 

3 


o 


2 

c 

E 

a 

8 

1 


c 
o 

1 


1 


6 




^ 


1 
o 

1 


1 

g 


1 

>• 

i 


> 

1 
1 

> 


t 

ft 


2 




i 
i 


o 
1 

(^ 

OP 

c 
3 




■© 

B, 

S 

§ • 

.a • 

li 

o ; 

d^ •■ 

If 
1" 


o 


E 
g 

1 
o 

2 

-s 

1 


3 


S 


> 

1 

1 

c3 

m 


1 


8 


1 

o 








O 










00 












8 




iC 


S 




8 


F^ 






8 








S 


s: 


§ 


00 









'o ® 
lO P 



CD c3 c? 



?5Sr~^ 



id 



en ^ 1—1 

o ;::!; c^ 

£'"' !3 
CO lO '^ 



en 



?, R, 



O O 



o 2 © p o rt 






S2 



" ~ ■" "^ s 



-- -iS ^1 ^ CO ^ 

o J-H +J i— I 

i; c«0 c3 y M 



174 



COLONIAL TARIFF POLICIES. 



B.^ a 

t^ o) 3 

^ ^ -l^ 



:^^ 






+3 O" 






>~4 



o 



^i 



3^^ 

"^ . g 

^ -1-5 O) 

^ m i^ 



§ O o 






.5 bi3d^ 
-2^ dHH ^ 

^ OQ ,; f^ 

gj 8.d 
--: d "' "' 



.2 s.y 

-if 'Xi S o 

■? N ?^ ^;^ 

^ O d) OQ 



-l-s .d ,+^ J;^ 

li I 



-(J '°b CD 'T^ 

o"^, d -^ 



d o 



i 

d^ ^ 









DQ o 73 O -r 

1-H -U -U> --I , '"' 



o o ^ 

d c^S--^ 



j-. d 






T* d C 5-1 

" d 0^ 

§a 

S;^, a 



a d^a.t^ 

•g O r^ CO 02 

•E 5R d d 

'^ ^ ."tl _r d 
d ^ g d 

S'~§^^d^:g 
cj ^ d >> ^ r^^ a 

=4-1 cS fin ,,_( j^ 

^^^^ o-S d 

^ o'o a ^ 



d a> ^ c3 
^-<*a^ O p: 

S*' a^ 2:3 >^ 

rd .S- Cq _^ SQ rj ® 



02 O 






'd 
o 

la 

Q d 



® «e tr 



•S a 

5Pft| 'S-j^ 



^ .5 ^ :-*- S 

d -^ .t^ .'T^ d 

^ ^^'^ t 

S I d-l © 

d"d a.a~§l^ "^ 
d "-^ 

'^ (^ o o- 

<l^ d r-H ^ ^ • d 

S o o o Q^ ^^ 

^c+H 2 ?5 2 ^ 
"f o d 5h^ ^ ^ 

I g|5^dg§ 
•2 g o g s g.^ 



a 53^ 

d^ 03 



a' 



o 



(^ 



c3 ^ 



O 



CO O 5h O 

e <^ ^ rd 
S^ g-^ d 






_ OQ O 
C< +^ ft >^ 

^ S d "-^ 



® ft' 



2^ d o^ d 

'-^'•T-l -U 173 ..^ DO 

^ C3 - I § § ^ 

^^Wo^tdr a 

g.^'^ .d-d ^5 



Q ^rd ^ OQ 

:S S^ d'd 

•^ CD ;-, .^r^ 

■-^ 2 ^ d "^ 
az ^ to ,2 o 



-^ r^ Tl rt^ O 






- 0^ 02 O 

-^ .-« t^ ^.2 




-^Tj o d d 
^, d o-i2 w 
2 =^ a ^ © 



• o ^ 



I, o I 



a 









I 

a 

d 

a 

d 

a 

rd 

g 



02 

d 
o 

u 

o 

o 



g ft2"^ d 
2 o 



^Id Sd o -^ d 9 






rd 
i-i-i CD 



d S ?^ §.*^ 

^ 2 o^ 

!^ 'd rd ,^ <D 

-g^sid 
a^o^:g 

S hd^ 



o ^ 






CO y, 
d c^ 

O !^ 

S^ 

ft© 
© d 

!m © 



©i^ 



^ C3 Q 

V"! ''3 O "^ 

roT: c3 © 

<1^ C3 - ft 



. M gj w 



d 
© +j 



^^^^^ 
© &0 ©+^ 

a =* © ^ a 



© 

d o 

C3 02 

-^ © 



s .• 



_ _. © 02 
*^ © 



© 



rd 



©^ 



s © 



<:3 fl 

r^ d 



-^ ^ ft bb 

" ©^ 



■TJ a d 

'^ '?^ d 



© 

. d 

© 5 ft"^ 

S"^ ao' 

to x^2£? 
© 



© 



c3 rH 

-^^a-B^- 

^ -i§ 2 d K, 

- d'^^ d^. 

s d a o3 

© 03 O 1-s 

©rS <^ O 

d g § © 

■-i t .-. O ; 



o3 



-ii; d © 

■"^ -F^ ft^ ^ ^ 



If d 



© 

5- S- ^^ 



d 
:^ o 



(N 



d^- ^^ d 

-^ ©-^ s >.^ ^ 

02 »> ?-i m 02 

©^5c-©^v^©2g 
=^§ -ft^c^Sa-g 



© 



fto^ 



be 






^ j2 © n, c3 ro -r^ d to 02 

©^ .2gdft|.2^ 
^ o . dV A +3 ©^ 

d-^-'S^'^ ?q d <3^^'S 






o 
n3.S^ CO 

02 --5 o3 >< 
O o3 ^ 

ftOyn 03 



^O- O^g 



© § 2r2 1^© 

M © t^ © t> +s 



^©^2-0 

^ fe o 53 r^ 

■2-53 ©.i^ d^ 55 ^ ^-^ >,^ -S^\: 5 

a, © •;:3 .. © " 

f^ S ^- § © a ^ 
©^ g 02 ^ 

^■"S^-Sdi 

o ::j =R -PI a 

o r-i d Q .T5 



5^ 
1 



i^j-s;;^ 



10 



^ 02 Q ■ 

03 §^ I 

dH '^^ 

2 © CD 'd "^ TJ 'm 

q3^ 2 "^ !S 2? -^ 

^,&-'d3^ d © © 

<^ o j3 -^ aft 



c3 ■ rt oT 

.. t: © o 

"^ 03 03 
^l3 



O © ^ 



® 2 ©^ 
d 



45fti^ga 



FRAIsTCE. 



175 



d 
a 

B 



Oi 



^.s a^" ^:t^ I 

ro CD _Ci n-i O ^-^ 






.'^ C pi ^ 53 S D. 'iJ ^Cj 






Pi w p; 

CQ O 5m 



--s a o 

5 c a 
;= c^ u 

a; i-^XJ 

'^^^ 

o S^ 

^^ « 

C!! <^ 9^ 



•^ I i 

© ce B 

^ ^ c3 

O bJD i^ 

^ O &J0 



w *~ri T" r^ -^ (yj ^ _±fi 



=5xi 



rt <J^ ^ 

- g (p o 






"7?^ a c^ "^ m '^ 

CO w 



-^ o 1^ oi '^ -o I^.S C o ■-« S ^ o 
o 2 o o ^ 



o 



bo 






t>.'n 







^^ § 



~ y ^- 2 ^ CO 00 '— ' ^ 

c b^^ a, 

O <D t^-^ HJ ^ 



a ^^^^9 



q CO ^ "-^ q .,H i- .d 

a ^ § ©^ rf 

rt-^"^ a^ „^'s s *-^ ^ ,- ^ 

^g^^^^^^o^ga.^^gg.a- 



^ 
^^ 

■^ o_ 

. 



■ a >,-^ g 
















' ,±^ ^ 



-?lll& 



5 ^;S 



CO sr^ .' 



?J tc c« .-^ O 
■^ -— ' cc ^ -'-^ ^ 



-5 ^ 

(D QQ ^g 



p^ 5h 



2 45'^^^ ^ 0-" ''^ 00 QQ a 

^.75 sJ'^ "^ro^S^ OCOO 



P.^u . g 

(=|n3 O cePi< +2 

o ^ '^ .. o 

i? -M ^ 5^ CIS 



ft g ;>v-43 g^xJ ^ -H. —, 

5^=+-' CO fi-i S (JS ^^ O 

""^o-SS'o^^-^ 
'Tioor;5rnc3^nc!);3'-rt 

§|:-si||l|1.-.|lii' 
vlii^.liii Iritis 

^o3^s^dce0=^^a.5« 

>^fe rt■!^^ r/T'q E^Q^^ 



5 S 
CS-'-^ 

d a >. 



h2_,h^J2 ?3 CO ^ 0^-^ ^^ O^S 



■H-2 o 

CV+3 rj ^ 

p fe^ «.-3 «r^ o>.^ 

C!3 dS 



aa 



cS c3 {>j O 



1§ ^-^'asg 



a<1 ^Pnrt^ >.0O 







^ bJCi O . 

QQ 






-f^:^ 



o 2 f^^ o f^ 



^ ^ b£ 






Oh^'E o22 




^^ 



CO a bo 
^ o^ a 

^ bJD^--+^<J 

M"^ >^- 

t> ^ c3 pj 

o 2 =0^ 

o ^ , --^ 

00 >^ M j^ 
03 ^ ^ 

bjD c« >f fij 

.a'bi)> sS 

o a pj o 

&O0^ 

o 






^'t 



o 
0pQ 
q 



agi 



=^ r^ 

&§« 

O H 0*^ 

g^ § 0-' 

a ^ c« • 

g be ^ ^ 



A^ 



■ 

a 
o 
'0 

(73 



,0 cu 


g ^h^^ a 
pL, a >^ o) 
_ cr^ ^^ a 

--H.X, . P 

|.as^^ 

p{ a a oq" 

bJO (V) -"^ OQ 
■ 







a oq ^^ 

t^ a - 



^^2 



+3 a "^ 

4J O 03 



a 02 a 

a 
a 



^j*^ c^ ^ a 
« a -2-3 

O to 



CO o 

>^ 

DQ 



1T6 



COLOTTIAL TARIFF POLICIES. 



1—1 , r 

2 a' 



.o 



s-5 



c c ^ 
5 Ian; 



.2 =^ 

•^ 0? 



c3 ^ 



t: ^ s ^ 






c c 

m c 



-§ - 



Eh -3 



O C 



H.-^ c 



c3 O 





consuinp 
tion, cir- 
culation, 
and 
entry. 






c^ 


N 








o 


















5^ 




§ 


£ 








Alccria 
octroi and 
consump- 
tion* 


































%- 

s 




Indo- 
china 
consump- 
tion and 
circula- 
tion. 












































Madagas- 
car con- 
sumption 
dlity. 


LO o o 








lOO 


















ill 


Gaboon 
consump- 
tiotiduty. 


































o 




§11 


c3 


c 




O 1— lO ic -u- 


g t^ o 


5 






o X ;ooo.xx. oo 

C-J ^ Cq .CO 


3i 


§ 












s 






ISO ^r-^OiO{NO 


ICO 


g^s 2 


ii 

5 




lO 








2 §g 


CS! 


s 




c 




g 


ii 


Marti- 

niq no 

octroi 

and eon- 

sumption. 














ox 




S2 

coo 


° 






?5 


2gS 8 

+ + -r 


^"^ "3 5 




: 2 g ^^^22 ^^^§'^^23-'g2 
: + ^ ., • ^^ + 




ss 1 

-f- -f- 


Now Cale- 
donia octroi 
and con- 
sumption. 






: ^ 






o o — ' o o ^ •-':■ 




: ++ + 
: SB § 


III 




f ^ f n 




. OM XeO-OIMiO SJC^J O o 




^ 


"• 




js «i s . 

c3 c3 cSig 5.:: ox; 






^^8 



23 © O !» 
i. - _ £ C3 .© X- S ^3 2 



-2§|g 



I too I 



FEAKCE. 



1^7 



o" o 



r» o o o •^ Tti lo lo lo 

-^ ^. + + + 



CCtH eCua 






C9 «D lO O lO iO eo 



(MCOiOO 'CO 



'lO lO 



CO o 



»0 »0 »0 lO 






88 



•* -5i< -*-#•<* -^Jt 



»-• O iN Tf (N <N COt-h 



ii0r-(i-'O?-HiQ-^000ClOOOO«000i0O00O»0OOOO 

o 2 • o 

ro ,-1 ^ ^^ to 






SS g 



oo>o»oioioio»oio io 







OfOOO v-i 



c>» 03 CO i» fo CO e«3 • 



sb, 



bo 









-2 'S3 

« o 3 « c3 
S 2 S 2 2 



8 



?s >>,: 






O p: ^ S ., 
fc- o o o « 



00 




TS 


i^ 




PI 








o 
















ri S 




. 


O M 


-S ^ 


?^ 


Jr f^ 



l'7g COLONIAL TARIFF POLICIES. 



o 






a -^ 5= ^ . o 



TTT ^ _ . ^ _^ ^; »n c^ i ^^ c — n 






^ oQ o :-■ !- :i^ «- I— w .„ -g .^ ^ c; -^ ^ .^ -N 

5 c i-" .M P- c -^ Lt: --J- "r; , , zi ^ .3 , ~^ -r 

^o<^i^2i 3Si-'=S^'S HS'^^^2 

H ^1^.5^0 £|i^-|^^g, I^SpJ^ 



5t| 










g '^ S.% 'V "S: >^ .S:^ T" ^ .P ^ ::: -= E 2 = -^ - '^ 

'^ ©^ o ro ^ cl 



- _ r^ w UJ _ F 1 ^ _ W « Hi Kp 3 ; "-; 0£— . 1 CQ 



® o ro ^ c5 . 



o =: :^ ^ 5 5 ^ C C = ^ - 5 Q - ^ >-.- .^ ^ 



'TS 



I iillilliliiHlilllHl 




t^ ^ ^ '-r^ ^ ^ ^ ^ ^ =^ o -^ -2 ~^ ^ ~ S ^ ^ 



FKAITCE. 179 

ALGERIA. • 

COMMERCIAL IMrORTANCE. « 

Algeria easily ranks first in commerce among the French posses- 
sions. Its external commerce in the five years before the war aver- 
aged over a billion, francs, a sum exceeding the total commerce of the 
dozen minor colonies, excluding only the protectorates of Morocco, 
Tunis, a.nd Indo-China. The population of Algeria is about 5,500,000, 
of whom slightly over 750,000 are Europeans. With its considerable 
European population, its proximity to France, and the fact that 
French goods have entered free for over 80 years, while Algerian 
products have entered France free since 1851, it is not surprising 
that nearly 80 per cent of the Algerian exports go to France and 87 
per cent of the imports come from France. Algeria buys from France 
" all that the latter is capable of furnishing. ''^^ 

Algeria is more fully assimilated than is any other French posses- 
sion. It is indeed for most purposes considered not a colony but a 
part of France. Some of the laws refer to Algeria and the colonies, 
and Prof. Gira^ult even argues that article 3 of the tariff lav/ of 1892, 
referring to the '^colonies and possessions of France, ^^ does not in- 
clude Algeria.^^ Nevertheless, France and Algeria do not form a com- 
plete customs union, because there are certain exceptions to the prin- 
ciples of free trade between them and identical tariff barriers against 
the rest of the world, and because they do not pay the customs 
revenue into a common treasury. The difference between the French 
and the Algerian tariffs, and the degree of assimilation are described 
below. 

FEATURES OF THE ALGERIAN TARIFF SYSTEM. 

Im,2)orts from France are duty free. — Imports from France, whether 
they be French products or foreign goods nationalized by the pay- 
ment of the French tariff, pay no customs duty in Algeria, but in 
common with the products of all other countries they pay the local 
consumption duties, if there are any levied upon the conimodity in 
question. ^^ 

Imports from assimilated colonies are duty free', those from non- 
assimilated colonies pay duty. — Article 27 of the law of April 8, 1910, 
provided that '' colonial products,^* other than sugar and tobacco, the 
produce of the colonies, French possessions, and protectorates of 
Indo-China, shall pay in Algeria under the same conditions the same 
duties as in France, except for the application of the special Algerian 
tariff when that is more favorable." This law reversed some de- 
cisions of the Council of State, by which products of any colony had 
entered Algeria free under the rule of intercolonial free trade. Since 
1910, therefore, the rule has been that products of the assimilated 
colonies enter Algeria free and products of the nonassimilated colonies 

» Girault: Op. cit., pp. 256, 260, 262. The figures 80 per cent and 87 per cent are quoted from Girault, 
who does not refer to any one year. In 1913 the percentages were, for imports 82.8, and for exports 67.1. 
For reasons stated on p. 55 the proportion of exports to France has been declining. 

12 But the Observations Prellminaircs, 1908, refer to Art. 3 and Table E as regulating the Algerian tariff, 
p. 286. 

18 See additional duties, p. 181. 

"French ^vTiters, without discussing the point, interpret "colonial products" (ddnrees coloniales) in 
this case as covering all exports originating in the colonies and not merely the tropical products to which 
the term is often restricted. Arnaun6: Op. cit., p. 3-94; Girault: Op. cit., pp. 85, 120. 



180 COLONIAL TARIFF POLICIES. 

pay the French minimum tariff rates or the special Algerian tariff, if 
that is lower (see next paragraph) ; but there are important excep- 
tions. 

Exceptions. — {a) Sugar from either class of colonies pays in Al- 
geria the consumption duties and nothing more. 

(b) Importations into France of tobacco and of matches are for- 
bidden with certain exceptions, and these articles, even when of 
French colonial origin, pay in Algeria the rates of the special tariff, 
receiving no advantage over foreign goods. 

(c) Pepper from the assimilated colonies, according to Table E 
of the tariff of 1892, as revised in 1900 and 1913, pays in France two- 
thirds of the minimum tariff and therefore pays the same in Algeria 
where the special rate is no lower,^^ 

{d) The longcloth of French India entering France free under the 
law of 1892 may apparently enter Algeria free under the law of 1910. 

{e) Products of Tunis and Morocco, and the country south of 
Algeria, coming in overland, enter free under a law of July 17, 1867; 
if imported by sea, they pay as in France; that is, they pay the lowest 
rate paid by foreign goods, except that Tunisian cereals, animals, 
olive oil, etc., come in free, and Tunisian wine pays at a special rate.^^ 
The importation of Tunisian tan bark is prohibited. 

Imports JTOTfi foreign countries pay tlie FrencJi rates, with excep- 
tions. — Since the assimilation of Algeria in 1884 foreign imports 
into Algeria, with the exception of coffee, spices, beer, and tobacco, 
have paid the rates of the French tariff. Coffee pays 31.20 francs 
per 100 kilograms on the minimum tariff instead of the 136 francs 
paid in France. Spices pay two-thirds of the French rates and 
cigars and cigarettes pay 250 francs per 100 kilograms net instead 
of the 7,500 francs charged in France on the smaU quantities which 
individuals are permitted to import. Beer pays slightly less than 
the French rate, which includes the manufacturing tax not apphcable 
to Algeria. ^^ The rates on salt and salted meats have the appear- 
ance only of being different from the French rates; the latter have 
been augumented by the inclusion of the consumption tax on salt. 
Matches are subject to a State monopoly in France and their importa- 
tion except by the monopoly is prohibited; in Algeria they paid before 
the war the same duty as was charged to the monopoly in France. 
The rate was increased in 1917 to 72 francs per 100 kilograms. 

Sugar, tobacco, and matches have single rates in the 'special 
Algerian tariff; the other articles have both general and minimum 
rates. The French commercial treaties Y\^hich extend the minimum 
tariff to foreign countries include Algeria in every case, even when 
excluding some or all of the French colonies proper. The only dis- 
tinction made in the apphcation of the minimum tariff is that Swiss 
goods are entitled to its rates only if they have been transported 
through France. 

15 The law of 1909 limiting the amount of pepper from Indo-China admissible at this special reduction 
apparently applies to Algeria, though the decrees fixing the amounts admissible annually specify importa- 
tions "into France," and customs decrees almost invariably read "France and Algeria." Similarly the 
decrees granting special rates to certain products of the nonassimilated colonies and of Tunis specify only 
France, but may include Algeria in their operation. Probably there is little direct trade between Algeria 
and the colonies. 

IS Pallain: Op. cit., Vol. I, p. 195. 

1^ Beer pays an octroi in addition so that the total taxation is greater than that of France. The French 
sales tax law of June 25, 1920, which levies an additional 1.1 per cent upon all imports is not applicable 
in Algeria, 



FEAM-CE, 181 

The registration or statistical tax is the same in Algeria as in 
France ;^^ also the surtaxes of Tables C^^ and D^® of the tariff and the 
surtaxes on sugars which have received a premium on exportation. 

Additional duties fall equally on French and on foreign goods. — ■ 
French, French colonial, and foreign goods entering Algeria pay 
ahke certain additional duties. These taxes are £10 wn as the 
octroi de mer and the droit de consommation. 

Many French cities have a special customs duty — a tariff for 
revenue only — on certain goods entering the city, and this duty is 
known as an octroi. Colonial octrois sometimes have protective 
features and they are collected at the frontier rather than at the city 
gates, but the same name is applied to them, because their proceeds 
are assigned to the support of the local governments. The Algerian 
octroi de mer is then a local government tax collected at the seaboard 
instead of at the boundaries of the municipalities. It is also levied 
on any domestic production, though this is an exception to the 
general colonial usage. The central government of Algeria keeps 
6 per cent for the expense of collection and the remainder is distributed 
among the local governments according to a rule which makes a dis- 
tinction between the European and the native populations. The 
droits de consommation or consumption duties are similar to the 
octrois de mer, but without the feature of local distribution. Neither 
of these taxes presents to the outsider any differences from the 
ordinary tariff; ail the regulations in regard to tare, credits, stores, 
contested rulings, etc., apply equally to all of them. But while the 
Algerian customs duties are made by the French legislature,^^ these 
octrois and consumption duties are passed first by a joint session of 
the financial delegations of Algeria, on the motion of one of the dele- 
gations and of the governor general and on the report of the com- 
mittee on finances; then they are adopted or rejected by the superior 
council of the Algerian Government, and finally, if adopted, they 
are made effective only by a decree of the French Council of State. 
These decrees fix not only the rates but the extent of territory affec- 
ted, the division of the proceeds, etc. 

The Algerian octroi de mer falls on sugar (at 25 francs per 100 kilo- 
grams), tea, coffee, pepper, vanilla, alcoholic beverages, mineral oils, 
and spices. Its rates for the most part are much less than those of 
the French tariff .^^ 

The consumption duties fall on sugar,^^ alcohol, and tobacco. 
The tax on sugar takes the form of a customs duty, and its rate was 
placed in 1904 at 10 francs per 100 kilograms of refined sugar con- 
tained in the raw product, and 12 and 13.90 francs for refined and 
candy sugars. This tax^ therefore, combined with the octroi (then 
15 francs) brought the total imposts on these various grades of sugar 
to 25, 27, and 28.90 francs. The French refining tax of 2 francs per 
100 kilograms on refined sugar is not collected in Algeria, where 

13 But with exceptioBs. Decree of Feb. 21, 1919, and Feb, 1, 1920. 

!>' Table C of the French tariff gives surtaxes applicable to products of European countries imported 
from a coimtry^ other than the country of production. 

3« Table D gives surtaxes applicable to products of a non-European country imported from a country 
in Europe. 

21 The governor retains the power to make changes subject to ratification by the legislature within a year. 
Pallain: Op. cit.. Vol. I, p. 186. 

'22 The list and the rates have been almost unchanged for many years. From Jan. 1, 1919, the rate of 25 
francs per 100 kilos of sugar superseded that of 15 francs. 

23 A decree oi Dec. 31, 1919, imposes a coasumption duty of 320 Irancs per kilo upon saccharine aa<3 
other artificialsweeteaers. 



182 COLONIAL TAEIFF POLICIES. 

there are no refineries. The Algerian rates, however, were almost 
identical with the taxation in France — including this refining tax — 
for aside from the surtax on foreign sugars all sugars paid there 25, 
27, or 28.75 francs per 100 kilograms, according to grade. Since 
sugar from France pays in Algeria the same consumption duties 
as in France, sugar refined in bond in France and released for consump- 
tion in Algeria does not pay the French consum.ption tax required 
of the like product released for consumption in France. 

The consumption tax on tobacco is graduated according to the 
retail prices of cigars, cigarettes, and other tobacco.-^ Alcohol and 
alcoholic beverages paid before the war an octroi of 50 francs per 
hectoliter of pure alcohol and a consumption duty, 127 francs in 
1892, increased in 1912 to 167 francs, plus a surtax of 1 franc. The 
total of these was thus verv close to the French consumxption tax 
of 220 francs.2f 

Transportation in FrencJi snips is required. — Article 1 of the law of 
April 2, 1889, reads '^ navigation between France and Algeria may 
be effected only under the French flag.'' In October, 1893, this law 
went fully in force. It was amended in 1909 by a provision which 
allowed trade in foreign vessels in case of the stoppage of French 
shipping b}^ strike or other emergency. Because of war conditions 
the law of 1889 was suspended by decree of May 29, 1915, and this 
suspension was later extended for a period of two years after the 
war, i. e. to October 25, 1921.-^ Tunisian and Morocco vessels have 
now been admitted to this Franco- Algerian trade and to the rest of 
the French coasting trade." This bringing of the trade with Algeria 
under the rule for the coasting trade is the mxOst drastic limitation 
found in respect to navigation in the French colonial system, though 
less drastic provisions have in certain cases m.uch the same effect. ^^ 
Here there is a flat prohibition of the use of foreign vessels; in other 
cases — in the requirement of the use of French vessels in the Tunisian 
trade and in the rec[uirement of direct importation for goods bene- 
fiting from the minimum tariff or other tariff concessions — there is 
no actual prohibition, and foreign vessels may be freely used or in- 
direct importation employed subject only to the payment of the 
maximum tariff rates. 

Trade with Algeria being considered coasting trade, merchandise 
arriving in French vessels pays neither the registration (statistical) 
fees 2^ of the law of Januar}^ 22, 1872, nor the wharfage fees (droit 
de quai). 

Export duties and restrictions are few. — Disregarding the man^^ 
recent prohibitions due to the European war, and to the drought 

24 From Jan. 1, 1921, tlie rate has been 6 francs per kilo upon all manufactured tobacco, plus a graduated 
tax based on the retail price (tax included) of the more expensive brands. The additional rate on cigars 
is 25 per cent of the price in excess of 20 francs and not exceeding 45 francs per kilo,and 50 per cent, of the 
price in excess of 45 francs. 

25 Recent legislation has greatls' increased the rate — the decrees of Kec. 6, 1917, Nov. 29, 1919. and Dec. 
14, 1920, raised the tax successively to 290, 400, and 500 francs for the calendar years respectively following. 
The surtax was reduced from 1 franc to 10 centimes by decree of Nov. 15, 1918, and is continued at this 
rate. These consumption duties are payable on alcohols produced in Algeria, and when the rates are 
increased thedifferencein rate is collected in respect to stocks on hand. 

26 Law of October, 1920. In France hostilities terminated officially on Oct. 24, 1919. The coasting trade 
of Algeria is reserved to French vessels, except as authorized by the governor general of Algeria. Law 
of May 19, 1866, Pallain: Op. cit.. Vol. IV, p. 233. 

2' Ibid. 

28 Seep. 159. 

28 The statistical fee was 10 centimes on each cask, sack, or other package , on each head of animals, and on 
eachl,OOOkilogramsorcubicmeterofbulk articles; it was raised by the law of Apr. 8, 1910, to 15 centimes, 
with exceptions. (Moye and Nogaro: Op. cit., pp. 18.5, 186.) The law of June 29, 1918, raised it to 20 cen- 
times, to which the law of Aug. 25, 1919, added 5 centimes as a "tax for the development of foreign com- 
merce." (Circulaire, S6rie G^n^rale, No. 55.) 



FRANCE. 183 

of 1920, the restrictions on exportations are not numerous. The 
only export duty of long standing is that on phosphate of lime, 
which pays 50 centimes per ton.^^ Prof. Girault speaks of this as 
a purely fiscal tax,^^ and the American consul states that it is levied 
on phosphate of lime because practically the whole product is ex- 
ported, and therefore the tax is most easily collected as an export 
tax. ^2 

During 1913 there was a temporary prohibition on the exportation 
of ewes less than 5 years old; this was renewed by decree of -March 
7, 1914, for five years, to be effective, however, only in the second 
half of each calendar year. The export of young date trees (variety 
Deglet Nour) has also been limited, but by administrative action 
rather than by lawo 

Algerian exports to Fromce o^re free, — Under the laws of 1851 and 
1867, Algerian products entered France free, if imported directly; 
so also did foreign goods nationalized by the payment of duty in 
Algeria, unless the special Algerian tariff w^as less than the French, 
in w^hich case the difference was collected in France. 

Table E of the tariff of 1892 imposed on colonial products from the 
French possessions either the full French duties, as in the case of 
sugar, or one-half thereof, as in the cases of coffee, cocoa, and spices. 
After some changes in the rates, the items in this table were reduced, 
in 1913, to sugar, sugared products, and pepper. But a special 
paragraph of Table E provides that "bonbons, sweet biscuits, pre- 
serves, candied fruits, [and] sweetened condensed milk, of Algerian 
origin, shall be admitted free of duty." 

The sales tax imposed by the law of June 25, 1920, carried with it 
as a compensatory duty, a special duty upon all imports except those 
subject to the luxury taxes. This duty was applicable to imports 
from Algeria, according to a ruling of the French Minister of Finance. 
Its rate was 1.1 per cent of the value of the article in France, duty 
paid. 

The prohibitions or restrictions of the French tariff in the 
interest of public order apply to Algerian goods. For instance 
tobacco, matches, and playing cards may not be imported into 
France, and even the tobacco of the French Government monopoly, 
sold in Algeria at special rates, may not be reexported to France. 

DIFFERENTIAL FEATURES — SUMMARY. 

Summing up the discriminations found under the seven heads 
enumerated above: — trade between Algeria and France, and be- 
tween Algeria and the assimilated colonies is free of customs duty. 
Exports from Algeria to the nonassimilated colonies also enter free. 
The only duties paid in all this trade are certain consumption duties 
which fall on only half a dozen articles in France, on a score in 
Algeria, and on nearly all of the articles of the tariff schedules in 
some of the colonies. In all cases these duties are paid also by all 

30 Export duties (a "production tax, leviable only on exportation") limited to the two years from Jan. 1, 
1916, were put on grains, fruits, animals, wine, iron ore, etc. — 23 items— according to a decree of Dec. 2S, 
1916, J, O., Dec. 31, Circ.4752, Jan. 11, 1916. Export duties in place of embargoes were placed upon horses, 
asses, and mules by decree of Aug. 4, 1920. 

»i Girault: Op. cit.,p. 259. 

32 It may be noted that about seven-eighths of the export is to countries other than France; but phos- 
phates are so commonly subjected to export duties or royalties that the destination is without significance; 
and see p. — for the incidence of export duties. 



184 COLOITIAL TAEIFF POLICIES. 

foreign goods. Algeria as a preferential market for the products of 
France and of the assimilated colonies is protected by the full French 
tariff, both general and minimum, except for Algeria's lower tariff 
on coffee, spices, and tobacco. Algerian goods in the French jnarket 
and ill the assimilated colonies are also protected by the full French 
tariff^ except for the special reductions estabhshed b;;^ decree in the 
tariff of the assimilated colonies. Algerian goods in the special 
regime colonies are protected by their special tariffs, lower than the 
French. 

The carrying trade between France and Algeria is confined (except 
in emergencies) to French ships, and direct transportation is required 
for all goods between Algeria and the assimilated colonies, except 
those which would be admitted free from any source. 

The system exhibits the following elements of commercial equality: 
Imports from the nonassimdated colonies pay the same duties in 
Algeria as goods from foreign countries which are entitled to the 
m.inimum tariff, except that the increases made in the minioium 
tariff in 1910 do not apply to colonial imports. Algerian goods 
receive no preference in the open-door colonies. Throughout the 
system consumption duties are paid equally on goods of every origm. 
The consumption duties, of Algeria, liowever, do not fall on any of 
the characteristic French exports, except alcoholic drinks, which 
are almost universally taxed for purposes of revenue, and sugars, ia 
regard to which a substantial differential is expressed in the customs 
duty. The only export duty levied in Algeria is not discriminatory 
in law, but it falls on an article the great bulk of which goes to coun- 
tries other than France. 

THE PEOTECTOEATE OF TUNIS, 

COMMERCIAL IMPORTANCE. 

In total commerce, Tunis takes its place among the French colonic 
far behind Algeria and Indo-China, and in recent years it has been 
passed by Morocco. Its total trade before the War w^.s only one- 
half that of Indo-China and one-fourth that of Algeria, Its popula- 
tion is in the neighborhood of 2,000,000, and of these only about 
50,000 are classed as French, The Jews number about 50,000. Ia 
1913 the other foreigners numbered 126,800, of whom 112,000 were 
Italians. 

TARIFF HISTORT ESTABLISHING OF DIFFERENTIAL TARIFF. 

Tujiis became a French protectorate in 1881, but Tunisian treaties 
in force with a dozen countries prevented any preferential commercial 
arrangements at that time. In 1896 and 1897, by new treaties or 
declarations on the part of Austria-Hungary, Italy, Eussia, Switzer- 
land, Germany, Spain, Denmark, England, Sweden and Norway, 
Holland, and Greece,^^ the French Goverinnent swept away practi- 
cally^^ all the restrictions upon the Tunisian tariff system, except 
the obligation under the most-favored-nation clause that the rates 

33 Documents Diplomatic] ues; Eevision des Traites Tunisiens^ 1881-1897. 

8i Cottons from the British Empire were guaranteed a rate not exceeding 5 per cent until 1912 and for six 
months subsequent to the denimciation of this provision. This denimciatioa did not take place trntil 
Mar. 10. 1919. Tunisian imports of British cottons ^ere, In 191^, 25,116 quintals and in 1920 only 10,83a; 
while imports from France in 1920 were about three times as great as in the preceding year. L'Afiiqne 
Francaise, Sept., 1921, Sup. p. 208. 



rsAis^cE. 185 

should be equal for the products of all countries other than France, 
Accordingly the Bey's Government issued decrees on May 2, 1898, 
naming duties on 829 import items and 13 export items, following 
in general the classification of the French tariftV^ ^^^ creating a free 
list for French goods, including Algerian, but not for colonial goods. 
Imports from France were required to come by direct transportation 
and with special certificates of origin. ^ ^Directly, " however, was 
interpreted in a circular of October 1, 1899, to mean only that the 
goods should not have been transshipped in a foreign port nor the 
vessel have been loaded with any similar goods in any port of call 
other than French and Algerian.^^ 

FEATURES OF THE TARIFF SYSTEM OF TUNIS. 

Tunis has had since 1898 a protective tariff based on the French 
schedules of classification and protecting French industry. The 
rates were largely those of the French minimum tariff until June, 
1921, when the French maximum rates were put into force in nearly 
all the schedules. The general free list includes raw materials and 
agricultural implements, and there is a special free list for French 
products including some of the chief classes of French manufactures. 

There is a short list of export duties. The chief Tunisian exports 
have been granted since 1890 free entry to France, or, in the case of 
wine, a reduced rate. 

No tariff favors are extended either unilaterally or reciprocally in 
the trade between Tunis and the other French possessions except in 
that with Algeria. 

Mo/ny products from France and Algeria enter free. — One of the 
decrees of May 2, 1898, enumerated the articles of French or Algerian 
production which should enter Tunis free, if imported directly. The 
list included living animals, wools of all kinds, silks, sugars, olive oil, 
linseed oil, castor oil, wines, brandies, liquors and pure alcohol, 
metals, yarns and textiles, embroidery and clothing, engines and 
machines, works in metal, jewelry and v/atches, carriages, rigging 
and metal and textile apparatus for boats — in a word, ^'nearly all 
the products of the great metallurgical and textile industries. "^^ 
The list remained the same in 1914 except that there had been added, 
in 1900, butter; in 1904, dynamite and all explosives other thaii 
gunpowder; and in 1907^ beans. In 1912, Tunisian imports from 
France and Algeria to the value of 98,000,000 francs paid duties of 
1,482,000 francs, or an average rate of 1.51 per cent. Imports from 
other countries valued at 68,300,000 francs paid duties of 6,365,000,^® 
or 10.9 per cent. 

Rates on foreign goods, — ^The older Tunisian tariff had contained 
a general rate of 8 per cent, the maximum allowed by the British 
treaty of July 19, 1875,^® and in 1898 this rate was retained in many 

S5 The revision of 1914 followed somewhat more closely the French classification of 1910. 

38 This last clause was added by a decision of Aug. 4, 1906. See introduction to the Tarif des Droits de 
Douane, issued by the Tunisian Direction Generale des Finances, 1914, This publication gives the addi- 
tional import duties, the export duties, the proliibitions, etc. 

" Arnaune: Op. cit.,p. 400. 

ssGirault: Op.cit.,pp. 268, 272. 

33 Art. 7. The treaty provided for the free importation of agricultural macliinery, forbade monopolies 
and prohibitions of exports, etc. Other nations shared these benefits through the operation of most-favored- 
nation clauses in their treaties. See Documents Diplomatiques, cited above. 



186 COLONIAL TARIFF POLICIES. 

schedules. But to the greater part of the manufactured articles the 
rates of the French mmimum taruf were applied, thus giving the 
French the same protection in the Tunisian market as at home, since 
these articles for the most part were the ones admitted free from 
France. Lower rates than the French minimum were also to be 
found; and there was a considerable free list. 

The tariff of 1914 consolidated minor changes made since 1898, 
and substituted specific rates for practically all items previously 
appearing at 8 per cent ad valorem*^. Some points in which this 
tariff differed from the French may be noted. Chemicals, paper, and 
many articles of food and drink, and of v/ood, stone, leather, rubber, 
asbestos, felt, and rattan, formerly paid 8 per cent and now appeared 
at rates generally one-half to one-third as great as those of the French 
minimum tariff. Watches paid 1 per cent, or J per cent. In many 
schedules, e. g., in the schedules covering pig and bar iron, yarn, 
engravings, and machine parts, the classification was not carried so 
far as in the French tariff, and the lower rates of the articles less 
advanced in manufacture applied to the whole schedule. Live ani- 
mals had lower rates than in France. A very few items, e. g., olive 
oil, had rat^s higher than in France. ^^ To the list of articles free 
in the French tariff schedules there were added in Tunis tools, 
agricultural implem.ents, scientific apparatus, and various materials 
which have had but little labor applied to them. For instance, 
applied to cotton, any operation beyond ginning, subjects the 
commodity to a duty under the French tariff; Tunis admitted 
cotton free after it had been bleached, washed, and dyed. Many 
of these differences were due, not to the failure on the part of the 
Tunisian Government to adopt the French schedule in 1898, but to 
changes in the French classification and rates, since that time, 
chiefly in 1910. This explains, e. g., the differences in cotton just 
mentioned and practically all the diSerences in irons and machinery 
parts referred to above. But changes in the French tariff have often 
been reflected promptly in the Tunisian tariff, e. g., the increase 
of the rate on automobiles to 70 per cent ad valorem in 1916, and its 
reduction for machines weighing less than 2,500 kilos to 45 per cent 
by Tunisian decree of January 5, 1920. 

A further step toward complete assimilation of the tariffs of France 
and Tunis was taken on December 19, 1919. By decree of this date 
the rates of the French minimum tariff were made applicable to the 
Tunisian schedule of cotton fabrics, instead of the ad valorem rate 
of 5 per cent stipulated in the Franco-British treaty of 1897. 

During the war and the reconstruction period the control of trade 
by means of embargoes, prohibitions, and licenses was even more 
effective than the assimilated tariff schedules in reserving colonial 
trade to the French. While certain of the embargoes upon exporta- 
tion aimed at the preservation of necessary supplies in Tunis and 
prohibited exportation even to France most of the embargoes 
related only to countries other than France. 

^0 The Tunisian Government affirms that these specific rates are the exact equivalents of the old ad 
valorem rates on the basis of the average prices for the three years preceding 1914. Tarif des Droits de 
Douane, 1914, p. III. 

<i The treaty of Sept. 26, 1896, mth Italy, forbade rates higher than those of the French minimum tariffs, 
except on oils and oil seeds, until Oct. 1, 1905. There has been no general revision of the tarifi since then, 
except as above stated. 



PEANCE. 187 

By a decree of May 19, 1920/^ merchandise of German origin was 
made dutiable at the rates of the French general (maximum) tariff 
as raised recently by means of coefficients of increase. The differ- 
entials against German goods as compared to other foreign goods 
were thus the differences between rates equal to or lower than the old 
French minimum rates and the old French general rates multiplied 
by 2, 3, or some other coefficient, as described on page 155. Further, 
the French surtaxes upon the indirect importation of European and 
non-European goods are imposed in the case of goods of non-Ger- 
man origin imported through Germany. 

While coefficients of increase have not been used in Tunis except 
for German goods, the protection afforded to French products was 
gvesitlj increased in June, 1921, by applying to foreign products the 
new and higher rates of the French maximum tariff contained in the 
decree of March 28, 1921 (see page 156). 

Additional duties fall equally on French and on foreign goods. — No 
less than five other taxes are collected by the customs administra- 
tion in Tunis, all of which, like the octrois de mer in the French 
colonies proper, fall on French as well as on foreign goods; and 
indeed the products of Tunisian fisheries and vegetables carried in 
the coasting trade pay also to a certain extent. The duty called 
droit de consommation falls on alcohols, sugars, petroleum, ^^ coffee,^* 
explosives, and the vegetable fibers called alfa and diss. The droit 
d'entree falls on wool, camels' and goats' hair; butter, vegetable 
oils, and animal wax; fruits and grains; fish and shellfish; firewood^ 
etc.; tanning stuffs; stone, bricks, tiles, cement, and pottery. The 
circulation tax falls on peas and other dry vegetables, sorgho and 
holba, at 25 or 35 centimes per 100 kilograms net. The tax of 1.70 
francs each on mechanical lighters is called a taxe interieure. There 
is also an inspection fee or taxe sanitaire on farm animals, fresh or 
salted meat, and raw hides, not exceeding 1 franc per head or per 
100 kilograms. 

Some of these additional duties are upon articles not taxed by the 
regular customs duties (grains, wool, some tanning stuffs) and some 
are higher than the tariff rates,*^ but the majority are considerably 
lower. 

Foreign products receive no preference by reason of having paid a 
duty in France; and goods from French colonies are treated as 
foreign. 

ProJiihitions are comparatively numerous. — The restrictions and pro- 
hibitions on imports, even before the war increased them tenfold, 
were comparatively numerous. They were chiefly on arms and 
munitions of war, powders except in cartridges, salt, tobacco and 
several other drugs, matches, playing cards, pirated books, certain 
kinds of wines, and an extensive list of animals and vegetables which 
were admitted, if at all, only after careful sanitary inspection. Ani- 
mals, plants, arms, explosives, and wine might be imported or ex- 
ported only through a few ports, enumerated for each article. 

Export duties and restrictions are few. — Export duties are levied on 
a few articles, chiefly the following: Olives, 4 francs per 100 kilograms 

^2 Journal Officiel Tunisien, June 26. Quoted in L'AMque Frangaise, July, 1920, p. 253. See also 
Board oi Trade Journal, Sept. 22, 1921. 
" Added Jan. 1, 1920. 
" Butter from countries other than France pays a duty of 6 francs and a droit d'entree of 10 francs. 

185766°— 22 13 



188 COLONIAL TARIFF POLICIES. 

net; olive oil, 9.50 francs per 100 kilograms net>^; hides and skins, 
16 to 24 francs per 100 kilograms net*^; colts, 50 and 75 francs each. 
The duty levied on exports of fish (other than tunny and botargo) — 
2 francs per 100 kilograms — is distinguished by being designated a 
statistical fee. Similarly, phosphates and superphosphates pay ^^ex- 
traction" duties of 50 and 25 centimes per ton^^; and iron ore pays a 
tax representing 5 per cent ad valorem, f. o. b. at the port of de- 
parture, but with a limit for each mining company, so that the 
amounts paid per ton vary; none exceed 50 centimes per ton. 
Vegetabies pa}^, on exportation, if they have not already paid it, the 
droit de circulation, and alfa and diss pay the droit de consommation; 
farm animals, meat, and hides pay the same inspection fees as upon 
importation. Two differential features have recently been Intro- 
duced into the Tunisian export schedules. The export duties on 
live stock are no longer levied upon exports to France and Aigeria,^^ 
and the 2 per cent ad valorem levied upon lead ore by the decree of 
May 16, 1917, v/as never exacted when France was the destination. 
The export of gravid cows and ewes, of game (except boars and 
animals for collections), and of the offshoots of the deglas date *^ is 
prohibited. No antiquities may be taken from the country without 
special authorization. 

TREATMENT IN FRANCE OF IMPORTS PROM TUNIS. 

The inauguration of the French protectorate over Tunis in 1881 
did not operate to bestow on Tunisian products even most-favored- 
nation treatment. The French colonists in Tunis obtained no con- 
cession until 1890, at which time their most important products — 
chiefl}^ grain, olive oil, and animals — were admitted free. A special 
tariff was established for their wines. ^° Other products, except those 
named in Table E of the tariff,^^ obtained the lowest rate payable by 
similar foreign products, i. e., now, the minimum tariff. The follow- 
ing five conditions Vv^ere attached to this extension of tariff favors to 
Tunisian products and are, with slight m^odification, still in force : 

(a) The goods must be accompanied by certificates of origin. 

(b) They must leave from one of ten ports named (now increased 
to eleven). 

(c) They must come ''dh"ectly and without call from Tunis to 
France." This is interpreted, however, to allow calls at Corsican or 
Algerian ports, and regular lines are allowed to transfer cargoes from 
one vessel to another under certain conditions. ^^ 

^s Rates in effect from Jan. 1, 1920. The previous rates on hides and skins -were 4 to 6 francs. 

<6 In January, 1920, a surtax of 2 francs per metric ton was imposed on phosphates, with propor- 
tionate rates on superphosphates. 

In 1912 the chief exports ranked as follows in millions of francs: Phosphates, 48; iron ore, 9; lead ore, 9; 
zinc ore, 5.2; olive oil, 21; wheat, 4.8; vegetable fibers, 4.2; hides, 3.5; dates, 1.4. The phosphate and the 
mineral industry has developed since 1890. The products named below were the most important exports 
at that time. 

« Commerce Reports, Sept. 10, 1920, p. 1182. 

^8 By decree of Feb. 4, 1914. 

*^ Wines from fresh grapes : Of an alcoholic strength of 11.9° or less, per hectoliter, francs O.CO (not includ- 
ing the internal revenue tax); of a superior strength, the foregoing duty plus 70 centimes for each degree 
above 11.9°. This last is the equivalent of the minimum duty on alcohol. 

60 The law of Aug. 5, 1913, reduced Table E to sugar, sugared products, and pepper. These do not 
appear among the exports of Tunis to France and the failure of the law to specify their status appears 
immaterial. 

51 Introduction to Tarif des Droits de Douane, 1914. Pallain: Op, cit., Vol . I, pp. 629, 194. 



PRAN^CE. 189 

(d) The goods must come in French ships,^^ It should be noted 
that all these conditions are attached not only to the products ad- 
mitted into France free as a special favor^ but also to those admitted 
at the minimum tariff. Thus, importation in foreign ships or indirect 
transportation in French ships is penalized in the case of all goods 
imported into France from Tunis except in the case of goods on which 
the French tariff exacts no duty, or on which it m.akes no distinction 
between the general and the minimum rate, or in the case of a product 
which, because the quota allowed on that article for that year has 
already been exceeded, is no longer entitled to the exemption or to 
the minimum tariff, as the case may be. 

(e) The first three articles" of the law of July 19, 1890, grant re- 
spectively to limited quantities of Tunisian goods entering France 
either free entry or a special tariff rate or m-ost-favored-nation treat- 
m.ent. The quantities to be admitted are determined yearly by 
decrees issued by the President of the Republic upon application 
jointly by the Ministers of Foreign Affairs, Finance, Comm.erce, and 
Agriculture.^^ These decrees assign separate quantities for the difl'er- 
ent products specified in the law, and a limit is then set to the value 
of all other Tunisian products which may be imported at the minimum 
tariff. 

In 1904 a second decree was issued increasing the amounts already 
fixed as the limit for wheat and barley. Objection was made that the 
object of the law had been only to allow the Tunisians to sell their 
surplus in France, but that the quantities named in this second 
decree allowed them to sell all of their produce and to import foreign 
cereals, untaxed, for their own consumption. A change was there- 
fore miade by v/hich France adm.itted Tunisian cereals free without 
limitation of quantity, and the Bey adopted the rates of the French 
m.inimum tariff on cereals imported into his possessions. The sam.e 
assimilation of the French and Tunisian tariffs took place in 1907 m 
regard to beans^ except that the quantity admitted to France remains 
limited. In the spring of 1914 refrigerated meat was added to the 
list of Tunisian products entering France free in limited quantities, 
i. e., a part of the total quotas of cattle, sheep, or hogs might enter 
as beef, mutton, and pork. By the decree of November 15, 1919, 
the whole quotas of these animals might be imported either on the hoof 
or as refrigerated meats.^^ In 1915, oranges, mandarins, lemons, 
cedrats, dates, bananas, almonds, carobs, potatoes, and muscat 
grapes were added to the list.^^ By decree of April 21, 1916, a duty 
was imposed in France of 13 centimes per kilo on lead ore and 35 
centimes per kilo on pig lead and by the same decree lead or lead 
ore from Tunis was granted free admission up to a limit of 80,000 
quintals every three months. 

&2 Suspended by decree of Nov. 27, 1915. Oirc. 4741, 

^ The decree of Feb. 6, 1919 was issued on the proposal of the Ministers of Foreign Afiairs, Finance, Com- 
merce and Industry, Posts and Telegraphs, Maritime Transportation and Merchant Marine, Agriculture, 
and Supply (Ravitaillement.) 

54 The earlier iav.^ also permitted the whole quotas to come in as meat if it were so specified in the decree 
fixing the quota for the year; but this was not done until the decree of Oct. 26, 1919, which fixed the 
quota for 1919-20. The decree of Nov. 15, 1919. accordingly adopts this change as permanent policy. 
The decree states that the change was proposed by the resident-general of Tunis on the request of the local 
chamber of commerce. 

65 Law of Nov. 29, 1915. But potatoes and muscat grapes were not to be admitted during the French 
season for the article in question. The reduction of duty was not at first made effective except for grapes. 



190 



COLONIAL TAEIFF POLICIES. 



The commodities and the quantities specified by decree for admis- 
sion from Tmiis free or at a special rate in the years 1905-08, 1914-15, 
and 1919-20, are given in the following table: 

Table 7. — Quantities of Tunisian products authorised to enter France free or at special 

rates, for specified years. 



Article. 


Unit. 


190.5-6 


1914-15 


1919-20 


Beans 


Quintals 

Head 


160,000 

1 1, 500 

1, 500 

25,000 

100, 000 

1,000 

1,500 

1 20, 000 

8.000 

6, OOO; 000 

5 200, 000 

8 12, 000, 000 


2 80,000 

2 1, 300 

1,300 

24,000 

50,000 

1,000 

5,000 

2 1, 500 

8,000 

10, 000. 000 

6 250, 000 

s 20. 000. 000 

11 50,' 000 

750 

2 1. OuO 

'lOO 

2 2,000 

140 


(3) 


Horses 


n,300 




do 


1 200 


Cattle . 


do 




Sheep 


do 





Goats . . 


.. do 


r 000 


Pigs 


do 




Game 


Kilograms 


^ 1 500 


Birds 


8^000 
U5, 000, 000 

7 300,000 
ic 30, 000. 000 

3 lOO; 000 


Articles admitted at the minimum tarifi 

Wine of fresh grapes 


Value in francs.. 

Hectoliters 

Kilograms 

/Head 


Olive oil 


Refrigerated mutton 


\Tons 

/Head ! 

\Tons 1 


Refrigerated beef 


1,500 
25,000 




2,500 
7,000 


Refx-igerated pork 


/Head 




\Tons 





490 


Muscat grapes 


Quintals 




12 25,000 

13 50,000 
10,000 


Oranges 


do 






Mandarins 


do 


■ ■"■ 




Lemons 


do 






5,000 


Cedrats 


... do.. . . 






1 000 


Carobs 


do 






12,000 


Bananas 


do 






500 


Dates.... .... 


do 







iU5,000 


Lead or lead ore 


do 






15 320, 000 











1 Decree of July 4, 1905, for year ended Jime 1, 1906. 

2 Decree of Juiie 16, 1914, for year ended May 31, 1915. 

3 No decree relating to beans has been found for 1919-20. 

4 Decree of Oct. 26, 1919. for year ended Mav 31, 1920. 
6 Decree of Aug. 15, 1915, for year ended July 31, 1906. 
« Decree of Nov. 6, 1914, for year ended July 31, 1915. 
f Decree of Feb. 6, 1919, foryear ended July 31, 1919. 

8 Year ended Oct. 31, 1906. 
s Year ended Oct. 31, 1915. 

10 Decree of Oct. 15, 1919, for year ended Oct. 31, 1919. 

11 Decree of May 27, 1914, for year ended May 31, 1915. 

12 Decree of Oct. 26, 1919, for year ended May 31, 1920, but with a closed season from Sept. 16 to Oct. 31, 
inclusive. 

13 Decree of "Feb. 6, 1919, for year ended July 31, 1919. 

i< Decree of July 31, 1919, for year ended on that day. This decree raised the quota of 15,000 fixed m 
the decree of Feb. 6. 1919. 
15 Decree of Apr. 21, 1916, fismg the quota at 80,000 quintals for each three months. 

This free admission of Tunisian products has met with considerable 
opposition from French agricultural interests. They point out that 
the annual determination of the quantities to be admitted has been 
no real limitation — as soon as the total specified is reached its amount 
is increased. ''Tunis is predominantly an industrial country; agri- 
culture has developed there only slowly, and rare have been the years 
when it has sent us the quantity of products provided for in the 
annual decrees.' ' In spite of the promise made by M, Ribot, minister 
of foreign affairs, when the law of 1890 was under discussion, that the 
entry of wine at the special rate would not be authorized at a quan- 
tity exceeding three-fourths of the Tunisian product, it vvould appear 
that 1898 was the last year in which the quota was less than the total 
production. In view of the increased plantings in Tunis and because 
the quota of wine had been nearly reached in 1911, the agricultural 
interests of France brought forward a bill to limit the importation of 



FRANCE. 191 

Tunisian wine to 200,000 hectoliters annually — the figure at which it 
had stood in most (perhaps all) of the years from 1901 to 1911. At 
this moment the Government increased the quota to 250,000 hec- 
toliters. Other products furnish similar illustrations of the way in 
which the quotas have kept ahead of production. Up to 1911 Tunis 
exported no hogs to France; the quota was fixed at 1,000 head; in 
1911 there was an exportation of 123 head and in 1912 of 2,242 head; 
and for 1913 the quota was raised to 3,000.^^ 

THE DIFFERENTIAL FEATURES — SUMMARY. 

To sum up, a very considerable body of French and Algerian goods, 
including, among others, '^nearly all the products of the great metal- 
lurgical and textile industries," enter Tunis free, whereas the great 
bulk of foreign manufactured goods pays in Tunis the rates of the 
French minimum tariff although many foreign articles pay a lower 
rate ^^ than the French minimum tariff and there is also a consider- 
able free list. Moreover, because of a less detailed classification of 
goods in the Tunisian than in the French tariff and of the application 
of the rates for goods less advanced to those which are more advanced 
in the process of manufacture, the tariff differential in Tunis is not so 
great as in France. 

In addition to the customs duties there are various other charges 
more or less like the octrois de mer, which fall equally heavily upon 
French and upon foreign goods. In the case of these charges France 
has no differential advantage. 

There is a relatively long list of goods the importation of which is 
prohibited or restricted for reasons of social welfare. 

There is a short list of export duties, but these are not onerous. 
■ Tunisian goods imported into France are either free of import duty 
or, in general, pay the minimum tariff rates. By exception, wines 
from Tunis have a special low rate. To enjoy the advantage of the 
minimum tariff rate in France, goods from Tunis must have their 
origin properly certified, must depart from certain specified ports, 
and must be shipped ''direct" to France in French ships. Decrees 
issued by the President of France set limits to the quantities of speci- 
fied products v/hich may be admitted in a given year free of duty or 
at special rates, and to the total value of the products to be admitted 
under the minimum tarift". 

THE NONASSIMILATED COLONIES. 
CLASSIFICATION OP NONASSIMILATED COLONIES. 

The usual classification of the French colonies into assimilated 
and nonassimilated, however sufficient from, the point of view of the 
legal provisions controlling the situation, is inadequate for a pre- 
sentation of the actual tariff differences. It affords no indication of 
the peculiarities of the Tunisian tariff, and makes no distinction 
among the nonassimilated colonies v/hose tariff systems are by no 
means uniform. In all, it may be noted, the tariffs are established 

*8 Barthe, Ed.: Rapport * * * Regime douanier des Produits Marocains importes en AIg6rie, 
pp. 62 fl. 
6' Approximating txie older Tunisian 8 per cent ad valorem rate. 



192 COLONIAL TAEIFP POLICIES. 

by decree, but in some the Government actually has a free hand 
continuoush", while in others it is bound for certain periods by treaties; 
some have special regimes in which certain preferences are afforded 
to French trade; others are open-door colonies where ail countries 
enjoy equal commercial opportunities. Specific all}^, in West Africa, 
Oceania, and St. Pierre and Miquelon, special tariffs are instituted 
by decree; in Morocco, the Congo Basin, Dahomey, the Ivory Coast, 
and the New Hebrides, the open door is guaranteed by treaties; in 
Somaliland, Kvv^angchow Wan, and French India the open door and 
free trade are established by decree.^^ 

GENERAL TAEIFF POLICY. 

Tlie law. — Article 3 of the law of January 11, 1892, after establish- 
ing Table E for the products of the assimilated colonies imported into 
France, continues: 

The French, territories of the western coast of Africa (with the exception of Gaboon), 
Tahiti and dependencies, the French settlements in India, (and) Obock [i. e., French 
Somaliland], * * * are excepted from the stipulations of Schedule E. Long- 
cloth of French origin coming from the French settlements in India shall, however, 
be free of duty. Exemptions from or reductions of duty may, in addition, be gi'anted 
for other natural or manufactured products originating in the above-mentioned settle- 
ments in accordance with the lists provided for each settlement by decrees issued by 
the Council of State. Natural or manufactured products originating in the aforesaid 
settlements, and for which no exemption or reduction has been granted, shall, when 
imported into France, pay the duties stipulated in the minimum tariff. 

General features — Products of nonassimilated colonies jpay minimum 
tariff rates in France and Algeria. — From the preceding paragraph it 
is apparent that the products of these nonassim.ilated colonies upon 
entry in France or Algeria pay the French minimum rates unless, in 
the case of imports to France, the Government has by decree granted 
exceptional reductions or exemptions, or, in the case of imports to 
Algeria, the special Algerian rates are lower than the minimum rates 
of the French tariff. The Government is not permitted, by provisions 
of the law, to impose rates higher than the minimum on goods from 
these colonies entering France; but it may grant rates lov/er than the 
minimum. The provision for the free entry of the longcloth of French 
India is exceptional in the legislation for nonassimilated colonies. It 
is not subject to change by decree. A similar exception is made in 
Nos. 90 to 95 of the French tariff schedules, in which the colonies are 
granted °^ in the text of the law a rate lower than the French m.ini- 
mum on their sugars and sugared products. At any time the Govern- 
ment may also be restricted by treaty provisions, such as that which 
until recently limited the preference that might be granted to colonial 
sugars. 

The Frencli Government estahlisJies hy decree special tariffs in iJie 
nonassimilated colonies. — The rates to be collected in these colonies, 
whether on French or on foreign goods, are not mentioned in the law 
of 1892, and they are thus left to be determined, according to the 
regime in force for decades, by decrees. The absolute control of the 
Government over the whole situation — to determine vv^hether there 

58 In the case of Somaliland and the French establishments in India (and apparently Kwangchow Wan') 
the French Government has indeed the power to decree special tariffs, but has used it to institute regimes 
not only free from all preferences but almost without duties of any sort. 

59 Note also the provision in article 7 of the law of Mar. 29, 1910, "that increases made in the French tariff 
at that time should not apply to tlie colonies until new decrees had been issued revising their tariff systems . 



FRANCE. 193 

shall be import, export, or transit duties, and whether these shall be 
high or low, differential or nondiscriminatory — is limited only by the 
necessity of asking the advice of the local councils before decreeing 
any changes. In practice the differential tariffs of the special regime 
colonies are made up of customs duties decreed by the French Govern- 
ment and imposed only on foreign goods, and consumption duties 
decreed only after they have been passed b}^ the local councils (with 
or without pressure) and imposed on all goods; but there is nothing 
in the law to prevent the tariff itself from containing maximum and 
minimum rates — as occurs in that of New Caledonia in the case of a 
score of articles — or from containing other kinds of differential pro- 
visions. Again, by treating the customs and consum_ption duties as 
parts of a composite measure^ as v/as done in regard to West Africa in 
1905, the Council of State, as the body of widest authority, may take 
full jurisdiction over both kinds of duty. In a number of cases, 
colonial tariffs have been regulated for specified periods of time hj 
treaties, but otherwise, except for occasional direct legislative action 
(presumably \ipon the initiative of the Government), the tariffs affect- 
ing the nonassimilated colonies are absolutely within the discretion 
of the Government in power in France, in respect both to colonial 
exports entering France ^^ and to foreign goods entering the colonial 
market. In addition, most of these decrees which grant reductions 
or exemptions from the French tariff have required the President, 
i. e., the ministers of colonies and of finance, to specify annually the 
quantities of goods that might enter under the privileged rates. The 
quantities specified have sometimes been varied widely, but the 
tariffs have been but little changed during the last 20 years. 

Intercolonial trade is free. — Intercolonial trade is free without regard 
to the respective classifications of colonies betv/een which goods pass, 
with the exception that from French India limited quantities of yarn 
and cloth — but these only — enter the other colonies ^^ free. 

Direct transportation is required for all goods for which special 
reductions or exemptions are to be claimed in the French or colonial 
market. 

Whenever special exemptions or reductions are granted to colonial 
products entering France, provision is made to prevent similar foreign 
goods gaining the benefit of these favors to the colony by shipment 
first to the colony and then to France. In these cases the foreign 
goods must pay, on entering the colony, either the full French tariff 
rate (in case the colonial product is exempt) or the difference between 
that rate and the special rate granted to the colonial goods. 

Where goods are admitted temporarily into France duty free in 
order to be further elaborated in manufacture, the manufactured 
goods if exported to these colonies are classed as French goods and 
enter the colony free.^^ 

^» I. e.j up to the limit of the minimum tariiT. 

61 Tunis, Morocco, and the New Hebrides are not "coionies" within the meanine; of this rule. 

62 Although ]f these goods had been sold m France they would have had to pay duty there on the foreign 
material contained in them. 

While treaties have been much more important m the history of the nonassimilated colonies than in 
that of the assimilated colonies, as none of the former have tariffs divided into maximum and minimum 
schedules, the question whether the commercial treaties which extend the minimum tariff of France to 
various countries do or do not include them, is of no interest. 



194 COLOISriAL TARIFF POLICIES/ 

THE TARIFF SYSTEMS OF THE NOXASSIMILATED COLONIES SUMMARIZED. 

The important features of the tariff policy of France in the open- 
door and special regime colonies may be summarized as follows: 

In Morocco and the Condominium of the New Hebrides the French 
have not been free to fix their own tariffs. In Morocco old treaties 
with individual countries limited the tariff rates to 10 per cent ad 
valorem and forbade discrimination. The act of the Algeciras con- 
ference, 1906, limited the rates to a total of 12 J per cent and further 
guaranteed commercial equality. ^^ In the New Hebrides, under the 
joint control of the two Governments, the necessity of satisfying the 
English free trade Liberals ^* limited the making of rates and the 
tariff was essentially for revenue only, though the rates on spices 
show clearly that the French influence has prevailed in part. 

In Equatorial Africa, West x\frica (Senegal and Guinea), Dahome^^, 
and the Ivory Coast there are simple tariff systems approximating — 
so few comparatively are the exceptions — a flat rate of 10 per cent or 
12 per cent upon all imports, but with the 12 per cent of West Africa 
(Senegal and Guinea) reduced for French goods to 5 per cent. These 
territories are all undeveloped and uncivilized as compared with Alge- 
ria, Tunis, Indo-China, and the older colonies, as may be seen from 
the figures of their commerce per capita. In the first of them the 
French had agreed to the open door in 1885, before the assimilation 
policy was applied to the colonies generally (1892) and at a time when 
their possession was none too secure. In Dahomey likewise they had 
agreed during the same period (1887) upon a common tariff with 
German Togoland. The existence of other colonies on the coast line 
of West Africa, competing for the trade of the common hinterland, 
was another reason for not including West Africa among the assimi- 
lated colonies, and for fixing a simple tariff system with rates moderate 
as compared with those of the French tariff. The treaty of 1898 vith 
Great Britain perpetuated the open door in Dahomey and the Ivory 
Coast. 

French Somaliland apparently had not at the time when the policy 
of assimilation was originally adopted (1892) enough trade to warrant 
the keeping of records, and so it was not included in the plan. More 
recently a considerable amount of the commerce of Abyssinia passes 
through Somaliland, and to levy a duty upon it would mean to deflect 
it through other channels. Accordingly no import duties are levied 
here. The French establishments in India must also rely commer- 
cially upon their transit trade with the continent behind them, and 
any duties which their tariffs might impose would be differentials 
against them as ports of entry. Their situation demands free trade, 
with such minor exceptions as fiscal requirements impose. 

In the small isolated colonies of Oceania, and in St. Pierre and 
Miquelon special tariff schedules are found, not indeed to be com- 
pared in length and complexity to those of France and Tunis, but 
very long as compared to the exceptions scheduled for the assimilated 
colonies. Their rates are very much lower on the average than the 

63 By the treaty of Versailles Germany lost her right to equality of treatment and discriminatory rates 
have been imposed upon German trade. 
6« In power after December, 1905, 



FRAKCE. 



195 



French, and the protection afforded to French trade is thus much less 
than in the assimilated colonies. ^^ 

In most of these colonies there are export duties. In the decade 
before the war, however, the long lists previously found in Equatorial 
and West Africa, including Dahomey and the Ivory Coast, had been 
cut down to 7 per cent on rubber in West Africa and 10 per cent on 
rubber and ivory in Equatorial Africa. Oceania levies export duties 
on copra, phosphates, and mother of pearl, but not on vanilla — her 
most important export and one of which only a small fraction goes to 
France. The duties on the exportation of mother of pearl from 
Oceania and -of hides from Somaliland were formerly differential, in 
that they were not levied on exports to France. Somaliland and 
Morocco have lung and varied lists of export duties. If any dis- 
criminations exist in any of these export duties they are carefully 
concealed; their prime purpose is obviously_ fiscal. 

The products of all of these colonies pay in France the rates of the 
minimum tariff, but concessions on one or more of their products 
have been granted to Senegal, Upper Senegal-Niger, Guinea, Da- 
homey, Ivory Coast, Congo Basin, French India, Oceania, and New 
Hebrides, respectively.^^ The longcloth of French India enters 
France free under the lav/ of 1892 (quoted on p. 192), but for the other 
colonies the exemptions are made by decree of the Council of State 
under the general power conferred by that law. 

The following table shows the date and the rate of these special 
concessions decreed for products of nonassimilated colonies on their- 
entry to France, Unless otherwise stated, the quantity so admitted 
is limited by a figure set by decree, annually, ''Not in effect" means 
that the decrees fixing the quantities have not been issued because, 
except in the case of maize, none or practical!}^ none is produced in 
the colony named. 

Tablp: 8. — FMte of special concessions for products of nonassimilated colonies entering 

France. 



Article. 


French tariff 

rate (1914) per 

100 kilos. 


Special colonial 
rate. 


Senega], Upper Sene- oninftn 
gal and Niger." Gu.nea. 


Palm, touloucouna, illiiDe 


1 franc 


Free in unlim- 
ited quantity. 
do 


June 30, 1892. .. .. Tune 30. 1S92. 


and paimiste oils. 
BuildiBg timber, cabinet 


Various, some 

free. 
136 francs 

416 francs 

5 francs 

104 francs 

3 francs . ... 

20 francs 

35 francs 

25 francs ... . . 


do 


Do. 
Do. 


woods, scented woods. 


58(124) francs.. 
208 francs 


June 30, 1892, not in 


Vanilla 


effect. 1 


Bananas 


Free . ! - --- 


Aug. 22, 1896. 
Sept. 14, 1898, not 
in effect. 




52(95) francs... 




Maize 


2 francs 


- 


Cattle 


Free . . 


Sept. 4, 1909 &.. 

Oct. 28,/1914 6....... 

. do..... 


Oct. 31, 1911. b 


Beef an'i ^iiutton 


do 

do 


Oct. 28, 1914. 6 


Sheep...., 


Do. 


Pineapples, 


3 francs 


do. 




June 26, 1920. 













a Now Senegal, French Sudan, and Upper Volta. 

'J Suspended by An-etes of Jan. 31 and Aug. 11, 1919, except as to sterilized products of these animals. 

65 In the case of St. Pierre and Miquelon this represents a concession made very recently (1912-1914J to 
colonial demands. 

65 That is, to all of the nonassimilated colonies, except Morocco, Somaliland and St. Pierre and Miquelon. 
Apparently, however, the fish of St. Pierre and Miquelon enter France free under the general designation 
of fish, the product of French fisheries. 



196 



COLOlSriAL TARIFF POLICIES. 



Table 8. — Rate of special concessions for products of nonassimilated colonies entering 

France — Continued. 



Article. . 


Dahomey. Ivory Coast. 


Congo Basin. 


Oceania. 


New Hebrides. 


Palm , touloueouna, illip6, 


June 30, 1892.. 
do. ... 


June 30, 1892 . 








and palmiste oils. 
Bmlding timber, cabinet 

-^^oods, scented woods. 
Coffee in the bean . . . . 


do 








June 30, 1892, 
not in effect. 


do 


Apr. 22, 1899, 
124 francs. 




Nov. 12, 1901 


Vanilla 


June 30, 1892. 


Do. 










Cocoa in the bean or shell. 


Aug. 17, 1907 . . 


Nov. 16, 1911- 


Apr. 22, 1899, 
95 francs. 




Nov. 12, 1901 


Maize 




Nov 12, 1901, 


Cattle 










not in effect. 


B eef and mutton 












Sheep 












Pineapples 

























The relative commercial importa.nce of these colonies, so far as 
that is shown by the figures for gross commerce, is indicated by the 
tables 2 and 4 oft pages 139 and 163. 



THE DIFFERENTIAL FEATURES SUMMARY. 

In the nonassimilated colonies the differential features are as fol- 
lows: In the special regime colonies (West Africa, Oceania, and St. 
Pierre and Miquelon) foreign goods pay special rates which French 
goods and French colonial goods do not pay. In West Africa the 
rate is generally 7 per cent; in Oceania rates of 8 per cent, 10 per 
cent and 13 per cent are common; and in St. Pierre and Miquelon 
the specific rates are considerably lower than those of the French 
minimum tariff, and articles not enumerated pay 8 per cent. 

The products of the nonassimilated colonies pay on entering 
France the m.inimum tariff rates, with the exceptions that (1) in- 
creases made in that tariff in 1910 have not been put in effect against 
them, (2) sugar from any of the colonies pays in France only the 
consumption duty, and (3) certain of their products, generally one 
or two for each colony, are allovfed, at least in limited quantities, 
special reductions or exemptions. This last-named exception is of 
some importance, especially in reference to the fostering of new cul- 
tures; but as to the first and second exceptions, the nonassimilated 
colonies are not the sugar producing colonies, and the increases of 
the minimum tariff in 1910 w^ere chiefly on manufactured goods and 
hence these exceptions did not greatly affect the exports from these 
colonies. 

Direct transportation is required for all of these goods for which 
the benefit of special provisions is to be claimed. Foreign vessels 
may transport any of the trade between France and the nonassimi- 
lated colonies. They may even transport indirectly and without 
penalty for the indirection some classes of certain origin or destina- 
tion, namely, all imports into the open-door colonies, imports on the 
free lists of the special regime colonies, and imports into France 
which are entitled to enter free or at a single rate of duty regardless 
of origin. 



FRANCE. 197 

Most of the products of these nonassimilated colonies pay in France 
the minimum tariff rates, which are those paid by most foreign 
products. 

To a noteworthy extent there is in the tariff systems of the non- 
assimilated colonies equality of treatment of French and foreign 
goods and shipping. Foreign goods entering the special regime 
colonies encounter more extensive free lists than are found in the 
assimilated colonies, while there are in the open-door colonies no 
discriminations at all in import duties. In none of the colonies is 
there any discrimination in the imposition of consumption duties 
or of export duties. 

Tariffs of Nonassimilated Colonies, Individually. 

special segime colonies — french west africa (senegal and guinea). 

Commercial importance. — The colonies of Senegal, French Sudan,®®® 
French Guinea, Dahomey and the Ivory Coast — to name only the 
provinces which have separate customs statistics — form French 
West Africa. Free trade was established among these colonies in 
1902 and a general government was instituted in 1904, which 
includes among its functions the collection of all the duties, though 
these duties are not uniform. The population of this immense ter- 
ritory, almost half the area of the United States and its possessions, 
is estimated at 11,456,000, including 7,500 French and 1,000 other 
non- Africans. In 1919 the total trade was 616,000,000 francs, of 
which Dahomey and the Ivory Coast— which have one-fifth of the 
population — were credited with 167,000,000 francs. 

Tariffs in West Africa — Two types. — A uniform tariff is a natural 
concomitant of the presence of a consolidated government, but the 
problem in French West Africa was complicated by open-door guar- 
anties for Dahomey and the Ivory Coast, and by the fact that the 
coast line was broken by the interposition of Liberia, four English 
colonies, one German colony, and one Portuguese colony with 
diverse tariffs. As a result the system established by the decree of 
April 14, 1905, provides tvfo different types of tariff for French West 
Africa. One, that in force in Dahomey and the Ivory Coast, is non- 
discriminatory, while the other, which is in force in the remainder 
of West Africa, is a preferential system containing a surtax which 
is levied on foreign products. This latter system, which had been 
applied in Senegal since 1872, was applied to French Guinea by 
the decree of 1905,'^^ In both the systems there is the same free list. 

The free list, — The West African free list included in 1905 animals ^^ 
and fresh meat, fruit and vegetables, potatoes, unhusked rice, manioc 

S6a Known as Upper Senegal-Niger until the decree of Dee. 4, 1920. By decree of Mar. 1, 1919, the colony 
of the Upper Volta had been formed from part of Upper Senegal-Niger.' 

6T See statement of colonial minister, in Circular 3562. Before 1905 practically no duties were levied in 
French Guinea except 7 per cent ad valorem upon all exports of local products. Alcohol, whether manu- 
factured locally or imported, was subject to a consumption duty. There were also import duties (according 
to the rule explained on p. 193) on those articles to which free entry into France had been granted ; and tha 
special duties (see p. 199 in.) upon articles imported indirectly were imposed in 1897. (B. I. d. D., No. 78 
and supplements 1-5.) 

«8 Except neat cattle of foreign origin imported into Guinea, Senegal, Upper Senegal, and Niger; these 
pay 30 francs (calves, 40 francs) per 100 kilograms. This rate, which is the maximum of the French tariff, 
was applied after limited freedom of entry into France was granted to West African cattle, in order to pre- 
vent evasion of the French duty through the shipment of foreign cattle to France via these colonies. In 
1913, 102 head were imported into and "14,790 exported from West Africa. Similarly, bananas and pine- 
apples are dutiable in Guinea. 



198 • COLONIAL TlRIFF POLICIES. 

and yams, agricultural machinery, coal, ships, scientific instruments, 
empty boxes and casks; in 1906 were added crude rubber, copal, 
and groundnuts; and in 1916, charcoal, ivory, and raw or crude hides, 
skins, wool, feathers, wax, and gum arabic.^^ 

Differential duties. — The preferential rates of West Africa outside 
of Dahomey and the Ivory Coast have been changed in only a few 
points since 1905. Up to the outbreak of the war, the only change 
of importance was that a decree of March 3, 1914, established a 
schedule of specific rates on 35 classifications of textiles. This 
change was made in order to avoid frauds and to increase the revenue 
of the colony, but the preamble of the decree'*^ continues: ''But 
this proposal for a radical modification in the assessment of the 
customs duty upon textiles, an article which is imported in great 
quantities into French West xifrica, should carr^f with it certain 
changes in the conditions of supplying this market. Accordingly, 
the department of the colonies has taken care to consult the principal 
industrial and commercial groups interested. Under the conditions 
in which they have been established these rates seem to be such as 
to reconcile the interests of African commerce and those of French 
industry, at the same time taking account of the fiscal necessities of 
the colony" — i. e,, the differentials were upon the whole increased.'^ 
Only in the case of longcloth was the surtax less than the duty, the 
latter being 0.025 franc per meter and the surtax 0.006 franc. 
The decree of November 1, 1916, increased these rates to 0.029 and 
0.06 franc, respectively. Otherwise it raised the droits d'importation 
on textiles by 15 percent and the surtaxes by 7 per cent.'^- By decree 
of December 30, 1920, the specific rates on all textiles were trebled. 

In 1916, 1917, and 1918 there were increases in the duties of 
French West Africa, but the system remains fairly simple. With the 
exception of textiles and about a dozen other chief articles of import 
trade, all articles, from whatever source, pay 5 per cent ad valorem 
as a droit d'importation, and all foreign goods pay a ''surtax," or 
customs duty proper, of 7 per cent ad valorem. The ad valorem 
rates are on the valuation at the port of entry as fixed in an official 
table, or, on the articles not listed, the invoice value plus 25 per cent. 
The chief exceptions, in addition to textiles and to the free list, to 
the general rules that all goods pay an ad valorem duty and aU 
foreign goods pay a somewhat greater surtax, are shown in Table 9, 
in which are included for comparison the rates levied in Dahomey 
and the Ivory Coast. The rates as given in the first three columns 
are those of 1918, except for alcohols for which the rate of May, 
1921, has been inserted; the present rates are found by multiplying 
them by the coefficients of increase of December 30, 1920, June 11, 
or August 22, 1921, given in the last column. The importation of 
trade spirits has been prohibited. 

69 Decrees of May 2, 1906, and of Nov. 1, 1916. 

70 Decree of Mar. 3, 1914, Journal Officiel, Mar. 8, p. 2075. 

'1 The change from ad valorem to specific duties makes difficult a comparison between the absolul o 
amounts of the differentials involved. Nearly one-half of the 35 classifications of textiles were given siir- 
taxes somewhat less than the older proportion of 7 to 5 as compared with the import duty, but on the average 
the ratio of surtax to duty was increased. On several classifications the surtax became twice as gre&l as 
the duty, and on men's old clothes more than twice as great. 

" This increase of rates slightly reduced the ratio of surtax to duty, and on those classifications upon 
which the surtax was tmce or nearly twice the amount of duty it decreased also the ad valorem amount 
of the differential, but not enough to" offset the increase in prices. 



FRANCE. 



199 



Table 9.— Examples of import duties of French West Africa. 
[In francs per 100 kilos unless otherwise stated.] 



Article. 



Senegal and 
Guinea. 



dXs! Surtax. 



Alcohols, brandies, and wines above 15° per hecto of pure 

alcohol 1 800. 00 

Leaf tobacco 

Cigars 

Cigarettes 

Other tobaccos 

Sugar , 

Salt 

Kola nuts . 

Silver 

Petroleum: 

Refined 

Essence 



175. 00 
600. 00 
500. 00 
400. 00 
20.00 
2 5.00 



Matches, per box 

Flintlock guns, each 

Other arms, each 

Gunpowder and saltpeter 

Other powders 

Swords 

Alcoholic perfumes 

Sirups, bonbons, and chocolates . 
Tea 



.percent.. 
....do.... 
....do.... 
....do....| 



.do. 



10.00 

7.00 

5.00 

.01 

5.00 

25.00 

50.00 

15 

25 

15 

15 

8 



200.00 

25.00 

300. 00 

250.00 

200. 00 

5.50 

2.00 

75.00 

1.00 

5.00 

5.00 

.01 

2.00 

10.00 

20.00 

7 

10 
10 
10 
12 



Daho- 
mey and 
the Ivory 

Coast. 



1,000.00 
175. GO 
600. 00 
450. 00 
330.00 
10.00 



50.00 
10.00 

12.00 

10.00 

.02 

7.00 

30.00 

100. 00 

20 

30 

20 

20 

20 



Coeffi- 
cients of 
increase. 



1 The rate on alcohol was raised in 1907 (in accordance with the Brussels' convention of the year before) 
to 200 francs per hectoliter of pure alcohol; in 1912 it was increased to 215 francs; in 1915, to 250; in 1916, to 
275; and in 1919 to300 francs. In 1912 the surtax was increased from 30 to 40 francs; in 1915, to 50; in 1916, 
to 55; and in 1919 to 100 francs. In 191 2 the colonial minister, M. Lebrun, stated that these increases were a 
forward step in the campaign to decrease consumption among the natives and that these chan<^ :'3 would, 
without undue violence to the habits of commerce, favor French products " whose good quality contrasts 
with the inferiority of the competing alcohols." The French and English acted in concert in some of these 
Increases of duty. (For coefficients of increase, see B.T.J, of July 21 and Sept. 22, 1921.) . 

2 This 5 francs is a consumption duty levied upon local production as well as upon imporc ; ion, since 
Feb. 28, 1919. 

The above rates are applicable to West Africa outside of Dahomey 
and the Ivory Coast, but there are certain exceptional rates levied 
chiefly in the Casamance district of Senegal. '^^ 



73 Local t;aria<ions—Lor!gcloth is imported into Senegal in quantities by weight nearly equal tothe imports 
of all other textiles combined. Its value is, however, only a small fraction of the total. Before the law of 
1905 unified the tariffs of Senegal and French Guinea this commodity paid in Senegal a duty of 0. 025 francs 
per meter plus 0.06 franc surtax. The 5 per cent and 7 per cent rates introduced in that year reduced 
the protection on French goods by nearly one-half, the 7 per cent being equivalent to 0.0326 franc 
per meter. Protests v/ere made: in 1906 the earlier rate was restored for Senegal only; and in 1911 it was 
extended to Guinea and Upper Senegal and Niger. In the same way the reduction made in 1914 of the 
protection on French longcloth throughout the remainder of West Africa did not long remain in effect, for 
the rate was increased in 1916 as stated above. 

In the Casamance district of Senegal— the small strip between Portuguese Guinea and English Gambia- 
he special rates are as follov/s, the West African rates being repeated for comparison: 







Casamance. 


West Africa. 




Tax. Surtax. 


Tax. 


Surtax. 


Leaf tobacco, per 100 kilos 


100 None. 
65 75 
5 


175 

None. 
15 


25 


Kola nuts, per 100 kilos ... 


75 


Powders and arms, n. o. s 


.per cent.. 


7 









In the remainder of Senegal the duty on kola nuts is 100 francs per 100 kilos. 

Pineapples, bananas, and coffee froin French sources enter Guinea free, v/hile similar foreign products 
pay 3, 5, and 78 francs, respectively, per 100 kilograms. Three and 5 francs are the French rates on pine- 
apples and bananas, and 78 francs "is the amount of preference on Guinea coffee in the French market. It 
is, therefore, impossible to escape duty by shipping into France via Guinea. 

To preserve the trade of the Guinea ports, surtaxes on indirect importation have been levied since 1897 
as follows: 

Francs. 

Textiles, per 100 kilos 25. 00 

Tobacco, per 100 kilos 10. 00 

Powder and ammunition, ner 100 kilos 20. 00 

Ail other articles, per 100 kilos 3. 60 

The rate of 3. 60 francs is the one most used in France as a surtax for indirect importation; see Tables 
Cand D of the tariff. 

In June, 1919, improvement taxes for the port of Dakar were levied on the tonnage of vessels in the 
roads or at the quay and on every ton transported by rail. 



200 



COLOI^IAL TABTFF POLICIES^ 



Export duties. — During the decade before the war, the only export 
duty was one of 7 per cent on rubber. In 1916 a long list of export 
duties was imposed with unif orm rates throughout French West Africa 
(see p. 217) » 

Exports to France (special treatment). — For the exports of West 
Africa outside of Dahomey and the Ivory Coast on their entry to 
France special concessions have been decreed on palm and certain 
other oils, on building timber, and on limited quantities of cattle. 
By decree of October 28, 1914, slaughtered cattle in the form of 
refrigerated meat may be admitted. At the same time sheep and 
mutton, in limited quantities, were added to the list. From Guinea, 
again in limited quantities, bananas and pineapples are admitted 
free, and cofiee and cocoa are admitted at the special rates granted 
before 1913 to the assimilated colonies, under Table E of the tariff. -^^ 

OCEANIA. 

Commercial importance. — French Oceania includes a great number 
of islands of which the chief are Eapa and the groups known as the 
Society Isjands (Tahiti, Moorea, etc.), the Marquezas, Tuamotu, 
Leeward Isles, Gambler, and Tubuai. The total population is 
about 32,000, including fewer thaji 3,000 French and about the 
same number of other Europeans. The average total trade in the 
years 1909-1913 was 14,600,000 francs. 

Tariffs. — Differential duties: Imports from France and the French 
colonies are admitted free, if the transportation is direct (see below), 
except for the octroi de mer. The products of French India, other 
than longcloth, are an exception to this rule. 

Im.ports from foreign countries pay special rates established in 
1892 and modified several times since. ''The rates are strikingly 
more moderate than those of the mother country "^^ though linseed 
oil and a few other items have higher rates than the French. Animal 
and vegetable products, generally, and some others, pay specific rates, 
and these rates, with exceptions, are lower than those in France.^^^ 
Thus, coffee pays only 35 francs per 100 kilograms: spices, 25; flour, 
2; cereals, 1.50 — rates one-half to one-eighth of the French rates. 
Most, of the remaining duties are ad valorem, and their character 
m.ay be seen from the following lists: 



Typical import duties in Oceania. 



industrial tools and 



FREE — continued. 

Type. 

Scientific instruments. 

Surgical instruments. 

Di\nng apparatus. 

Sacks and cases for packing. 

Seeds for planting. 

Glass windows. 

Crucibles. 

Ships (other than wood under 100 tons). 

71 See Table on p. 195. 

75 Ermels, Robt.; ?rankreichs Koloniale Handeispolitik. Geschichto. "VVirkung, und Kritik derselben, 
1910, p. 88. The ad valorem rates are reckoned on invoice values plus 25 per cent, and the actual com- 
mercial rate of exchange has recently been adopted for the conversion of values expressed in foreign cur- 
rencies. (Commerce Reports, Aug. 8, 1921.) 

'■'a A decree of July 5. 1921, increases bv 25 per cent all the import rates except those on sugar and sea- 
going vessels. (B. I. d'D., 10th Sup. to No. 84.) 



Fai'm animals. 
Agricultural and 

machines. 
Engines. 
Coal. 

Gasoline, petrol. 
Building stone. 
School supplies. 
Printing presses. 



FEA 


ISJ-CE. 


8 PER CENT. 

Tea. 
Tools. 


13 PER CENT 


Yarns and textiles. 


Pulleys. 


Furniture. 


Iron beds. 


Wrought metal. 


Cane chairs. 


Chains. 


Needles. 


Sheet iron. 


Irons. 


Basket wares. 


Hooks. 


Saddlery. 


Sewing machines. 


Jewelry. 


Photographers' supplies. 


Cutlery. 


V/eighing apparatus. 


Safes. 


Wood and wooden ware. 


Boots. 


Most of the paper schedule. 


Brooms. 


Articles not enumerated. 


Hats. 




Brushes. 


10 PER CENT. 


Pottery. 

Dyes. 

Perambulators. 


Tinware. 


Lath. 




Art objects and hardware. 


20 PER CENT, 


Chinese wares. 




Copying presses. 


Arms and fireworks. 


Stoves. 


Carriages. 


Nails. 


Wagons. 


Rubber hose. 


Feathers for hats. 


Pressed vegetables. 




Umbrellas. 


30 PER CENT, 


Parasols. 


Tobaccos. 


Small craft of any size. 


Gloves. 




Artificial flowers. 



201 



The octroi de mer: The octroi de mer is arranged in a schedule of 
about 500 headings — twice as many as in any other colony. It falls 
on practically the same list of articles as those subject 'to the^ customs 
duty, though a few items are free on one list and dutiable on the other. 
Thus there is no octroi on alcohol, rum, tafia, and beer, though a 
score of alcoholic drinks are taxed, ^^ nor on leaf tobacco, fresh fruit, 
milk, butter, fresh and dried fish, and hats and fans of straw ' and 
bamboo, etc. The rate on most of the manufactured articles and 
on all articles not enumerated is 12 per cent,'^*^^ whether the customs 
duty be 8 per cent, 13 per cent, 15 per cent, or some other rate. 
Likewise on the articles where the duties are specific, the octroi 
varies from one-third or one-half the rate of the duty to three or 
four times as much, though it is more frequently lower rather than 
higher. Parts of the schedule go into great detail, 21 varieties of 
conserves of fish being enumerated and 50 other varieties of con- 
serves and preserves. 

Export duties: By a decree of March 12, 1899, a duty of 15 francs 
per 100 kilograms was put on all mother-of-pearl exported to desti- 
nations other than France, but in 1906 the rate was reduced to 6 
francs and the differential feature was removed. The rates put in 
force in July, 1921, with the year in which the product had become 
dutiable, are as follows: Mother-of-pearl, 12 francs per 100 kilos; 
copra (1903), 20 francs per metric ton; phosphates (1910, after the 
first shipment had been made in 1909), 1,50 francs per metric ton; 
vanilla (1913), 0.40 franc per kilo; dried coconuts (1921), 10 francs 
per thousand; coconut oil, 4 francs per 100 liters. 



■^6 The exemption of spirits, though not of beer, is perhaps explained by the continuance of an older con- 
sumption duty on spirits. This is 3 francs per liter for spirits of 80° of alcoholic strength or more, 1.20 



francs for 56° or less, and proportional rates for intervening strengths. 
76a The American consul has reported (September, 1921) an increase by 20 per 



cent in these octroi rates. 



202 COLONIAL TARIFF POLICIES. 

Preference on vanilla exported to France: Exports to Frartce pay 
upon entry into France the minimum rates, with the exception of 
vanilla," which enters France in a quantity determined by decree 
each year ^^ at one-half of the usual duty. As in similar cases else- 
where, the rebate is given only for direct transportation and vfith 
proof of origin of the goods, but ^'direct" in this case is construed to 
include the routes Colon-San Francisco and Sydney- Auckland. 
French goods may also enter Oceania "directly" by these routes. 
Vanilla and copra are the leading exports, valued at three-fourths of 
the total; and phosphates and mother-of-pearl come next in order. 
These four products constituted in 1913 nineteen- twentieths of the 
exportations. 

ST. PIERRE AND MIQUELON. 

Commercial importance. — St. Pierre and Miquelon islands are the 
largest of two small groups not far from the coast of Newfoundland. 
They form a customs district with a single port of entry. Fishing is 
the only industry, and the total population, which is now less than 
5,000, has been decreasing for many years. The average total trade 
for the years 1909-1913 was 12,700,000 francs, an enormous decrease 
from the average of the years 1899-1903, which was 22,100,000 
francs. 

This fishing outpost was ^'assimilated" by the tariff law of 1892, 
in spite of the fact that it was too small and too distant to maintain 
direct trade with France. It was necessary to make a concession 
from the rule of '^ direct" importation, and goods sent from France to 
the islands via La Havre-Liverpool-Halifax or via La Havre-New York, 
were considered as imported direct. The rule did not, as in the case 
of Oceania, appl}^ in both directions. 

Special tariff' a substitute for assimilation. — The concession in the 
definition of ^'direct transportation" did not stop the economic de- 
cline of the islands ^^ and by a law of November 11, 1912, St. Pierre 
and Miquelon were taken out of the assimilated class, though they 
still had to wait until the decree of April 23, 1914, before they received 
a special tariff, and were definitely treated as nonassimilated. This 
special tariff was drafted by the local administration in concert with 
the local chamber of commerce, was agreed to by the ministries of 
finance, of commerce and of the colonies, and was decreed by the 
Council of State.«« 

As coming from a nonassimilated colony, the products of vSt. 
Pierre and Miquelon will pa}^ in France the minimum tariff, unless 
exceptions are made by special decree. However, the French tariff 
specifies that the products of French fisheries shall enter free,. and 
according to the figures for 1913 fish and fish products constituted 
over 99 per cent of the value of the local products exported to France — 
5,250,000 out of 5,288,000 francs. Most of the 9,800 francs worth of 
hides went to France, and hides are on the French free list. The 
only other article of which more than 5,000 francs worth was sent to 
France in 1913 became dutiable in France by the change of status of 

'^ And sugar, as above, p. 192; but sugar is not listed separately in the statistics of French imports irom 
Oceania, 1914. 
'8 For the year ending June 30, 1920, the quantity specified was 100,000 kilos. Decree of Jan. 7, 1920. 
'9 Girault: Op. cit., p. 187. 
«o Circ. No. 4531. 



rRAITCE. 



203 



the colony. This article was fresh meat, of which the whole amount 
exported, viz, 14,000 francs worth, went to' France. French goods 
pay in St. Pierre and Miquelon only the consumption duties. 
The free Zis^.— The free list in St. Pierre and Miquelon includes: 



Live animals. 

Fresh meats. 

Game and poultry. 

Eggs. 

Milk. 

Fresh and dried fish except cod and others. 

Wheat. 

Fresh fruits. 

Potatoes. 

Gums. 

Hoop wood, poles, and firewood. 

Coal. 

Salt. 

Dyes. 

Books. 



Fishing hooks. 
Seagoing boats. 
Scientific instruments. 
Raw hides and peltries. 
Wool. 

Horse hair. 
Fishing line silk. 
Manures. 

Shells, bones, etc., for carving. 
Cotton, flax, and hemp. 
Plaster. 
. Millstones. 
Ores. 
Potash. 
Various chemicals. 



Rates lower than in France. — The tariff enumerates 262 items, in- 
cluding those on the free list, and concludes with the statement that 
all articles not enumerated shall pay 8 per cent. The specific rates 
are generally very much lower than those of the French tariff. For 
instance, the cotton schedule starts with plain cotton piece goods at 
11 francs per hundred kilograms, and increases to 90 francs on ready- 
made clothing, while in France the minimum tariff rates on unbleached 
cotton piece goods, at the time of making the St. Pierre tariff, ranged 
from 62 francs to 620 francs, with considerably higher rates on other 
varieties. Paper, other than photographic, was made dutiable in St. 
Pierre at 8 francs per hundred kilograms, when in France the rates 
were 10 to 60 francs. Some items, however, were made* somewhat 
higher than in France, as for instance most of those chemicals which 
are not on the free list. 

Consumption duties. — In addition to the customs duty on alcohol 
there is a consumption tax of 50 francs per hectoliter of liquid of 89° 
(and other strengths in proportion) for brandy, cognac, rum, and 
whisky, and an octori de mer levied at lower rates on these and other 
alcoholic beverages. The octroi on beer is 15 francs, that on ordinary 
v/ines in casks 5 francs, and that on cider and perry only 3 francs per 
hectoliter. 

Changes in rates. — The most striking difference between the tariff 
of special exceptions which St. Pierre and Miquelon possessed as an 
assimilated colony, before 1914, and the special tariff which they now 
have as a nonassimilated colony, is the introduction of the general 
rate of 8 per cent ad valorem on all articles not specifically mentioned. 
The free list now appears much longer than formerly, but this is 
chiefly because the articles enumerated in the second column above 
were formerly not specified, as they were marked free in the French 
schedules. The real additions to the free list are wheat, milk, and 
horses. Of the articles subject to specific rates, no change has been 
made in farinaceous foods, colonial produce, and woods; reductions 
have been made on animal products, petroleum, cotton cord and sails, 
and shoes; and the rate on alcohol, brandy, hollandj^, rum, and tafia 
was increased from 31.60 to 50 francs per hectoliter of 89°. 
185766°— 22 14 



204 COLOXIAL TAEIFP POLICIES. 

Opex-Door Coloxies. 



MOROCCO. 



Commercml importaiwe. — The population of French Morocco is 
estimated at about 5,400,000. The European part of it numbers 
some 51.000, and there are approximatelv 76.000 Jews. The aver- 
age total trade for the years 1909-1913 was 226.000.000 francs, in 
spite of the political (fisturbances of the period. Thus Morocco 
then ranked in cc^umercial importance a little below Tunis. More- 
over, the trade figures were for the whole of Morocco, and the Spanish 
zone and the hiternationai zone aro;md Tangier had a considerable 
fraction, decreasing toward one-foiu'th of the trade. There is no 
customs line between the Spanish and the French zones.^^ hence the 
proportion of the trade entering via Tangier and Laraiche in the 
Spanish zone and going through to the French zone can only be esti- 
mated. Besnard and Avmard ascribe to the French zone as desti- 
nation or source 40 per cent and 60 per cent of the imports of these 
ports, respectively, and 60 per cent and SO per cent, respectively, of 
theh^ exports. Calculation on that basis gives a figure for the aver- 
age total commerce of the French zone for the years 1909-1912 
of almost 147.000.000 francs. In the succeeding years this trade 
increased rapidly. In 1917 the total of imports and exports for 
the whole of Morocco amounted to 500.000.000 francs. 

Tanjf Mstory — Treaties.-— The tariff history of Morocco is largely 
the history- of treaties, which have both guaranteed the open door 
and limited the rates of import and export duties. 

By the treaty of peace and commerce between Morocco and Spain, 
March 1. 1799. goods imported by Spanish merchants were to pay 
at the ports of Morocco no higher duty than they had been paying 
in the past, namely 10 per cent ad valorem. ^^ The treaty enumer- 
ated the specific export duties which were to be levied on sixteen 
items of exportation. Various later treaties maintained the rate of 
import dutv at 10 per cent, particularlv those with Great Britain, 
December 9. 1856; HoUand. May 18. 1858; Spain. November 20, 
1861; Belgiiun, Januarv 4. 1862; GermanT. June 1. 1890: and France. 
October 24. 1892.^^ 

By the treaty with Great Britain the Sultan of Morocco is bound 
to abolish all monopolies or prohibitions on imports, except on 
tobacco, pipes for smoking, opiiun. sulphui;, powder, saltpeter, lead, 
arms of all kinds, and ammunition of war; and to aboHsh aU monop- 
olies of agricultmal produce and of every other article whatsoever 
except leeches, bark, tobacco, and other herbs used for smoking in 
pipes (Art. II). Ko charges whatever aside from the export duties 

51 In 1917 a mission from MelillaiiiTestigated the commercial possibilities of the hint-erlandin the Spanish 
and Trench zones. Their report, made by Don Louis Garcia Alix, a member of the Junta de Arbitric of 
MeliUa, is reproduced inthe Supplement of L'Afrique Frangaise for January, ISIS. pp. 19-24. The report 
states that at Berkane (95 kilometers e-ast of -Nieiilla and just inside the French zone) the French were col- 
lecting on merchandise imported through the Spanish zone a special ''droit de survalue"' upon the differ- 
ence in value at thisinland^point and at^he seaboard. The duty amounted to from 1 per cent to 3 per cent 
ad valorem. The report recommends the total suppression of this duty on the ground that there is no 
legal justification for it. The mission found that the commercial zone of'Melilla vras being reduced by the 
advance of the Central Algerian and South Gran railway — Oudjda -had already been lost. The collection 
of a droit de survalue of course helps the French to restrict the commercial hinterland of Mehlla to the 
Spanish zone. 

^ Martens. G. F. de: Eecueil des Traites. Supplement III. p. 133. Art. 27; Cantillo, Tratados de Espafia, 
1700-1S42, p. (m. ' 

^ Rouard de Card. E . : Le-s Traites de Commerce Conclus par le Maroc, pp. 16, 31, 33, 70, 72, and 81. The 
English treaty is given in British and Foreign State Papers, vol. 16, p. 15S. 



FRANCE. 205 

specified in the treaty are to be levied on goods purchased by British 
subjects for exportation (Art. Ill), but the rignt of the Sultan to 
prohibit the exportation of gi^ain and other articles of commerce 
was recognized (Art. V). The duties payable upon merchandise 
imported by British subjects should not exceed 10 per cent of their 
value at the port of entry (Art. VII). Forty-one items were in- 
cluded in the export schedule and all the duties enumerated were 
specific (Art. VII). »* 

The other treaties mentioned are similar, but the treaty with 
Germany in 1890^^ made numerous changes, necessarily reductions, 
in the rates of the export duties previously levied, and contained a 
schedule of 43 items on which export duties were not levied at the 
time of the conclusion of the treaty with England. Thirteen of these 
were dutiable either at 5 per cent or 8 per cent ad valorem. The 
others were subject to specific duties.^® It was provided that German 
subjects might import goods of any origin and might import or export 
in vessels of any nationality. 

After the French Government adopted the general and minimum 
tariff system in 1892, the benefit of the minimum rates was granted 
to products of Morocco only after negotiation and the granting of 
concessions by Morocco. The concessions took the form of reduc- 
tions of duty which were necessarily of general application to products 
of all countries, but the articles selected were of special interest to 
French commerce.^^ 'The rate of import duty on the articles listed 
below ^^ was reduced from 10 per cent to 5 per cent. Small reductions 
were made in the export duty on half a dozen items, and prohibitions 
of exportation were repealed for ores except lead ores, barks, and 
certain woods. 

The concessions made in the earlier treaties had long been enjoyed 
by various powers which were entitled to most-favored-nation treat- 
ment in Morocco; for instance, France, by the convention of Septem- 
ber 10, 1844, had been entitled to enjoy ''in everything and on every 
occasion" the treatment of the most-favored nation.^^ In. 1880 
Morocco pledged most-favored-nation treatment to all the other 
nations which were parties to the convention of Madrid — Germany, 
Austria, Belgium, Denmark, Spain, United States, Great Britain, 
Italy, Holland, Portugal, Sweden, and Norway. 

In 1904 Great Britain and France, by the declarations exchanged on 
April 8, agreed that in Morocco as well as in Egypt there should be no 
differential treatment in regard either to import duties or to railway 
rates. It was further provided that the facilities for transit trade 

** The treaty further provided that no "anchorage, tonnage, import, or other duty or charge" should be 
levied on British vessels or goods imported or exported in British vessels "beyond what is or may be levied 
on national vessels" and goods imported or exported in them; and maximum rates are laid down for these 
dues (Art. X). The treaty was to remain in force until revised by common consent (Art. XIV). 

85 By the treaty of Versailles Gernjany renounced all her treaty rights in Morocco. 

86 Gustave Wolfram (Le Maroc: Etude Commerciale et Agricole, Paris, 1893, pp. 10 S.) states that the 
export duties, si)ecific in form, generally amounted to about 10 per cent. But the prices which he gives 
as then current in the ports show that the duties on most of the articles concerned amounted to nearer 
20 per cent of their values than 10 per cent. The duties on gums amounted to only about 2| per cent to 
5 per cent, but those on the cheaper maize and cattle came to nearly 50 per cent, and the rate on alfa, he 
says, v/as prohibitive. Doubtless prices have risen considerably since then, and the duties are now less 
in proportion. 

87 The minister of foreign affairs, M. Ribot, specifically explained the special interest of French com- 
merce in these changes in import and export duties. See his "expos(?. des Motifs," and the text of the 
notes exchanged with the Moroccan Government, Oct. 23-24, 1892, and of the law authorizing the appli- 
cation of the minimimi tariff rates to products of Morocco, Feb. 6, 1893. Jules de Ciercq, Recueii des 
Trait^s de la France, vol. 19, 1891-93, pp. 550-554. 

88 See p. 208. 

89 lb,, vol. 5, 1843-49, p. 202. 



206 COLONIAL TAKIFF POLICIES. 

across territory controlled by these two countries into Egypt or 
Morocco should be subject to identical conditions for the nationals of 
the two countries. 

The affairs of Morocco were regulated in 1906 by the conference of 
Algeciras, which ordained in its final act '^ economic liberty without 
any discriminations." This conference also provided for the imposi- 
tion of an additional import duty of 2^ per cent ad valorem and 
arranged for an international commission to make the ofEcial valua- 
tions upon which the rates are collected. The additional duty was to 
be a temporary tax devoted to such public v/orks as the Moroccan 
Government and the diplomatic corps should agree upon.*^ Accord- 
ing to the Franco-German treaty of November 4, 1911, "The Gov- 
ernment of France, firmly attached to the principle of commercial 
liberty in Morocco, will permit no discriminations." When the 
French Government assumed a protectorate over Morocco in 1912, 
it gave renewed assurances that equality in matters of commerce 
would be maintained. 

Thus, by a long series of treaties with individual countries, extend- 
ing back more than a century, Morocco agreed to a limitation of its 
import and export duties. Discriminations were guarded against 
by the similarity of treaty provisions and by most-favored-nation 
clauses. By other treaties, chiefly among the powers of Europe, 
commercial equality was pledged in Morocco— particularly by 
France and Spain, whose growing political ififluence over parts of, 
Morocco gave the other powers cause for alarm. 4 

Treaty of Versailles and Frencli 'policy. — None the less, the trend of 
French opinion, if not the policy of the French Government, aims 
at the abolition of the open door in Morocco. This idea is supported 
by several sentiments, precedents, or arguments. The large ex- 
penditure in men and money for the pacification and the develop- 
ment of Morocco is alleged to give the French a "right" to special 
privileges there. France makes less and less distinction between 
protectorates and colonies. The economic measures taken during 
the war by the Moroccan Government under French 'advice,"^ 
the admission of Moroccan vessels to the French coasting trade, 
and the introduction of French currency in Morocco illustrate this 
point. It is argued that commercial treaties are necessarily modi- 
fied by the occurrence of a fundamental change in the situation 
for which they were made ^^ and that the establishment of the French 
protectorate constituted such a change. Foreign countries should 
therefore surrender their '^special privileges" — such as the capitula- 
tions and the open door gave to them — under previously existing 
treaties. The precedent of Tunis is used to enforce the argument, 
though, it is cited as a grievance that the foreign powers delayed, 
for 16 years after the establishment of the French protectorate, 
the renunciation of their treaty rights to ec^ual treatment in Tunis. ^^ 

Tlie United States and Great Britain insisted during the negotia- 
tion of the treaty of Versailles upon the maintenance of the open 

90 Art. 96 of the treaty. 

91 This is the principle discussed by writers on International Law under the term rebus sic stantibus. 
See, e. g., Holtz, Louis: Traite de Legislation Marocaine, Paris, 1914, p. 91. This author states that It is 
"generally admitted" that commercial treaties made without a time limit become void if one of the States 
concerned falls under the protection of a third State. 

92 And that certain powers then renounced their rights only with reservations. 



. FRANCE. 207 

door,^^ but acquiesced in depriving the Germans of all rights in 
Morocco. Article 141 of the peace treaty reads as follows: 

Germany renounces all rights, titles, and privileges conferred on her by the general 
act of Algeciras of April 7, 1906, and by the Franco-German agreements of February 9, 
1909, and November 4, 1911. All treaties, agreements, arrangements, and contracts 
concluded by her with the Sherifian Empire are regarded as al)rogated as from 
August 3, 19l4. 

In no case can Germany take advantage of these instruments and she undertakes 
not to intervene in any way in negotiations relating to Morocco which may take 
place between France and the other powers.^'* 

This leaves the treaty of Algeciras as the chief guaranty of the 
open door in Morocco and in regard to this treaty the following 
language from reports of committees to the Chamber of Deputies 
should be noted: 

The act of Algeciras is still an international reality. But there must be confidence 
in the Government, which should by a diplomatic convention break the last bonds, 
already well loosened, of the accord imposed by the Germany now conquered. It 
will be easy then to find a way of creating for the benefit of French agriculture a 
privileged regime for the exporta'don of the phosphates of Morocco. ^^ 

Inasmuch as the treaty constituted an agreement with Germany, its clauses con- 
cerning Morocco could not logically contain provisions disposing of the interests of 
the Allies. But by the very fact that the treaty has been signed the situation becomes 
implicitly and radically changed. . 

By joining us in imposing on Germany the abrogation of the former treaties which 
her intervention caused us to conclude, particularly the act of Algeciras and the con- 
vention of November 11, 1911, our Allies make an implicit renunciation of the advan- 
tages in Morocco which they derived from these diplomatic agreements. It is easily 
seen how far this will facilitate the separate negotiations with each of the powers, to 
secure the ratification of such renunciation. Their formal acquiescence will be equally 
facilitated by the resolution of France to maintain, except in the case of enemy 
powers, the open-door regime in Morocco. Equality of treatment in respect to customs 
duties in Morocco was not the result of our treaties with Germany; we had pledged 
it in our agreements of 1904 with England and Spain. We abide by the engagements 
sanctioned by Parliament. Note also that the open-door regime, if it entails equality 
of treatment in Morocco for both the French and foreigners, leaves the Sherifian 
Government entirely free to determine the form and the rates of the customs duties. 

In signing the act of Algeciras the Government of the United States declared that 
its sole desire was to. insure free entrance into the country for the commerce of all 
nations and to advance its civilization; and in the present negotiations its repre- 
sentatives have again affirmed that the maintenance of the open-door principle and 
of cordial relations with Morocco were the only features of the proposed regime iu 
which the United States was concerned. 

On the other hand, Great Britain, which is now negotiating with us for the applica- 
tion of the Franco-British agreements of 1904, consents to abrogate the act of Algeciras 
and the treaty of 1911 in so far as they concern her interests and relate to the French 
zone, and to lend us her support in bringing the other powers to the same attitude.®^ 

93 See the report made to the Chamber of Deputies on June 17, 1920, quoted in L'Afrique Frangaise, 
July, 1920, Supplement, p. 128. 

s-i By arts. 142, 143, and 144 Germany renoimces the regime of capitulations in Morocco; grants complete 
liberty to the Moroccan Government in regulating the status of German nationals; transfers to the 
Moroccan Government all property in Morocco belonging to the German Government or royal family, 
and transfers to the French Government the German shares in the State Bank of Morocco. Provision is 
also made in these articles and elsewhere for depriving German nationals of mining rights and other 
property ta Morocco. 

The sweeping away of German rights in Morocco was shortly followed by the imposition of a differential 
tarifT on German goods. 

9& See the report of June 17, 1920, quoted in note above. The privileged regime has apparently been 
devised without "breaking" the last bonds of the act of Algeciras. After the official denial of the rumor 
that a concession was to be granted to a foreign company for the exploitation of Aloroccan phosphates, 
the French Government undertook this exploitation directly, and the colonial loan approved by the 
French Parliament in August, 1920, includes an item of 86,000,000 francs for this purpose. (The Times 
Trade Supplement, Aug. 21, 1920, p. 600.) 

96 Chamber of Deputies, 11th Legis., Session of 1919. No. 6666. Rapport fait au nom de la commission 
chargee d'examiner le projet de loi portant approbation du Traits de Paix. (Partie IV, Sees. II- VIII, 
pp. ^6). 



208 C0L,02s"IAL TARIFF POLICIES. 

THE MARITIME CUSTOMS TARIFF. 

Import duties. — Tlie tariff now in force in the seaports ^^ of Morocco 
levies upon goods imported the general rate of 10 per cent ad valorem, 
as was permitted by the older treaties, and an additional duty of 2| 
per cent, authorized by article 66 of the treaty of Algeciras. "^By an 
e:Kception dating from the French treaty of 1892, the rate on certain 
articles is only 5 per cent plus th« 2^ per cent additional. Th^se 
■articles are: 

Textiles of silk, pure or mixed. 

Gold and silver jewelry and gold galloons. 

Precious stones and their imitations, and rubies. 

Wines and distilled liquids. 

Alimentary pastes. 

Tobacco pays in addition to the 2^ per cent, if imported for the 
monopoly, 10, 15, or 25 pesetas Hassani ^ per kantar,^^ respectively, 
for leaf, cut tobacco, and cigars and cigarettes, and if imported by 
individuals, an additional duty of 57 pesetas Hassani on ^ach 1.000 
cigarettes or each kilogram of cut tobacco, and 22 pesetas Hassani on 
each 100 cigars. 

Discrimination against German goods. — By a Moroccan Dahir of 
January 11, 1920, discriminator}- duties were imposed upon German 
products. These products are admitted only ujwn license and, if 
admitted, are charged 10 per cent ad valorem in addition to the 
duties ordinaril}" collected from foreign imports. If the importation 
is indirect, the additional duty is 15 per cent ad valorem. These 
additional duties may be suspended, however, for foodstuffs and for 
materials for works of public utility if these articles are not at the 
time obtainable elsewhere than in Germany.^ 

The free to.-— The free list has been conspicuous in the Moroccan 
tariff by reason of its absence. For many yeai^ the only articles not 
dutiable upon importation were manures'^and fertiiizersr Since 1917 
exemption from the general duty of 10 per cent ad valorem but not 
from, the additional 2^ per cent has been granted to a score of varie- 
ties of agricultural machines and tools, including threshing machines, 
and when imported at the same time motors to operate them.^ By 
decree of December 22, 1911, empty sacks, cases, tins, and barrels, 
and packing cloth, hoops, and wire had been granted free entr\', but 
only on guarantee of reexportation within 6 months. 

Export duties. — More than 150 items are enumerated in the sched- 
ules of Moroccan export duties, and articles of minor importance, not 
enumerated, are dutiable at one-half of 1 per cent.^ The rate is 10 per 

97 For the tariff on imports by land from Algeria and Melilia, see p. 210. Ad valorem duties are levied 
on the basis of official valuations. 

98 The peseta Hassani was a silver coin nominally equal to the franc. The old Moroccan Government 
did not maintain it at its value in gold; but its scarcity gave it a value greater than that of the silver it 
contained so that it was usually worth tvro-thirds of a franc or more. The high price of silver lirought it 
to par in 1917, and the French' Government undertook to keep it there, its value -continued to rise. A 
Dahir of March 20, 1920, deprived it of its status as legal tender, ordered its immediate withdrawal Irom 
circulation, and substituted French francs, at the rate (temporarily) of 2 francs for each peseta Hassani. 

99 50f kilogi-ams. 

1 The Times Trade Supplement, Feb. 7, 1920, p. 541, Tie French te:xt is given in L'Afrique Francaise, 
February, 1920. A Dahir of Jan. 26 provided two routes by which German goods might enter Morocco 
through the Spanish zone. (L'Afrique Frangaise, March, 1920, p. 110.) 

2 By the decree of Fel\ 12, 1917. Velez Villanueva, Recopilacion Legislativa vigehte en la Zona de Influ- 
encia de Espagna en Marruecos, Madrid, 1917, p. 663. 

Arts. XIII and XIX of the Franco-Spanish agi'eement of Nov. 27, 1912, provide for uniformity of tarifls 
in the French and Spanish zones- 

3 Board of Trade Journal, Oct. 14, 1920. The duties on mineral ores, including the 0.5 per cent on un- 
enumerated products, were abolished by Dahir of Aug. 18, 1921. (B. I. d. D., No. 132, 2d ed.) The mining 
code, however, provides for a duty of 3 per cent on ores, raw metals , and alloys, and of 10 per cent on gold, 



PKA]^CE, 209 

cent on furniture, gold, and essence of rose; 8 per cent on wickerware, 
iron stirrups, copper, trays, and cotton or woolen thread; and 5 per 
cent on pottery of the country, linen thread, textiles, articles made 
of leather, Arab guns and daggers, and rims of sieves. Fresh fruits 
and vegetables, including potatoes, and wine and brandy also pay 5 
per cent. Of the other rates, which are specific, a few examples are 
given in Table 10. These specific rates are not high except upon 
cereals. Article 67 of the act of Algeciras expresses a wish that 
rates on cereals should be reduced, and in 1915 the French proposed 
a 60 per cent reduction but came to no agreement upon this subject 
with Sj)ain.* 

Prohibitions, restrictions, and monopolies. — Prohibited^ imports are: 
Saltpeter, gun|)owder, nitroglycerine, sulphur, lead for manufacture 
of bullets, absinthe and similar products, opium (except that con- 
signed to pharmacies), snuff and kif,® tobacco, and pesetas Hassanio 
The trade in snuff and kif is a monopoly of the Moroccan Government. 
Tobacco is monopolized by an international company, the Interna- 
tional Society for the Cooperative Management of the Tobacco Trade. 

The export of oxen is subject to limitation. Only 10,000 head may 
be sent out to any single country in one year. The Moroccan Go vern- 
m^^ent has reserved the right to prohibit entirely the export of oxen 
from ports in whose vicinity there is a shortage of such animalsJ 

During the war the export trade of Morocco was strictly controlled 
by the French resident, who as commander in chief issued a long series 
o^f orders whose object was the reservation of the surplus over local 
needs for the use of the French military authorities.^ These restric- 
tions had largely disappeared by September, 1919.® 

Consumption duties. — The French administration in Morocco has 
introduced consumption duties on a limited list of commodities. 
Since these duties are not levied on local production,^°if any, but only 
upon imports, and the duty is, therefore, an import duty in the ordi- 
nary use of that term, the treaty basis of its imposition is not clear. 

The consumption duty was imposed at first onlv on alcohol (Dakir 
of Oct. 18, 1914), then on -sugar (Dahir of Dec. 12^ 1915),' and in 1919 
(Dahir of Aug, 25) on the other articles named below. The rates 
have been greatly increased ; on alcohol from 200 to 600 francs per 
hectoliter, and on sugar from 10 to 20 (1918) and then to 40 (1920) 
francs per hundred kilograms. The chief rates in force are as follows : 

Sugar, 40 francs per 100 kilos. 

Coffee and cocoa, raw, 50 francs per 100 kilos. 

Coffee, prepared, 75 francs per 100 kilos. 

Chocolate and cocoa preparations, 24, 50, or 70 francs per 100 kilos. 

Cloves and other spices, 100 francs per 100 kilos. 

Tea, pepper and nutmegs Vithout the shell, 150 francs per 100 kilos. 

« Morocco: Annuaire Economique et Financier, Casablanca, 1917, p. 31. 

6 The prohibition applying to arms, ammunition, and materials for the manufacture of ammunition was 
•Ittiposed by the act of Algeciras, Article 13. Articles 14 to 18 of the same act modify the prohibition to ^the 
extent of allowing the import of sporting and dress arms, not rifled, for the personal use of the importer. 
Powder and explosives may belmported for industrial purposes, and for the construction of public works. 
Minute regulations were laid down by the act of Algeciras for the trade in arms and ammunition; and pen- 
alties were provided for infringement. 

6 Kif (quif) is dried and powdered hemp. 

7 Article 68 of the act of Algeciras. The limitation was raised by this act from 6,000 to 10,000 head. The 
quotas for export in 1920 were fixed by a Dahir of Apr. 26 at 50,000 oxen and 100,000 sheep (FAfrique 
Francaise, November, 1920, p. 334.) 

8 A summary of3.5 decrees issued up to June 21, 1917, is given in the Moroccan Annuaire, cited above, pp. 
S9-61. Exportation to countries other than France, especially to Allied countries, was not wholly cut oft" 
but the exportation to France, which had been 39.3 per cent of the totalin 1911 and 63 per cent in 1913, rose 
in 1916 to 84.4 per cent of the total. (lb., p. 63). 

3 Board of Trade Journal, Sept, 25, 1918. 
10 Ibid., Oct. 9, 1919, p. 460. 



210 COLONIAL TARIFF POLICIES. 

Vanilla, 250 francs per 100 kilos. 

Denatured alcohol, 2 francs per hectoliter. 

Alcohol contained in wines, cider, beer, perry, and hydromel, in vermouth; quin- 
quinas, liqueurs, and imitation wines under 23 degrees; and in perfumes and 
chemical products^^ 600 francs per hectoliter of pure alcohol. 

Other alcohols, 1,000 francs per hectoliter. 

Special tariffs of the land frontiers. — The treatment accorded to 
goods imported into Morocco by land from the Spanish city of Ceuta 
does not differ from that accorded in the Moroccan seaports. But to 
the frontiers between MeHlia and the Spanish zone and between 
Algeria and the French zone as far inland as Teniet Sassi the duties 
prescribed in the old treaties and the act of Algeciras do not apply. 

The land frontier of Morocco is clearly dehmited on the side of the 
Spanish possessions, but on the side of Algeria the boundary has been 
defined only fromi the sea to Teniet Sassi, about 60 miles inland. The 
rest of this boundary is defined by naming certain trade centers and 
oases as Moroccan or Algerian; outside of these places the authority 
of the two governments follows the migrations of the tribes. The 
southwest boundary of Morocco is in the desert and is of no conse- 
quence. 

The Franco-Moroccan accord of May 7, 1902, refers to the special 
trade relations which have ^'always" existed in the land trade be- 
tween Algeria and Morocco .^^ This accord recognized the right of the 
French to continue to collect statistical and inspection duties (taxe 
sanitaire) and of the Moroccan Government (the ''Makhzen" or 
''Maghzen") to collect export and ''transit" duties .^^ The French 
duties named are insignificant in amount and constitute no real 
abridgment of the freedom of importation which had been estab- 
lished by the law of July 17, 1867, for products of Morocco, Tunis, 
and the Sahara entering Algeria overland. The treaty refers to an 
annexed schedule of Moroccan duties, but by a protocol the drawing 
up of this list was postponed until the Moroccan Government could 
establish customhouses on this frontier .^^ This special regime for the 
overland trade was excluded from consideration at the conference of 
Algeciras, ^^ and was thus tacitly recognized. The Spanish city of 
Melilla shares with Algeria the advantage of the lower tariff of the 
land frontier, since by the Spanish-Moroccan accord of November 17, 
1910, the duties to be collected in the customhouse which was to be 
reestablished in the region of Mehlla were to be "no other or higher 
than those collected on any other frontiers whatsoever of the Em- 
pire. "^^ 

11 Times Trade Supplement, Sept. 13, 1919. 

12 De Clercq: Op. cit., vol. 22, p. 123. After the French conquest of Algeria, trade with Morocco wasfree 
until the decree of Dee. 16, 1843, prohibited importation by land* with such exceptions as the governor 
general might allow. By decree of Aug. 11, 1853, moderate duties were substituted for the prohibition 
and fiye customhouses were established. But neither the prohibition nor the duties were enforced to any 
great extent. Barthe: Op. cit., pp. IL 12. 

u This transit duty is an ordinary import duty. 

1* The Moroccan customhouses on this frontier were not well established until 1908. (Bernard, Augustin: 
Le Maroc, revised, Paris, 1913, p. 381.) 

16 Statement by the Minister of Foreign Affairs, M. Leon Bourgeois, to the Chamber of Deputies on 
Apr. 12,1906. (Ministeredes Affaires Etrangeres, Documents Diplomatiques, 19C6, Affaires du Maroc. 
Protocoles et Comptes Rendus de la Conference d'Algtisiras, p. 289.) Compare the accord on the program 
of the conference and article 103 of the final act. Deloncle: Statut International du Maroc (Paris, 1912), 
pp. 58, 203. 

18 Art. 5. Deloncle: Op. cit., p. 336. Contrast the language of article 11, by which the customhouse to 
be established near Ceuta was to collect "the same duties on imports and exports as in the ports. " lb., 
p. 340. This customhouse near Melilla has been estabhshed. The Spanish-Moroccan treaty of July 21, 
1866, provided for a customhouse near Melilla. in which the same duties were to be collected as in the ports, 
but apparently during most of the history of Melilla whatever trade the state of the country permitted 
was actually free of all Moroccan duties, (Bernard: Op. cit., p. 380.) The treaty of 1866 is given in 
Marques de Olivart: Coleccion de los Tratados, Convenios, etc., vol, 4, p. 342. 



FRANCE. 



211 



The special import duty collected by Morocco on these land fron- 
tiers of Algeria and Melilla is 5 per cent ad valorem, except that a 
score of articles pay specific duties, of which the following are ex- 
amples: 

Sugar, 2 francs per 100 kilos. 

Coffee, 5 francs per 100 kilos. 

Tea, 10 francs per 100 kilos. 

Pepper, 10 francs per 100 kilos. 

Spices, 20 francs per 100 kilos. 

Leaf tobacco, 5 francs per 100 kilos. 

Cigars and cigarettes, 20 francs per 100 kilos. 

White flour, 1. 50 francs per 100 kilos. 

Rice, 2 francs per 100 kilos. 

Pulse, 1 franc per 100 kilos. 

Fresh fruit, 1 franc per 100 kilos. 

Dry fruit, 3 francs per 100 kilos. 

These rates when imposed were all lower than the 12J per cent 
collected in the seaports, ^^ and the rise of prices has increased the 
difference. Thus sugar entering Morocco overland pays 17 J cents per 
hundred pounds; entering a Moroccan seaport it pays, if valued at 
5 cents a pound, 62 J cents, but if valued at 20 cents a pound, $2.50 a 
hundred pounds. Upon the articles not enumerated the differential 
in favor of the overland rate into Morocco is TJ per cent ad valorem, 
and the amount of this differential as measured, e. g., in cents per 
pound, has likewise increased with the rise of prices. 

The general rate of the export duty for the overland trade is 
likewise 5 per cent ad valorem, but most of the local animal and 
vegetable products (enumerated under 26 heads) pay specific duties. 
Examples of these specific rates are given in Table 10, where the 
rates for the seaports are also given for purposes of comparison. 

Table 10.— Examples of Moroccan export duties.^ 
[In pesetas Hassani per 100 kilos, unless otherwise stated.] 



Article. 


Duty 
overland. 


Duty in 

the 
seaports. 


Oxen 






} 


5.00 

.50 

3.00 

2.50 

.20 
1.00 

.50 
1.00 

1.00 

1.50 
.20 
.10 

(3) 


{ 

{ 
} 


25.00 


Hogs 




do.... 


10.00 


Fresh meat.... 






2 18. 48 


Wool, unwashed 






13.55 


Wool, washed. . . . 






19.70 


Wax, crude 







24 63 


Wheat 






5.69 


Flour 


4.93 


Dates 


9.08 


Dry fruit.. 


4.93 


Pulse 


7.39 
4.55 


Hides.... 




each 




Skins 




dn 


8.87 


Gold and silver 


4 5 







1 Barthe: Op. cit., p. 19; Annuaire, pp. 212-217. 

2 The odd centimes in this and following rates are due to converting the rate per kantar (or some other 
native measure) to rates per 100 kilos. 

3 Free. 

^ Per cent. 

As the articles enumerated in the schedules are the important ones 
in the export trade of the respective parts of Moro.cco, the differences 
in the duties enumerated are much more important than is the uni- 

17 Upon smoking and chewing tobacco the rate was the same— 15 francs per 100 kilos. 



212 COLOXIAL TARIFF POLICIES, 

formity of the rate of 5 per cent upon all articles not enumerated in 
the respective lists. 

As Melilla is & fre« port, ^^ithout clifTerential duties, the advantage 
of introducing goods into Morocco by this port is not confined to 
Spanish commerce . And while foreign products are, in general, largely 
excluded from Algeria by the French tariff, goods of British origin, at 
least, enjoy in transit the right to the same treatment as French 
goods under the declarations exchanged April 8, 1904 — "The trade of 
both nations v\:ith Morocco and with Egypt shall enjoy the same 
treatment in transit through the British and French possessions 
in Africa." ^^ These declarations were binding for 30 y^ars. A 
dozen years later this stipulation for equalit\^ in the treatment of 
transit trade was put in the form of a treaty and this treaty was like- 
wise made for a term of 30 years, to be continued by five-year 
periods unless denounced a year in advance. ^^ 

As Melilla is practically the only port in eastern Morocco, the 
special tariff may be said to apply to northeastern Morocco both by 
land and b}' sea. Up to the present time the fact that this tariff is 
lower than that collected in the ports of western Morocco has had 
little or no effect, both because to so large a degree the trade has been 
carried on without the pa}T2ient even of this duty and because in the 
absence of communication by rail between the eastern and the west- 
ern parts tlie difference in the duty was not sufficient to pay the cost 
of transportation overland. But since July 21, 1921, when Marshal 
Lyaintey fastened the last bolt of the railroad between Oudj da and 
Fez, the situation has been quite different. The absence of a railroad 
inland from Melilla now gives the French a great advantage in their 
trade with Morocco. 

After the estabhshment of Melilla as a free port, the French largely 
lost the trade of the hinterland, e. g., they sold at Oudjda only '^a. 
few matches and a few meters of cloth." ^^ Sugar was then paying 
on entry to Algeria a duty of over 100 per cent of its value, and coffee 
75 per cent^so that not only was trade through Algeria to Morocco 
impossible, but considerable quantities of goods reached the Algerian 
markets by way of Morocco, and even through the ports of western 
Morocco. This situation stiU prevails to a shght extent, and it is 
complained that goods imported in transit through Algeria into 
Morocco are then smuggled back into Algeria.^^ For many years there 
has been a recurrent demand that the law of 1867 be repealed, espe- 
cially that part of it which permits the manufactured products of 
Morocco to enter Algeria free. The Government proposed such a 
law in 1913, but it was not passed.^- 

18 Brit, and For. State Papers, vol. 97, p. 39. As Augustin Bernard remarks (op. cit., p. 381), this pledge 
raises the " delicate question" whether the most-iavored-nation clause anplies to engagements of this nature. 

w Treaty of Aug. 24, 1916, Gt. Brit., Pari. Papers, Treaty Series, 1916,''No. 7, Cd. 8403. The treaty states 
explicitly that the trade in question is that with Morocco through Algeria, Tunis, or other French territory, 
and with Egypt through British East Africa (now Kenya) and Uganda. 

20 D^chaud: Le Commerce Aigero-Marocain, Algiers, 1903, p. 17, 

•21 Ibid., p. 27. 

22 The bill was presented on Nor. 28, 1913; the committee on customs reported on the matter on Dec. 25, 
1913, and it was debated on Mar. 11. The Government proposed to repeal the law of 1867 but to permit 
certain animal and vegetable products of the French zone of Morocco to enter Algeria (and France) free in 
quantities to be determined annuallv bv decree of ihe Government. The committee reported in favor of 
limiting the quantities by law. (I.'Airique Frangaise, 1914, vol, 28, Supplement, pp. 146-151.) The 
Government accepted this change, and the matter was again taken up on June 2.5, 1914, At tliis time the 
committee shov.-ed itself somewhat more liberal than the Government in proposing quotas to be admitted 
annually. For instance, the average im^portation from Morocco to xVlgeria for the preceding five years had 
"been stated as lS,.5D0head oicattleand 160,000 head of sheep; the Government proposed quotas of f 8, 500 and 
335,000, respectively, and tlie committee proposed 20,000 and 350,000. (France was an exporter of cattieanii 
an importer of sheep. i The average importation of wheat and barley into France from Algeria had been 
o2-,000 quintals— a very small fraction of the total importation which was, e. g,, In 1912, 7,100,000 quintals 



FRANCE. 2 IB 

More important was the demand for better facilities for trading 
with Morocco by way of Algeria, French goods had indeed been 
entering Algeria free of customs duty for several decades, but they 
were not exempt from the octroi de mer, which was levied chiefly on 
alcohol, mineral oils, sugar, tea, coffee, and spices. The demand for 
better transit facilities was met by a law of April 16, 1895, and a 
series of decrees in execution of this law.^^ The decree of December 
17, 1896, permitted free transit across Algeria of French and French 
colonial sugar, of alcoholic products, such as perfumes, varnishes, 
medicines, ^tc, of French origin and, when imported directly into 
France or Algeria from a country outside of Europe, of mineral oils, 
coffee, tea, pepper, and other spices. The decree of February 1, 1902, 
added cotton cloth and tea, regardless of origin, and added Ain Sefra 
to the list of places through which reexportation might take place.^^ 

These products are shipped in sealed packages, and 25 centimes is 
paid for each seal. There are further expenses connected with the 
escort which the French send with each caravan to assure themselves 
that the goods are really carried from the last French to the first 
Moroccan customhouse.^^ By arretes of the governor general of 
Algeria, January 10, 1902, and January 24, 1903, the Sud Oranais 
Railroad to Ain Sefra was also open to 'international transit, "^^ and 
this transit now extends to Beni Ounif and Colomb Bechar.^^ This ' 
transit is in sealed cars and involves much less formality than that 
mentioned above. Ain Sefra is far south of the fixed Algero-Moroc- I 
can frontier, and the trade of this region is apparently in theory 
subject to the regular Moroccan duty of 12 J per cent. In the absence ; 
of customhouses, however, the Algerian Government pays annually \ 
a lump sum to the Moroccan Government on account of this trade.^^ 

As the products of Algeria and Morocco are very similar, most of 
the trade between the two countries is transit trade in foreign prod- 
ucts, though considerable numbers of Moroccan cattle are marketed 
in Algeria. Commerce between the two countries was valued in 
1884 at only 2,000,000 francs and had increased in 1913 to 40,000,000, 
in 1917 to 66,000,000, and in 1919 to 134,000,000 francs. These are 

of wheat alone. But the Government proposed to admit free into Algeria only 105,000 quintals of Moroccan 
Wheat and barley annually, and the committee proposed only 100,000 quintals each of barley and hard wheat. 
(France produces almost no hard wheat and Morocco little else.) For fresh vegetables and dry legumes, 
the committee suggested a quota of 5,000 quintals, though the average export of Morocco to Algeria had been 
only 540 quintals, bat they attached to this proposal the same limitation which had been contained in a 
Government bill of Apr. 3, 1912, relative to free admission of Tunisian vegetables, namely, that admission 
should be free only to the beginning of the French season — e. g., tomatoes should enter from December to 
June, inclusive, and peas and potatoes from March to April, inclusive. 

This Id^ was torestrict importation into Algeria, but most of the argument was in regard to importation 
into France, since the payment of duty in France on products of Morocco reexported from Algeria is only 
theoretical. It is evident from the discussion that the agriculturalinterests of Franeeare quite indifferent 
totheideaofpromotingFrenchcolonialinterestsby tariff concessions on agricultural products. 

For a most glowing account of the agdculturalpossibilities of Morocco with its "twelve to thirteen mil- 
lions [!] of people," and for a full discussion of matters referred to here see the hundred-page report of the 
committee, especially p. 62 fl. Barthe: Op.cit. * * *. 

23 Pallain: Op. cit., vol. 1, pp. 394, 420, 468. 

24 Ibid., vol. 4, p. 492. The cloth mentioned is pure cotton, plain, bleached or unbleached, weighing 
more than 5 kilograms per 100 square meters, and longcloth (guinees) of French India. 

25 Dechaud: Op. cit., pp. 21-29; Harris and Cozens-Hardy: Modern Morocco, London, 1919, pp. 63-64, 
The ports through which thistrade may enter and through whichit must be exported are specified from 
time to time. The decree of May 2, 1915 (apparently the latest on the subject), designates the ports of reex- 
portation to northern Morocco as Adjeroud Kiss, Lalla Marnia,and El Aricha,and any others which may 
be established between Teniet Sassi and the sea. The goods are super\'ised until their entry into the 
Moroccan customhouses, at Saidia, Martimprey, Oudjda, and Debdou. The escort consists of one, three, 
or four cavalrymen, according to the size of the caravan, and the fee is 2.50 francs each per day, from the 
time the men are assigned to the caravan until their return to the point of departure. 

2« Pallain: Op. cit., vol. 1, p. 183; Dechaud: On. cit., p. 25. 
" Harris and Cozens-Hardy: Op. cit., p. 64. 
28 Annuaire, p. 59. 



214 COLO^^IAL TARIFF POLICIES. 

the official figures/^ but the chambers of commerce of the locahty 
beheve that the trade is much greater than this. The provisions of 
1896 and later years for free transit across Algeria have so far resulted 
in no great increase in the trade. Goods to the value of 2,000,000 
francs took advantage of the provision in 1897, but this trade had 
increased in value by 1909 only to 3| m-illions.^^ 

SOMALILAND, 

Commercial importance.— French Somaliland ("French coast of 
the Somalis") has a population of only about 200,000, and its average 
total commerce in the years 1909—1913 was only 65,400,000 francs. 
Thus it ranks in gross commerce after Dahomey and the Ivory Coast, 
it has less than one-third the trade of Morocco, and one-fourth that 
of Tunis. But while Somaliland's total trade is less than 2J per cent 
of the total trade of all the French colonies combined, its recent 
growth has been more rapid than that of the trade of any other 
colony. The earliest statistics published are for 1899. The growth 
since then is shown in Table 1 1 . 

Table 11. — Grou-th of commerce of French Somaliland, 1899-1918. 
[In millions of francs.] 



Year. 



Total i Total Total 
imports. I exports. trade. 



1899 3.3 

1904 10. 6 

1909 : 15. 5 

1913 ! 33.9 

1918 67.4 



1.9 


5.2 


15.1 


25.7 


25.7 


41.2 


47.7 


81.6 


75.6 





1 Exports the produce of Abj^ssinia. 

Most of this trade, however, is transit or reexport trade, and the 
greater part of it is thus included twice in the ofiiq.ial total. In 1913 
imports for consumption were less then seven million francs,^^ while 
exports, the produce of Somaliland, were valued at only 68,000 
francs. The statistical excess of total exports over imports is due to 
keeping no record of imports from Abyssinia, though the exports of 
Abyssinian produce are recorded and amount to approximately half 
the export trade. The export trade of 1913 may be classified thus 
(in millions of francs) : » 

Exports the produce of Abyssinia = 20. 6 

Transit trade to Abyssinia — 

French goods , " 4. 7 

Foreign goods = 15. 5 

Reexports by sea — 

French goods 1.2 

Foreign goods ; 5. 5 

Tariff. — No import or transit duties. — Import duties of any great 
amount would drive this important transit trade to other points. 

29 1, e. the AlEjerian figures, which include the trade south of Teniet Sassi and imports on behalf of the 
corps of occupation in Morocco. The Moroccan figures (1911-1916) for the customhouses northward from 
Teniet Sassi, are one-half to two-thirds as great for imports, and one-third to one-half as great for exports, 
(lb., p. 90.) 

30 Harris and Cozens-Hardy: Op. cit., v. 64. 

SI The Statistiques Coloniaies suggests that a large part of these imports also find their way into Abyssinia. 



FKANCE. 



215 



Transit duties for any fiscal purposes are forbidden by a treaty of 
December 13, 1906, between France, Great Britain, and Italy .^^ 
Article 6 of this treaty provides that — 

the three Governments agree that the -Jibuti Railroad shall be prolonged from Dire 
Dawa to Adis Abeba with a branch line to Harrar eventually * ^ "^ on con- 
dition that the nationals of the three countries shall enjoy in all inatters of trade 
and transit absolute equality of treatment on the railroad and in the port of Jibuti. 
Goods shall not be subject to any fiscal duty levied for the benefit of the French colony 
or treasLjy. 

Article 7 contains a similar provision in regard to any railways which 
the English or Italians might construct and in regard to their ports of 
origin in British or Italian Somaliland, and concludes with the para- 
giaph: 

The three signatory powers agree to extend to the nationals of all other countries 
the benefit of the provisions of articles 6 and 7 relating to equality of treatment as 
regards trade and transit. 

The provision that there sha.ll be no fiscal transit duties does not 
forbid the levy of a so-called '^registration tax" intended to cover 
the expense of supervising the transit of arms and alcohol. The 
rates seem comparatively high, e. g., guns, 8 francs each; cartridges, 
5.50 per hundred; powder, 50 centimes per kilogram. 

Consumption duties.— Somaililaiid falls within the territory between 
20° north and 22° south, within which the minimum import duties 
on alcohol have been fixed from time to time by international treaties. 
These agreements, including the Brussels antislavery act of 1890, 
and the conventions of June 8, 1899, and November 3, 1906, succes- 
sively set the minimum rate on alcohol of 50° strength at 15, 70, and 
100 francs per hectoliter. The 2 francs per hectoliter per degree paid 
in French Somaliland is the equivalent of the last-named rate. Other 
alcoholic drinks pay as follows: Beer and cider, 7 francs per hecto- 
liter; wines, 8 to 50 francs; absinthe, 20 francs; absinthe essences, 
40 francs. 

The consumption duties fall also on tobacco, sugar, cereals, oils, 
dynamite, and a few other articles. The rates, except on dynamite 
and edible oils, are much lower than those of the French minimum 
tariff, averaging roughly perhaps one- third of those rates. 

The list decreed in 1900 was very much longer than the present 
list. It included specific rates on bicycles, candles, nails, pianos, 
iron, copper, lead, and zinc in different forms, and a general ad 
valorem rate of 5 per cent on all articles not enumerated. 

Export duties.— The list of export duties is one of the longest among 
those of the French colonies, but most of these duties are disguised 
under the name of droits de verification and de controle. They are 
as follows : 



Raw hides, 3 francs per 1,000 kilos. 
Ivory, 10 francs per 100 kilos. 
Rubber, 5 francs per 100 kilos. 
Coffee, 1.50 francs per 100 kilos. 
Wax, 5 francs per 100 kilos. 
Building stone, 1 franc per cubic meter. 
Native butter, 2 francs per 100 kilos. 
Coffee containers, empty, ^^ 5 francs per 

kilo. 
Opium, 25 francs per kilo. 
Pearls, amber, 5 per cent. 

«2 Declared in force by decree of Jan. 30, 1909. Dislere: Op. cit., 3d Sup., 1909, pp. 1, 2. 
83 In French, fardes, i, e., bales of cofEee packed for transport by camel. 



Mother-of-pearl, coral, sponges, 50 francs 

per ton. 
Giraffes, 50 francs each. 
Lions, zebras, 25 francs each. 
Horses, mules, 16 francs each. 
Camels, 12 francs each. 
Asses, 6 francs each. 
Cattle, 4 francs each. 
Sheep, 1 franc each. 
Goats, 0.50 franc each. 



216 COLONIAL TARIFF POLICIES. 

The last two items of the first column are alone designated '^ export 
duties.'' There is also a droit de controle on alcohol,, levied as a 
transit or export duty, but not on reexportation, of 13 francs per 
hectoliter, or, if the strength is above 50*^, of twice that amount. 

DAHOMEY AXD THE IVORY COAST. 

Commercial imfortance. — Dahomey and the Ivory Coast are the 
two parts of French West Africa M'hich extend southward to the 
sea between Togo and Nigeria, and Liberia and the Gold Coast. 
They have populations of 860,000 and 1,400.000 respectively, in- 
cluding about 1,400 Frenchmen and 200 other non- Africans. In 
1919 the total trade of Dahomev was 114,000,000 francs and of the 
Ivory Coast, 52,000,000 francg. 

Tariff— Treaty frovisions of 1898.— As part of the solution of 
various controversies between France and Great Britain, the French 
agreed in 1898 that they would give for 30 years in these territories, 
^' the same treatment in all that concerns river navigation, commerce, 
the customs and fiscal regime, and taxes of all kinds'' to the English 
as to their own subjects. The treaty mentioned only the English, 
but all countries which had most-favored-nation treaties with France 
received the benefit. ^' The treaty made, however, little change in 
the situation, for such equality of treatment already existed, fully in 
Dahomey and partly in the Ivory Coast, ^^ but the English regarded 
it as a safeguard for the future, and if the French had less reason 
to fear a change of tariff policy on the part of their English neighbors, 
they received a guaranty of equal treatment for a much larger ter» 
ritory than that for which they gave such a guaranty. 

Even at that time the French did not have an enth^ely free hand in 
these territories, for freedom of navigation of the Niger and its afflu- 
ents had been agTeed to at the Congress of Berlin, and in 1887 France 
had agreed with Germany that Togo and Dahomey should con- 
stitute a single tariff territory with no customs on theu' common 
boundary, and that they should collect for the seacoast the uniform 
rates then agreed upon. Tobacco^ powder, guns, rum, and gin were 
the only articles then taxed; but in 1889 the rates were doubled 
and salt was added to the list. 

Import duties. — The decree of Aprill4, 1905, established a three- 
column tariff for West Africa. The third column contained the rates 
for Dahomey and the Ivory Coast, while the first two columns con- 
tained, respectively, the import duties on goods of all origins and the 
surtax on foreign products for the Remainder of West Africa. A 
similar decree for textiles was issued on March 3, 1914. The free 
list for Dahomey and the Ivory Coast is the same as that for the 
remainder of West iLfrica, including the free list for cattle. The 
list of articles on which a duty is levied in these two colonies differs 

^i The British commissioners suggested that the tariffs in each colony be applicable to all merchandise 
vrithout distinction and emphasized the point that the acceptance of this principle would facilitate the set- 
tlement of the territorial questions. The French accepted this as a basis of negotiation, but stipulated that 
it was to hold for a limited time only, and "the French commissioners called attention to the point that in 
principle the obligations under the provisions o the final an'angement on this subject naturally could not 
extend beyond merchandise of French and British production and origm. " (Mmistere des Colonies. 
Documents Diplomatiques. Correspondance et documents relatifs a la Convention Franco- Anglaise du 
14 Juin, 1898. (Paris, 1S99) pp. 30, 32.) 

35 Statement by Delcass6, m de Clercq, op. cit. vol. 21, p. 402. 



FRANCE. 217 

from the dutiable list for the remainder of West Africa only in the 
omission of palm and other oils from the former. The rate of duty 
in the two colonies is in general greater than either the basic rate 
which is applied in the remainder of West Africa to all goods, includ- 
ing those of French origin, or than the surtax payable on foreign 
products alone. It is less than the sum of these two rates. On 
those articles, including all of those not specially mentioned, for 
which the general West African rate is 5 per cent and the surtax on 
foreign goods 7 per cent, the rate in Dahomey and the Ivory Coast is 
10 per cent. Cocoa beans and cocoa in the husk pay 52 francs per 
100 kilograms instead of the ad valorem rate. 

The Brussels convention of 1899 fixed the general rate of duty on 
alcohol for the African territory between 20° north and 22° south at 
70 francs per hectoliter of alcohol of 50° strength, but by exception 
permitted a rate of 60 francs in Dahomey and Togo. Since then 
the rate has been greatly increased. The Brussels convention of 

1906 raised the rate generally to 100 francs, and this applied to 
Dahomey, which had formerly been given exceptional treatment, as 
well as to the Ivory Coast, which had been subject to the general 
rule. The rate of 100 francs per hectoliter of 50° alcoholic strength 
is expressed in the West African tariff as 200 francs per hectoliter of 
pure alcohol. The French increased this rate of 200 francs to 220 
francs in 1912, to 300 francs in 1915, and to 330 francs in 1916. In 

1907 the droit d'importation in Senegal was equal to the duty — that 
is, it was 200 francs per hectoliter of ptire alcohol. Foreign alcohols 
paid a surtax of 30 francs in addition to this. In 1915 and 1916 the 
duty plus the surtax in Senegal was just equal to the duty in Daho- 
mey and the Ivory Coast. The rates on wine have been increased 
also, though the decree of November 1, 1916, restored to 10 per cent 
ad valorem the rate on wines with less than 15° of alcohol.^*' 

The duties collected in Dahomey and in the Ivory Coast are not 
altogether the same. In the former, kola nuts and building mate- 
rials are free, and there are lower rates than in the latter on tobacco^ 
gunpowder, and saltpeter. In the Ivory Coast coffee pays a specific 
instead of the ad valorem rate. A general revision of the West African 
tariff was made by a decree of November 1, 1916. This revision 
adds some items to the free list and many items to the list of com- 
modities taxed at specific rates, and it increases the rates on others. 
The textile rates of 1914 are increased 15 per cent. (See p. 199 for 
some of the specific rates of Dahomey and the Ivory Coast.) 

Export duties, — The considerable list of export duties previously 
found throughout West Africa on coffee, palm oil, nuts, etc., was 
swept away in 1905 and only the 7 per cent duty on rubber remained. 
But the war has again introduced a long list of duties. Rubber 
remains at 7 per cent; ivory pays 10 per centf^ palm oil 66 francs 
per 1,000 kilograms; and the dutiable list includes peanuts, kola nuts, 

36 The French legislation of 1915 prohibiting the sale or manufacture of absinthe is applicable to all the 
colonies, as is also later legislation prohibiting the sale of alcohol generally. 

s7 According to theexchange of notes on Jan. 22, 1895, between M. Hanotaux and the English ambassador 
in Paris, "the export duties' should not exceed in any case 7 per cent ad valorem according to the official 
valuations of each colony." This sentence is a separate paragraph in art. 3 of the agreement, but as the 
agreement was concerned exclusively with the boundary betwe&n Sierra Leone and French Guinea and 
the French Sudan, this sentence should doubtless be construed to refer to the land frontiers in spite of the 
general way m which it is worded. It follows immediately after the statement that there should be mo 
higher import or export duties upon the land frontier then agreed upon than upon imports or exports by 
sea. (Ministfere des Colonies. Documents Diplomatiques. Delimitation des Possessions Fran?aises & 
la C6te Occidentale d' Afrique, 1889-1895. Paris, 1895, p. 20.) 



218 COLONIAL TARIFF POLICIES. 

gum arable, gum copal, cocoa, grains, horses, cattle, sheep, skins, wool, 
animal wax, feathers and bird skins, and charcoal.^^ 

Exports to France. — Under the power conferred upon the Govern- 
ment by the law of 1892, to decree special exemptions or reductions 
from the .French minimum tariff for the benefit of the nonassimilated 
colonies, four decrees have been issued affecting Dahomey and the 
Ivory Coast. Since 1892 palm and other oils and woods have been 
admitted from these colonies, as part of West Africa, free and in 
unlimited quantities. Later decrees grant only reductions of duty, 
and these only for quantities prescribed by decree annually. Coffee 
from West Africa ^^ has been admitted since 1892 at a rebate of 78 
francs per hundred kilograms. "^^ Cocoa from Dahomey has been 
admitted at one-half of the general tariff rate since 1907 and from 
the Ivory Coast since 1911.^^ 

FRENCH INDIA. 

Commercial importance. — Of the French Empire in India, five 
scattered fragments remain.^^ Their total area is less than 200 
square miles, and their total population less than 300,000. Their 
average total trade for the years 1909-1913 was 36,600,000 francs. 
In 1913 they exported less than 11,000,000 francs worth of their 
own products, while goods valued at over 32,000,000 francs passed 
through in transit. 

Tariff — Duties on spirits only, — The tariffs in the French settle- 
ments in India are fixed individually for the different settlements, 
although they are prepared upon the advice of the general council 
of the French settlements in India. The only duties levied in the 
settlements are those on liquors.*^ Monopolies have been granted in 
all of these settlements except Chandernagar, on spirits and opium, 
and the Government gets the equivalent of a customs duty from 
the concessions. There is also a state monopoly on salt in the 
same settlements, and in Pondicherry there is a monopoly of tobacco. 
In addition to the monopoly, there are also in Pondicherry, Karikal, 
and Chandernagar consumption duties on beverages imported or 
manufactured in the colony, as follows: 

Wine in casks, 4 rupees ^^ per hectoliter. 
Wine in bottles, 6 rupees per hectoliter. 
Cider and perry, 4 rupees per hectoliter. 
Beer in casks, 3 rupees per hectoliter. 
Beer in bottles, 4 rupees per hectoliter. 

Spirits, liquors, etc., of European origin or form, pay 90 rupees 
per hectoliter of pure alcohol in the tvfo former and 120 rupees in 
the last-named colony. 

38 Decree of Nov. 1, 1916. Coefficients of increase have been applied to some export duties (B. T. J. 
July 21,1921). 

3s In practice from the Ivory Coast and Guinea. Coffee is not mentioned among the exports of Dahomey 
In 1914, and in 1913 the exportation was 119 kilograms, of which 27 went to France. 

^0 The rebate accorded to the assimilated colonies from 1892 to 1913. 

^1 See table on p. 195. 

^2 The ports are Pondicherry, Karikal, Mahe, Yanaon, and Chandernagar, but the last named has been 
so silted up as to make it practically useless as a port. 

43 Except in the case of mineral oils in Pondicherry and Karikal where there Is a consumption tax on 
imports and on local production not exported of 2 fanons per can of 19 liters. 1 fanon equals $0.05^. 

" The rupee equals $0.32443. For change in value during the war, and for recent plans regarding the 
rupee see p. 331. Four rupees per hectoliter equals nearly S0.05 per gallon. 



EKANCE. 219 

Exports to France and to otlier colonies, — The tariff act of 1892 did 
not include the French settlements in India in the lists of assimilated 
colonies. But by exception from the rule that the products of the 
non assimilated colonies are subject to the minimum tariff in France, 
it was provided that '^longcloth ^^ of French origin proceeding from 
the French settlements in India shall, however, be free of duty'' in 
France. 

All products of French India were admitted free into the other 
French colonies, under the rule of intercolonial free trade, from. 1892 
to 1904, but in that year, on account of the difficulty of determining 
the origin of articles exported from these scattered settlements/® 
their products were excluded from the benefit of this rule — except 
that — 

French India shall, however, be entitled to import annually into the French 
Colonies free of duty, 2,000,000 kilograms of cotton fabrics of all kinds up to No. 26, 
French; 1,500,000 kilograms of yarn limited to No. 20. The exemption shall not be 
granted to fabrics unless they have been woven from yarns manufactured at Pon- 
dicherry.^^ 

EQUATORIAL AFRICA. 

Commercial importance. — According to estimates made in 1915, 
Equatorial Africa contained a population of 6,270,000. The Prov- 
inces of Gaboon, the Middle Congo, Oubangi-Chari, and Chad were 
said to have, respectively, 1 ,300,000, 1 ,390,000, 1 ,590,000, and 2,090,000 
inhabitants There are available no figures, either for population or 
for trade, which correspond to the tariff divisions of the country. 
The average total trade of the Middle Congo and Oubangi-Chari-Chad, 
which include most of the open-door territory, for the years 1909-1913 
was 28,500,000 francs. 



Treaty provisions — Conference of Berlin — TJie open door. — The 
geographical basin of the Congo forms the bulk of the territory con- 
trolled by the general act of the conference of Berlin (1884-85) pro- 
viding for free trade in Central Africa v/ith no discriminations against 
merchandise of any origin or under any flag. It appears first in the 
definition of this territory in Article I of the act. This territory, 
together with additional areas both on the east and on the west, is 
generally known as the Conventional Basin of the Congo. On the 
Indian Ocean this open-door zone extends from 5° north to the 
mouth of the Zambesi and on the Atlantic from 2° 30' south to the 
mouth of the Loge. From the coast at 2° 30' south, understood to 
be Sette Kama, the boundary of the open-door zone runs straight 
east, except where it bends southward to avoid the basin of the 
Ogowe, and, returning 1k) the parallel 2° 30' south, follows that line 
to the basin of the Congo proper. Accordingly, French Equatorial 
Africa, which is situated astride this line, and even that part of it 

*^ The character of this cloth, known jn French as guineas, is defined in a decree of Dec. 29, 1911, Circ. 
4225. 
« Arnaune: Op. cit., p. 409. 
« Law of Apr. 19, 1904. There are four cotton mills at Pondicherry with 1,600 looms and 171,000 spindles. 

185766°— 22 15 



220 . COLOXIAL TARIFF POLICIES. 

known as Gaboon,*^ is divided for tariff purposes into two parts. 
The basin of tlie Ogowe and the northern part of the coast is assim- 
ilated and has the French tariff ,^^ while the southern part of the coast 
and the great interior has a simple tariff of ad valoreni rates in no 
way related to that of France.^^ The Lake Chad country lies largely 
outside of the Congo Basin, but comes within the equality provisions 
of the treaty of 1898 with Great Britain ^^ by provision of a com- 
plementary declaration of March 21, 1899, which guaranteed the 
open door in the territory between 5*^ and 14° 20' north and 14° 20' 
east and the Nile. 

Tlie open door. — The general act of the conference of Berlin laid 
down very precise rules for the commerce of Central Africa, stipu- 
lating that ''commerce of all nations shall enjoy complete liberty'' in 
the territory described; that ''all flags, without distinction of nation- 
ality, shall have free access to the whole of the coast of the aforesaid 
territory, to the rivers flowing into the sea, to all the waters of the 
Congo and all of its affluents," etc.; that ''merchandise of ever^^ 
origin imported into these territories under whatsoever flag, by sea 
or by river or by land, shall pay no other duties than those which 
might be levied as an equitable compensation for expenditure for 
commerce and which must therefore be paid equally by nationals 
and by foreigners of every nationality" ; that "all differential treat- 
ment is forbidden in regard to ships as well as to merchandise"; 
that "merchandise imported into the aforesaid territories shall be 
free from import duties and transit duties"; and that "foreigners 
shall enjoy, without distinction, for the protection of their persons 
and their goods, for the acquisition and transmission of property, 
movable and immovable, and for the practice of professions, the 
same treatment and the same rights as nationals. "^^ 

Brussels conference. — The conference of Berlin, by forbidding the 
imposition of import duties, compelled the states concerned to rely 
largely on export duties. The revenue from the duties levied proved 
insufhcient, especially for the needs of the Congo State, though the 
rates were higher than are now thought, for economic reasons, desira- 
ble. This unsatisfactory fiscal situation was modified by the con- 
ference of Brussels in 1890, which by a declaration added to the main 
act, allowed the levying of import duties not exceeding 10 per cent 
ad valorem in the Conventional Basin of the Congo. ^^ This confer- 

*8 Gaboon was enlarged by decree of Feb. 11, 1906, so as to include the Loango and Nyanga-Mayiimbe dis- 
tricts, wMchi are Avithin the Conventional Basin of the Congo. Gaboon outside of the Conventional 
Basin then had only about one-eighth of the total area of Equatorial Africa. Girault: Op. cit., pp. 293-294. 
In 1918 a strip of coast extending for some miles north of the river Kwilu was added to the Middle Congo, 
but Gaboon still includes territory within the Conventional Basin, and the Middle Congo, territory outside 
of that basin. See maps with the article by H. Pobeguin. L'Afrique Francaise, Nov. 1920, Sup. pp. 
186-198. 

<9 With exceptions, see pp. 169, 171. 

60 At Sette Kama there are two customshouses, one north of the dividing line and collecting the French 
tariff rates upon foreign goods while admitting French goods free, and one south of the line, collecting 
the moderate duties of Equatorial Africa. French goods enter through the northern, and foreign goods 
throutjh the sornhern, customhouses, and after being carried inland are distributed on both sides of 
the line. (L'Economiste Franeais, July 10, 1920, p. 38.) 

51 Seep. 144. 

52 Arts. 1-5. Arts. 13-25 and 26-33 deal with the freedom of navigation of the Congo and its affluents, 
and of the Niger. For a more extended discussion of this treaty, including the revision negotiated in 
1919, see pp. 85fi. 

53 Declaration of July 2, 1890. In 1885 the powers had reserved the right to revise the prohibition on 
import duties at the end of 20 years. The declaration of 1890 was valid for 15 j'ears, so that it has been 
subject to revision, by the earlier agreement, since 1905. For the revision of 1919, not yet ratified, see p. 121. 
Circulaire N o. 4342, amiormcing the tariff of 1912, mentions that since the denunciation of the treaty with 
Portugal, the tariff of Equatorial Africa is restricted only by the principles laid down in 1885 and 1890. 



FRANCEo 221 

ence decided further that the sale of arms within the territory be- 
tween 20° north and 22° south (inckiding French Equatorial Africa, 
West Africa, and Somahhind) should be limited (Arts. 8 and 12), 
and that the rate of duty on alcohol should not be less than 15 francs 
per hectoliter on liquors of an alcoholic strength of 50° and that 
after three years the rate might be raised to 25 francs (Arts. 90-95). 
This minimum rate on alcohol was amended to 70 and then to 100 
francs per hectoliter, and the revision signed in 1919 raises it to 400 
francs.^'' 

Arrangement with Portugal and the Congo State,— By the protocol 
of Lisbon, April 8, 1892, France, Portugal, and the Congo Free State 
agreed upon a common tariff for their territories in the Conventional 
Basm of the Congo. This agreement provided for import duties ^^ 
of 6 per cent on goods generally. By exception, arms and ammuni- 
tion and salt were to pay 10 per cent. Alcohol was already provided 
for by treaty. Ships and boats, steam and similar machines and 
lools for industry and agriculture, were to pay 3 per cent after a 
tapse of four years. Railway materials and equipment of all kinds 
were to pay 3 per cent after the completion of the railway in ques- 
tion. Scientific instruments, religious equipment, and the baggage 
of travelers and colonists were to enter free. The export duties 
agreed upon in 1892 were 10 per cent on rubber and ivory (on valua- 
tions to be fixed yearly), and 5 per cent on coffee, palm oil and 
kernels, groundnuts, copal, and sesame. This agreement was effec- 
tive for 10 years and was continued from time to time without 
other changes than the raising of the general rate from 6 to 10 per 
cent in 1902,^^ until the agreement was finally denounced by France 
on July 2, 1911. The rates were continued provisionally until a 
new tariff was established by decree of October 11, 1912. 

The tariff of 1912. — The tariff decree of 1912 made little change in 
the system. It established rates of 3 per cent on coal, heavy and 
crude oils, machines, vessels, and railway materials; 5 per cent on 
animals, grain, building materials, iron and steel, sheet iron, and 
construction iron; and 10 per cent on all other articles. Cocoa, 
coffee, vanilla, tobacco, dry manioc, and exotic woods were specially 
mentioned as dutiable at this rate. The rate on alcohol was 200 
francs per hectoliter of 100° strength, in accordance with treaty 
requirements. 

Export duties,— Bj the decree of 1912 the other items on the export 
duty list were dropped, leaving only the 10 per cent on rubber and 
ivory. A decree of December 14, 1914, established export duties 
of 5 per cent on whalebone, 3 per cent on oils and fats from fish, 
whales, seals, etc., and one-half per cent on fertilizers and wastes 
from these animals,^^ and, a decree of January 12, 1921^ added duties 
of 5 per cent on palm oil and palm kernels. 

Exports to France. — ^Exports from French Equatorial Africa enter- 
ing France have the benefit of two slight reductions — coffee in the 
bean i>ays 124 francs instead of the minimum rate of 136 francs, and 
cocoa in the bean pays 95 francs instead of 104 francs. These reduc- 

64 1. e., 800 francs per hectoliter of pure alcohol, 

■«* The French called their duties droits d' importation, to avoid the term droits de douane, which in their 
usage is confined to such duties as fall only on foreign goods. 

56 The valuations were raised simultaneously l)y the three countries in 1907. 

^^ There is a special taxe de recolte on all rubber produced on land not included in special concessions, in 
order to prevent others ftorii having au advantage over the concessionnaires. 



222 COLONIAL TARIFF POLICIES. 

lions, made by the decree of April 22, 1899, were limited by the 
rule followed in all such cases that the reduction must be offset by a 
duty of like amount on foreign imports into the colonies. As the 
duties in Equatorial Africa were limited to 6 per cent at that time, 
the reduction could be only the small amomit named.^^ Since, the 
duty was increased to 10 per cent no change has been made in the 
preferences. The quantities of coffee and cocoa to be admitted at 
these rates are fixed annually. 

NEW HEBRIDES. 

Commercial importance. — The population of the New Hebrides Is- 
lands is estimated at 70,000, including over 1,000 British and French. 
In 1914 the trade with the French colonies w^as 2^440,000 francs. 
The Interstate Commission of Australia in a report published in 1918 
accepted estimates placmg the total imports at £150,000 (3,675,000 
francs) and the exports at £140,000 (3,440,000 francs).^''^ 

Tariff — Duties estahlislied hy Franco-Bntish treaty. — Since Great 
Britain and France agreed in 1878 that neither would annex the New 
Hebrides, a joint administration has been developing, and the situ- 
ation is now governed by the treaty of London, ratified October 20, 
1906. This provides that there shall be no differential duties in the 
New Hebrides, and no duties of any kind except such as the French 
and English shall agree upon. For some years there were no import 
duties, but a joint regulation of December 2S, 1912, established the 
general rate of 5 per cent on all articles except those on the free list 
and a score of items where the duty is specific. Tw^o years later, the 
general rate was maxle 10 per cent; and coffee, cocoa, vanilla, and 
aUspice were added to the list of items subject to specific duties. The 
free list included cereals, fresh fruits, vegetables, and animals; agricul- 
tural, electric, mining, sawing, sugar and coffee-making machinery; 
all sorts of boats and their equipment; steam engines and boilers; 
books and other printed matter; coal, cement, drugs, and surgical 
instruments. The duties enumerated include 20 per cent on certain 
alcoholic drinks; 100 per cent on detonators and aU arms (other than 
those of precision and revolvers for the exclusive use of the importer, 
which pay 10 per cent); ll^d. per kilogram on tobacco; Is. 7^d. 
upon cigars and cigarettes; and heavy duties on coffee, cocoa, 
vanilla, and allspice. The duties on the last-mentioned products are, 
respectively, £12^£4 3s. 2d., £32, and £16 per 100 kilograms, i. e., 
the rates of the French general tariff. 

Exports to France. — ^A iaw^ of July 30, 1900, authorized the Gov» 
ernment to determine definitively ^Hhe customs regime appHcable 
in France and the French colonies to the produce of the Isles and 
lands designated, [when] harvested or fabricated by agricultural or 
commercial estabhshements owned or exploited by Frenchmen, or 
by French civil or commercial companies.^' Accordingly by decrees 
of November 12, 1901, it was provided that certain products of the 
New Hebrides should be admitted at special rates to France and 
New Caledonia. The quantities were to be fixed annually by decree, 
and the amount of each product which each French producer or com- 

^Araaun^: Op.cit., p. 4n. 

69 Interstate Commission of Australia: British and Australian Trade in the South Pacific, 1918, p. 13. 



FKANCE. 223 

pan37" might export at these reduced rates should be determined by 
the Commissaire General de la Kepublique dans I'Ocean Pacifique. 
Direct importation is required, but transshipment at Noumea (New 
Caledonia) is allowed. The articles named in 1901 were coffee, 
cocoa, vanilla, and maize, and the rates on the first three were those 
accorded to the assimilated colonies by Table E of the French tariff 
schedules.^^ 

On maize the rate was 2 francs instead of the 3 francs of the gen- 
eral tariff. These were the only articles in which there was at that 
time a trade of any importance. In the following year free importa- 
tion into New Caledonia was granted for the fruits of the New He- 
brides — bananas, oranges, pineapples, lemons, breadfruits, etc. — and 
3^ams, without limitation as to quantity. A decree of April 16, 1904, 
allowed limited quantities of maize to enter New Caledonia (but not 
France) free, and permitted limited quantities of all products of the 
New Hebrides to enter any other colony free. The nature and the 
quantity of these products were to be fixed in the same way as by 
the law of 1901 . The decrees regulating the amounts which may thus 
be exported to the colonies other than New Caledonia have not as 
yet specified with regard to any items except coffee, cocoa, and 
vanilla, and in some years the last named has been omitted. No 
specification has been made regarding the quantity of maize which 
may be sent into France at the reduced rate.^^ 

There is no understanding (such as was conceded apparently in 
the case of Tunis) that the amounts specified shall not be increased 
by a second decree in the course of a single year. A decree of Oc- 
tober 10, 1911, increased the amount of coffee admitted at the special 
rate for the year July 1, 1910, to June 30, 1911 — that is, a year which 
had already expired three months before — on the ground that the 
500,000 kilograms fixed by the decree of August 10, 1910, had been 
exceeded. 

Bibliography, 

GENEEAL "WORKS, 

Arnaune, Aug. Le Ccmmerce exterieur et ies Tarifs de Douane. Paris, 1911. 
A general work with only 35 pages on the colonies, but condensed and con- 
taining all the points of any importance. 

Augier, Chas., and Marvaud, Angel. La Politique douaniere de la France dans ses 
rapports avec celle des autres etats. Paris, 1911. A general work with only a 
dozen pages on the colonies, omitting the exceptions. 

Dislere, P. Traite de Legislation Coloniale. 3 vols. 3ded. Paris, 1906-07. Sup- 
plements, 1-4, 1906-1910. An exhaustive accumulation, but not well digested. 

Ermels, Robt. Frankreichs Pvoloniale Handelspolitik. Geschichte, Wirkung, und 
Kritik derselben. Berlin, 1910. A small work of 166 pages, but good up to 
the time when it w^as written. 

Girault, Arthur. The Colonial Tariff Policy of France. Clarendon Press, 1916. 
(Carnegie Endowment, edited by Chas. Gide.) This really comes down no 
later than the end of 1912. For instance, the decree of December 28, 1912, 
in regard to the New Hebrides, is not given. This is the only English work 
precisely on the subject, but contains a number of serious errors. 

La Quinzaine Coloniale. Paris, from 1897. A colonial fortnightly, edited by A, 
Challamel and others. 

60 Coffee, minimum duty less 78 francs, or 58 francs; cocoa and vanilla, one-half the duty, or 52 and 208 
francs, respectively. 

61 A decree of Dec.. 13, 1919, fixed the quantities to be admitted free in the year ending June 30, 1920, as 
follows: Into France and New Caledonia, coffee, 429,000 kilos; cocoa, 800,000 kilos. Into New Caledonia, 
maize, 1,283,000 kilos. Into other French colonies, coffee, 50,000 kilos; cocoa, 5,000 kilos. 



224 COLONIAL TARIFF POLICIES. 

L'Afrique Frangaise, and supplement entitled Renseignements Coloniaux et Docu- 
ments. Paris, monthly since 1890. The monthly bulletin of the Committee 
of French Africa and of the Committee of Morocco. Up to date and reliable. 

Lerov-Beaulieu, Paul. De la Colonisation chez les Peuples modernes. 2 vols. 
5th ed. Paris, 1902. 

Ma, Pierre. Les Droits de Douane et d'Octroi de Mer dans les Colonies Fran^aises 
de 1904 a 1906. Questions Diplomatiques et Coloniales, vol. 21, pp. 607- 
615, 796-806. 

Moye, Marcel, and Nogaro, Bertrand. Les Regimes Douaniers. Paris, 1910. Deals 
chiefly with the customs administration and has only half a dozen pages on 
the colonies. 

Pallain, G. Les Douanes Fran raises. 4 a^oIs. 2d ed. Paris, 1913. Largest and 
most authoritative work. Volume lY contains texts of laws and decrees referred 
to in other three volumes. 

Trescher, E. Vorzugszolle, Ihre Geschichte und Wirkung im internationalen Waren- 
austausch. Berlin, 1908. A small work of 176 pages, without an index, 
giving 52 pages to the French colonies and only 8 to the Portuguese, Spanish, 
and Italian. 

AYoolf, Leonard. Empire and Commerce in Africa. New York, 1920. 

WORKS RELATING TO PARTICULAR COLONIES. 

Bernard, Augiistin. Le Maroc. 2d ed., reAised. Paris, 1913. 

Besnard, Rene, and Aymard, Camille. L'Oeuvre Francaise au Maroc. * Paiis, 1914, 

Dechaud, Ed. Le Commerce Algero-Marocain. Algiers, 1906. Prepared for the 

Government of Algeria for the Colonial Exposition at Marseilles in 1906. 
Deloncle, L. Statut Infemational de Maroc. 2d ed. Paris, 1912. 
Gouvernement Cherifien. Annuaire Economique et Financier. Casablanca, 1917. 
Harris and Cozens-Hardy. Modern Morocco. London. 1919. 
Holtz, Louis. Traite de Legislation Marocaine. Droit public et droit pri^-e du 

Protectorat. Paris, 1914. 
Leroy-Beaulieu, Paul. L'Algerie et la Tunisie. 2d ed. Paris, 1897. 
Wolfram, Gustavo. Le Maroc. Etude Commerciale et Agricole. Paris, 1893. 

Note. — For other works on Morocco, see the bibliography attached to the chapter 
on the Colonial Tariff Policy of Spain, p. 569. 

STATISTICAL AND OFFICIAL WORKS. 

Direction Generale des Douanes. Tarif des Douanes de la France. Observations 
Preliminaires. Paris, 1908. Not a text of the tariff, but an official commen- 
tarj' thereon. Preface signed by M. Delanney, Directeiu' General des Douanes. 

Direction Generale des Douanes. Lois et reglements des douanes. The title under 
which the circulaires of the French cus-toms administration are bound annually, 
with an index. They are not paged continuously and are cited by the numbers 
of the individual circulaires, or the dates of the decrees contained in them. 
During 1918 and 1919 there was a "special series," as well as a "general 
series," the former containing decrees, etc., of less general interest. 

Direction Generale des Douanes, Tableau General du Commerce et de la Naviga- 
tion. 2 vols. Paris, annually. 

Direction Generale des Finances. Direction des Douanes. Documents statistiques 
sur le Commerce de la Tunisie, 1912. Tunis, 1913. 

Ministere des Colonies. Statistiques du Commerce des Colonies Fran^aises. Paris, 
annually. 2 vols. Beginning with 1905. (Cited by the outside title of the 
earlier volumes. Statistiques Coloniales.) 

Ministere des Colonies. Statistiques des Finances des Colonies Frang-aises pour leg 
annees 1902-1911. Melun, 1912. 

Ministere des Colonies. Regime commercial des colonies et Possessions Franfaises. 
Paris, 1906. Gives the octrois de mer as well as the import duties, but does 
not give the export duties. 

Board of Trade: Foreign Countries (Preferences to Colonies). "Showing the fiscal 
advantages at present given by France, Germany, Spain, the IN etherlands, 
and the LTnited States to goods imported fi*om their colonial possessions, and 
conversely by the said colonial possessions to goods fi'om the Mother Country-." 
London, Oct., 1909. Cd. 296, 17 pages. . . . 

Journal Officiel de la Republique Francaise, Paris, daily. Gives the text of all 
decrees, usually several days after the date of the decree. 



FRANCE. 225 

Ministere des Colonies. Statistiqiies de la population dans les colonies Fran^aises 

pour I'annee 1911. Paris, 1914. 
Ministere des Colonies. Documents Diplomatiques. Delimitation des Possessions 

Franc;aises a la Cote Occidentale d'Afrique, 1889-1895. Paris, 1895. 
Ministere des Colonies. Dpcuments Diplomatiques. Correspondance et Documents 

relatifs a la Convention Franco- Anglaise du 14 juin 1898. Paris, 1899. 
Ministere des Colonies. Documents Diplomatiques, 1906. Affaires du Maroc. 

Protocoles et Comptes Rendus de la Conference d'Algesiras. Paris, 1906. 
Chamber of Deputies, llth Legis., Session of 1914, No. 160. Rapport fait au nom de 

la commission des douanes sur le projet et la proposition de^loi relatifs au 

Regime Douanier des Produits Marocains importes en Algerie et aux vins 

recoltes dans la Regence de Tunis et i'Empire du Maroc, by Ed. Barthe. 

TEXTS OF TARIFFS. 

[See also p. 835.] 

Annuaire du Commerce, Didot-Bottin. Paris, annually. 1914 was the one-hundred 
and seventeenth year. Gives the schedules of the colonial tariffs. Better 
than Kelly, but not free from errors. 
France : 

Pierre, Eugene. Les Nouveaux Tarifs de Douanes. 3d ed. Paris, 1910. Gives 
the French tariff rates of 1892 and all changes up to and including those of 
the revision of 1910. 
U. S, Dept. of Commerce and Labor. Introduction by Frank R. Rutter. Cus- 
toms Tariff of France, Tariff Series No. 25, revised to August, 1910, Sup- 
plement, 1912. Govt. Printing Office, 1910. Contains statement' of the 
regime applied to colonial imports into France as well as the text of the 
French tariff. 
Indo- China : 

Gigaux de Grandpre, Pierre, Controleur des Douanes. Almanach Vade Mecum 
des Douanes et Regies en Indo-Chine. Haiphong-Hanoi, 1913. 8 parts 
paged separately. 
Gouvernement General de T Indo-Chine, Direction des Douanes et Regies. 
Tarif des Douanes. Hanoi-Haiphong, 1912. 
Morocco : 

Comite des Douanes. Tarif des Douanes Cherifiennes. Tangier, 1913. 
Oceania : 

Etablishments Frangais de I'Oceanie. Republique Fran^aise. Tarifs des 
Droits d'Octroide mer etde Douane. Papeete, Imprimerie du Gouverne- 
ment, 1909. 
Somaliland: - 

Chambre de Commere de Djibouti. Annauire, 1914. Dire-Daoua, 1914. 
Tunis: 

Regence de Tunis, Direction Generale des Finances. Tarif des Droits de Douane 
et des droits interieurs et autres exigibles en Tunisie a 1' importation et a 
I'exportation. Tunis, 1914, 
West Africa: 

Gouvernement General (sic) de FAfrique occidentale Frangaise. Inspection des 
Douanes. Tarif des droits d' entree et de sortie. Goree, January, 1917. 

TEXTS OF TREATIES, 

See the list given on page 834. 



Chapter IV. 
COLONIAL TARIFF POLICY OF GERMANY. 



CONTENTS. 



I. Introduction: -. Page. 

The German colonies- 
Circumstances of acquisition 227 

Location, area, population 229 

Table 1.— Area and population.. 230 
Commercial importance of the colonies. . . 230 
Value of imports and exports — 

Table 2.— Trade of the German 

colonies, 1907-1913 231 

Trade between Germany and the col- 
onies 231 

. Table 3.— Trade with Germany. . 232 
Table 4. — Principal commodities 
imported into Germany, 1913; 
total and share from German 
colonies 232 

II. Government of the German colonies: 
Ordinance powers of the Kaiser and the 

imperial chancellor 233 

Organization of the central administra- 
tion of the colonies 234 

The local authorities 234 

Steps toward colonial self-government - . . 235 
Financial policy and administration- 
General policy 235 

' Progress toward financial indepen- 
dence 23G 

Table 5.— Expenditures of the col- 
onies, 1909-1914 236 

Financial condition of the colonies 

before the war 236 

Effect of self-suiReing policy on tariffs. 237 
Tabular statement: Colonial rev- 
enues; 1904-1914 237 

Analysis of colonial revenues 237 

Table 6.— Sources of revenues 238 

III. Colonial tarilS policy and system: 

Treaties 239 

Tariff system- 
Legislation 242 

Character and principle of schedules. 242 

Rates 243 

Table 7. — Customs receipts, 

1913 ■- 243 

Treatment of alcoholic liquors 

and firearms 244 

Conservation of natural resources. 244 

No evidence of tariff preferences 244 

Conclusions as to preferences 248 

226 



IV. Tariffs of individual colonies: Page. 
German Southwest Africa- 
Situation and commerce 249 

Table 8.— Trade of Southwest 

Africa, 1913 249 

The customs tariff- 
Import duties 250 

Export duties 251 

German East Africa- 
Situation and commerce 251 

Table 9.— Trade of East Africa, 

1913 252 

The customs tariff 252 

Import duties 253 

Export duties 254 

Kamerun— 

Situation and commerce 254 

Table 10.— Trade of Kamerun, 

1913 255 

The customs tariff- 
Import duties 255 

Export duties 256 

Prohibitions 256 

Separate tariff for a part of the colony. 256 
a?Ogo— 

Situation and commerce 257 

Table 11.— Trade of Togo, 1913 ... 257 
The customs tariff- 
Import duties , 257 

Export duties 258 

German New Guinea- 
Situation and commerce 258 

Table 12.— Trade of New Guinea, 

1912.... 259 

The customs tariff— 

Import duties 259 

Export duties 260 

Samoan Islands- 
Situation and commerce 260 

Table 13.— Trade of Samoa, 1913 . . 260 

The customs tariff 261 

Kiaochow— 

Situation and commerce 261 

Table 14.— Trade of Kiaochow, 

1912-13; chief commodities 261 

Table 15.— Trade of Kiaochow 

with Germany, 1910-1913 262 

The customs tariff 262 

Bibhography 2G3 



GEEMANY. 227 

I. Introduction. 

THE GERMAN COLONIES. 

Circumstances of acquisition, — The colonial empire of Germany, 
unlike the empires of Great Britain and France, was of late and com- 
paratively sudden acquisition. Germany first assumed the authority 
and responsibility of a colony-holding power on April 24, 1884; on 
that day Bismarck announced officially that a section of the southwest 
coast of Africa was under German protection. Within less than two 
years thereafter the German flag was flying in East Africa, Kamerun, 
and Togo, and in New Guinea and adjacent islands. The territories 
thus suddenly acquired, when they had been explored and their 
inland boundaries had been fixed — a process far along by 1900 — ■ 
were found to have a total area of a million square miles. The subse- 
quent acquisitions were relatively small in area, and, except for the 
strategic position of Kiaochow in the commerce of China, unimportant. 
The Caroline Islands were purchased from Spain in 1899, and German 
Samoa was obtained in 1900 by a division of the Samoan Islands 
among the interested powers. ^ In 1911-12, Germany forced France 
to cede 100,000 square miles of French Equatorial Africa, which 
increased the area of Kamerun by that amount. 

For some decades before Germany's entry into the colonial field 

Geographers and explorers had been taking increasing interest in the 
)ark Continent. The British had been spasmodically and reluc- 
tantly advancing inland from some of their old establishments on the 
coast and the French had been leisurely enlarging their sphere of 
control in West Africa. Interest in Africa increased more rapidly 
after Henry M. Stanley revealed the course and extent of the Congo 
Eiver i^ 1877. In the early eighties there was competition between 
France and the International African Association^ for the control 
of the western outlets of the Congo Basin. In 1881 France had 
assumed a protectorate over Tunis, and in the following year the 
British entered Egypt. But the French refused to participate in the 
intervention in Egypt and the British intended only a short stay. 
The anti-colonialism of the middle of the nineteenth century died but 
slowly. 

In Germany there had long been an academic interest in colonies. 
The subject had been discussed in the Congress of Frankfurt in 1848. 
Germany furnished at least her fair share of the explorers and sci- 
entists who were making Africa known. But it was not until 1879, 
when Frederick Fabri published his book "Does Germany Need 
Colonies?'' ^ that public opinion began to develop rapidly in favor 
of German colonies. In December of 1882 the German Colonial 
Association [Deutsches Kolonialverein] was founded, and from that 
time a colonial party may be said to have existed. Several currents 
of opinion united to give force to the colonial movement in Germany. 
The two most important of these flowed from a consideration of the 
state of the population. In the 50 years preceding 1880 some 
4,000,000 emigrants had left Germany, and in the years 1880-1885 
the number was 880,000. Many publicists lamented this loss to the 

1 Germany, Great Britain, and the United States. 

2 King Leopold's organization wliich developed into the Congo Free State. 

3 Bedarf Deutschland der Kolonien? 



228 COLOls^IAI. TARIFF POLICIES. 

nation, a loss which directly strengthened commercial rivals and 
possible enemies. They desired colonies to which this stream of 
emigration could be directed so that it would remain under the Ger- 
man flag. Other publicists fixed their attention on the Germans 
who stayed at home. They found that the population of Germany 
was increasing by upward of half a million annuallj^ in spite of the 
emagration. Their estimates were that Germany's population in 
1900 would be from 65 to 80 millions and they believed that this 
meant general pauperism. 

Among the means which they suggested to enable Germany to 
support so vast a population, the acquisition of colonies was given 
a prominent place. Colonies were to furnish raw materials and pro- 
vide outlets for manufactured goods. Merchants complained that 
because of the growing protectionism of foreign countries their 
markets v/ere decreased from day to day. Other factors aided the 
colonial movement. The supporters of a policy of naval develop- 
ment pointed out the need of distant ports as bases and coaling 
stations. The glamor of empire appealed to same, and certain 
chauvinists regretted that Cochin China had not been taken from 
France in 1871. German commercial interests in various south 
Pacific Islands were comparatively large, in some cases predominant. 
These interests had had difhculties with Great Britain in regard to 
property titles after the establishment of British authority in Fiji 
in 1874. They advocated German annexation of the territories in 
which they v/ere interested. On the whole, however, the colonial 
movement in Germany was ' ' an evolution of feeling, a mania rather 
than a reasoned national policy." * In this discussion of colonial 
enterprise the subject of colonial tariffs as distinct from national 
systems of protection received little attention. The greatest colonial 
power, Great Britain, was unshaken in its adherence to free trade, 
Holland had recently removed the discriminatory features of her 
colonial tariffs, and only very minor discriminations had as yet been 
introduced in the French colonial tariffs. Both in Tunis and in 
Eg;\-pt treaties guaranteed the continuance of equality of treatment. 

Bismarck was, by his own afhrmation, ''no colony man." He 
agreed w^ith the admission of Fabri that coloDies were, politically, a 
weakness rather than a strength. He wished France to involve 
herself in such undertakings, but not Germ.any. He believed that 
the industrialization of Germany would enable her to sustain a 
population relatively as dense as that of England [say 90 millions] 
and he refused to aid emigration. At length, however, he yielded to 
public opinion in the matter of colonial policy and the sudden acqui- 
sition of large areas was the result. Bismarck's idea was that the 
colonies should be commercial and exploiting centers, directed 
by private initiative, and protected but not controlled by Ger- 
many. In June, 1884, he told the Reichstag that he contemplated 
only a single representative of imperial authority in each colony and 
no garrison.^ Bismarck's view of colonies as suppliers of raw ma- 

4 Dawson, William H.: The Evolution of Modern Gennany, New York and London, 1908. p. 361. 

' Giordani, Paolo: The German Colonial Empire, Its Beginning and Ending, translated by Mrs. Gustavos 
Hamilton, London, 1918, p. 19; Patzig. C. A.: Deutsche Kolonial-Unternehmungen und Postdampfer- 
Subventionen, Hanover, 1884, p. 18. For the general subject see ^^'estphal, Alexandre: Les Origines de la 
Colonisation Allemande, Montpelier, 1887; Demay, Charles: Histoire de la Colonisation Allemande, 
Paris, 1889; and Dawson, op. cit., Chapter on Colonies. 



GEEMAKY. 229 

terials rather than as markets for German goods and his desire to 
avoid colonial complications either in domestic or in foreign politics 
made the policy of the open door a natural one for him to follow. 
The draft of the Anglo-Portuguese treaty of February, 1884, by 
which Great Britain would have recognized Portuguese sovereignty 
over the mouth of the Congo, would have imposed the open-door 
policy in this territory % and Leopold was promising free trade in the 
whole basin of the Congo as an inducement for the recognition of his 
claims there. At the conference of Berlin, November, 1884-Feb- 
ruary, 1885,^ free trade was adopted as the rule for central Africa. 
The circumstances of the time thus explain not only the sudden entry 
of Germany into the list of colonial powers but also the earl}^ adoption 
of the open-door policy. 

The colonies have not always been popular in Germany, With 
changing circum.stances, e. g., the virtual disappearance of German 
emigration, the defenders of the colonies later supported their cause^ 
with new arguments. More stress was put upon the investment of 
national capital in railway, m.ining, and other concessions, the occu- 
pation of strategic com.merciai points, and the use of colonial markets 
either as national reserves or as m.eans of obtaining concessions from 
other countries. As Herr Dernburg expressed it — 

A country's own colonies become an instrument of commercial policy, since a nation 
secures rights and privileges in foreign colonies only when it can offer corresponding 
rights and privileges in its own colonies.^ 

Location, area, population, — According to geographical location, the 
German colonies were of three groups, as follows: 

(1) In Africa: Togo, Kamerun, German Southwest Africa, and 
German East Africa. 

(2) In the Pacific Ocean: German New Guinea (a general desig- 
nation for the northeastern part of the island of New Guinea called 
Kaiser Wilhelm's Land^ the Bismarck Archipelago, the Caroline, 
Pelew, Marianna, Solomon, and Marshall Islands) and a portion of 
the Samoan Islands, notably Savaii and Upolu. 

(3) In Asia: The German Leased Territory of Kiaochow, including 
the Bay of Kiaochow, on the coast of the Chinese Province of Shan- 
tung. 

With the exception of Kiaochow and the southern portion of 
Southwest Africa, all of these regions were located in the Tropics 
and were therefore not suitable for settlement by Europeans in large 
numbers, Kiaochow is a small area with considerable Chinese popu- 
lation, and much of Southwest Africa wag scarcely habitable.^ It was 
not reasonable, therefore, to expect a large diversion of German 
emigration to the German colonies. By 1913 the white population 
in all the German colonies had reached a total of only 28,846, i. e. 
one European to every 425 natives and to every 40 square miles. 

The area and population of the former German colonies is shown 
in Table 1. 

6 On the fate of this draft see p. 82. 

7 See pp. 82,84. 

8 Zielpunkre des Deutschen Kolonialwesens, 1907, p. 48. 

® Herr Dernburg, the colonial minister, writing in 1907, divided the German possessions into two classes— 
" settlement colonies ' ' and ' ' plantation colonies. ' ' He included in the settlement colonies Southv/est A f rica , 
the high regions of East Africa, and certain of the Pacific islands, somewhat optimistically placing in this 
group about one-half of the total area. The plantation colonies lie frankly admitted were not suitable for 
permanent settlement by Europeans. Zielpunkte des Deutschen Kolonialwesens, p. 33. 



230 COLONIAL TAKIFF POLICIES. 

Table 1. — Area and population of the German colonies, 1913} 





Area 
(square 
miles). 


Population. 


Colon j^ 


Total. 


Per 

square 
mile. 


Native. 


White.2 


' Other. 


Per cent 
white. 


East Africa 


384, 000 

298, 000 

34,000 

322, 000 

95,000 

1,000 

6 193 


7,666,336 

2, 652, 871 

1,032,368 

98,830 

603, 427 

38, 544 

194, 470 


20 

9 

30 

.3 
6 
38 
1,000 


7,646,000 

2,649,000 

1,032,000 

81.000 

600; 000 

35,000 

187,000 


5,336 

1,871 

368 

14,830 

1,427 

'544 

4,470 


3 15,000 
2,000 

3,000 
2,000 
3,000 
3,000 


07 


Kamerun . 


07 


Togo 


.04 


Southwest Africa 

New Guinea ° 


15.01 
.2^ 


Samoa 


1.41 


Kiaochow 


2 13 






Total 


1,134,193 


12,286,846 


10.83 


12,230,000 


28,846 


28,000 


234 







1 Based on figures in Statistisches Jahrbuch fiir das Deutsche Reich, 1915, p- 457. and Statesman's Year- 
Book, 1914. For somewhat different figures and more details, see the Peace Handbooks of the British 
Foreign OflBce, Nos. 110-113, and 146. 

s Some of the^e figures include the German garrisons. 

3 Chiefly Ea<t Indians, who controlled the retail trade. 

* Not determined. 

6 The smaller islands have only about 1 per cent of the area of Kaiser Wilhelm's Land and the Bismarck 
Archipelago. Their white population, however, was nearly half as great. 

6 Exclusive of the bay. 

The figures for the white population, it should be noted, include 
German military forces as well as the civil administrative officials, 
also engineers and others whose local residence was temporary. 
Hence the number of actual settlers and business men of European 
origin was considerably less than 28,846. In Southwest Africa alone 
the white troops numbered 2,171 in 1912.^^ 

The native population in the African colonies was not large in 
proportion to the area inhabited, consequently serious difficulties 
were encountered in gathering a sufficient labor force for the exploita- 
tion of colonial resources. In some of the' African colonies, notably 
Southwest Africa, the number of natives diminished under German 
rule. In East Africa, on the other hand, the native population 
probably doubled in the 30 years preceding the World War.^^ 



COMMERCIAL IMPORTANCE OF THE COLONIES. 

The German colonies exported such tropical products as rubber, 
sisal hemp, palm and other vegetable oils and butters, coffee, cocoa, 
cotton, and ivory. Diamonds were the most important mineral 
export ;^^ there were also small amounts of copper, tin, and lead. 
The important imports were textiles, principally cottons, and various 
iron a.nd steel wares, such as agricultural tools and machinery and 
mining and railway equipment, for the use of white settlers; also 
considerable quantities of alcoholic liquors, tobacco, and firearms. 
Some of the colonies, notably Southwest Africa, depended to a large 
extent upon the import of foreign foodstufi's, mainly rice and other 
cereals, frozen meat, and dried fish. The total foreign trade was, in 
comparison with that of the colonies of some other countries, insig- 
nificant in volume, but it was increasing rapidly. 

10 Deutsches Kolonial-Handbuch, 13th ed., Berlin, 1913. 

" Johnston, Sir H. H.: The German Colonies, Edinburgh Review, 1914, vol. 220, p. 310. 

" The Life of the fields is said to be limited. 



GERMANY. 



231 



Value of imports and exports, 1907-1913. — The values of the imports 
and exports of the various colonies ^^ in the years 1907-1913 are 
shown in Table 2. 

Table 2. — Trade of the German colonies, 1907-1913. 

[In thousands of marks.] 

IMPORTS. 



Colony. 


1907 


1908 


1909 


1910 


1911 


1912 


1913 


East Africa. 


23, 806 

17,297 

6,700 

32,396 

80,199 


25, 787 

16,789 

8,509 

33,179 


33,942 
17,723 
11, 235 
34, 713 


38, 659 
25,580 
10,817 
44,344 


45, 892 

29,317 

9,620 

45,302 


50,309 
34,242 
11,428 
32,499 


53,358 
34,616 
10, 631 
43, 426 


Kamerun 


Togo 


Southwest Africa 






84,264 


97, 613 


119,400 


130, 131 


128, 478 


142,031 




New Guinea 

Samoa 


5,720 
2,826 


5,090 
2,503 


6,461 
3,338 


5,979 
3,462 


8,015 
4,066 


9,207 
4,994 


19,207 
5,676 


Pacific Island colonies 

Kiaochow 


8,546 
70, 097 


7,593 
54,954 


9,799 
67,868 


9,441 
73,358 


12,081 
74,159 


14,201 

97, 752 


14,883 
107,050 


All colonies. . 


158,842 


146,811 


175,280 


202,199 


216, 371 


240, 431 


1203,964 





EXPORTS. 



East Africa 


12, 500 

15, 891 

5,916 

1,816 


10, 874 

12,164 

6,893 

7,795 


13, 120 

15,448 

7,372 

22, 071 


20, 805 

19,924 

7,222 

34, 692 


22,438 

21,251 

9,317 

28,573 


31,418 

23,336 

9,959 

39,035 


35, 550 


Kamerun. . . 


29,151 


Togo 


9,138 


Southwest Africa 


70, 302 






African colonies. . . 


35,923 


37, 726 


58,011 


82, 643 


81,579 


103, 748 


144,141 






New Guinea. 


3,470 
1,770 


6,053 
2,671 


8,328 
3,021 


14, 665 
3,534 


12, 026 
4,390 


12, 087 
5,045 


2 12,087 




5,339 






Pacific Island colonies 


5,240 
28,233 


8,724 
32, 971 


11,349 
39,199 


18,199 
47,393 


16,416 
54, 598 


17,132 

77, 998 


15,544 
79, 133 








69, 396 


79, 421 


108, 559 


148, 235 


152, 593 


198,. 878 


3 238, 818 






Total trade 


228, 238 


226, 232 


283,839 


350, 434 


368, 964 


439,309 


4 502,782 







1 Increase in imports, 1907-1913. 80.4 per cent. 

2 The statistics for New Guinea for 1913 not being available, the 1912 figures for that colony have been 
repeated. Imports were divided as follows: Kaiser Willielm's Land, 5,872; East Carohne and Marshall 
Islands, 1963; West Caroline, Pelew, and Marianna Islands, 1,372; Exports were 5,041, 5,164, and 1,882, 
respectively. 

3 Increase in exports, 1907-1913, 223.8 per cent. 

'- Increase in total trade, 1907-1913, 128.9 per cent. 

Trade hetween Gerinamj and the colonies. — The trade of the colonies 
was largely with the mother country. In every case' at least one-half 
of their exports went to Germany, and in the more important colonies 
at least one-haK of the imports came from Germany. In Kamerun 
and Southwest Africa the trade with Germany amounted to fully 80 
per cent of the total. 

Table 3 shows in detail the value of the trade of each colony with 
Germany in the year 1912 and the proportionate importance of this 
trade. • 



Figures from Statistisches Jahrbuch, 1915, and the Chinese Maritime Customs Report, 1913. 



32 



COLONIAL TARIFF POLICIES. 



Table 3. — Trade of the colonies icith Germany, 1912} 
[In thousands of marks.] 





Imports. 


Exports. 


Colony. 


Total. 


From 

Germany. 


Per cent 
from Ger- 
many. 


rrn Per cent 


East Africa 


50,309 
34,242 
32,499 
11, 428 


25,819 

27,216 

26,442 

4,&20 


51.32 
79.48 
81.36 
42. 18 


31,418 : 17,827 56.74 




23,336 1 19,841 

39,035 1 32,454 

9,959 : 5,808 


85.0'? 


Southwest Africa 


83.14 


Togo 


58.32 








128,478 


84, 297 


65.61 103,748 : 75,930 ; 73.18 






97, 752 
9,207 
4,994 


8,870 

3,177 

986 


9 07 77 QQS ! ?. 8fift ; r V) 




34.60 
19. 74 


12' 087 
5,045 


6;480 
2,536 


53.55 


Samoa 


50 27 






Pacific colonies 


111,953 


13,033 


11.64 


95, 140 


14 882 i 15 64 






All colonies . 


240, 431 


97,330 




439 309 Pn 812 















1 Berlin figures, except for Kiaochow, for which the colonial statistics had to be used. 
to Table 4, at the bottom of this page. 



See the footoote 



In the sum total of Germany's imports and exports the trade with 
the colonies was of small importance, either in its aggregate value 
or in the significance of individual items. In 1913 the total foreign 
trade of the German Empire (including the trade with its colonies) 
was valued at 22,547,000,000 marks; of this the trade v/ith its 
colonies was 115,400,000 marks, ^^ one-half of 1 per cent of the total. 
The following table shows the principal raw materials which Germany 
received from her colonies ^^ in 1913 and the relative importance of 
the colonies as compared with other sources of supply. 

Table 4. — Principal commodities imported into Germany, 1913; total and share from 

German colonies} 

[In thousands of marks.] 



Commoditv. 


Total 
imports. 


Imports 

from 
colonies. 


Per cent 
imported 

from 
colonies. 


Sisal hemiD 


2,346 

125, 939 

103,996 

9,877 

8,932 

4,480 

121,929 

67, 102 

28, 162 

607, 124 

139, 922 

181, 777 

212.445 

219,575 

58, 150 


1,893 

8,043 

7,726 

888 

790 

343 

4,673 

1,964 

1,143 

2,368 

625 

30 

170 

639 

21 


80.69 


Rubber . ... 


8.0-t 




7.43 


Palm oil 


8.99 
8.85 


Copper ore 


7.66 


Copra 


3.83 




2.93 


Groundnuts . . 


4.01 




0.39 


Cattle hides, dried f 

Cattle hides green 


0.45 
0.00 




0.08 


Coffee .... 


0.29 


Tin 


03 






Total . 


1,981,756 


31,316 


1.655 







!■> Except German Samoa, for which returns are not available. This eomparisofl vnth the total German 
trade is based on the Berlin statistics; for the discrepancies between these and the colonial figures relating 
to the same trade, see the next footnote. 

1 Statistik des Deutschen Reichs, 1914, Auswartiger Handel, der Verkehr mit den einzelnen Liindern. 
These figures, collected by the customs houses of Germany, are necessarily used in the absence of colonial 
figures showing exports bj^ articles and countries. Their totals do not agree, hoAvever, with the totals 
published by the colonial authorities, A close comparison, e. g., of the quantities and values of the articles 



GERMANY. 233 

II. Government of the German Colonies. 

ORDINANCE POWERS OF THE KAISER AND THE IMPERIAL CHANCELLOR. 

In considering the government of the German colonies it is import- 
ant to recognize in the first place that the colonies were not regarded 
as constituent parts (Bestandteile) of the Empire; they were ex- 
ternal territory held under the sovereignty of the Confederated States. 
The government of this external territory (Ausland) was given over 
to the Kaiser by the law of April 16, 1886, the Bundesrat and Reichs- 
tag surrendering in regard to it many of the powers which they 
exercised in the government of the home country {Inlomd).^^ The 
Kaiser's legislative powers in the colonies were exercised by means of 
imperial ordinances. The ordinance-making pov/er was limited to 
those matters for which statutory regulations had not already been 
made by the Imperial Legislature. However, in the domain of public 
law it was thought best to leave the Kaiser practically free from 
statutory interference, and consequently the framework of the colo- 
nial governmental and administrative systems was devised by him and 
his advisers and was altered from time to time without the cooperation 
of the legislature. The Reichstag took part in the framing of sta- 
tutes which provided for the individual rights of the colonists, the 
protection of life, of liberty, and of property. Statutory regula- 
tions and not ordinances furnished the foundation for private rights, 
the penal code, and the system of judicial procedure in the colonies. 

The ordinance-making power of the Kaiser was further limited by 
constitutional and statutory provisions which required the approval 
of imperial legislation for certain changes involving the expenditure 
of public funds. In the law of March 30, 1892, certain rules were 
laid down to govern the preparation of the annual budget for the 
colonies; it was provided that all proposals for exipenditure and for 
taxation must be prepared in advance and be approved by both 
Reichstag and Bundesrat. Inasmuch as important changes in the 
administration of the colonies usually involved additional expense, 
the plans of the Government were dependent on the cooperation 
of the Imperial Legislature. 

imported from each colony as shown in the German (Berlin) import figures with the total quantities and 
values of products exported from the colonies to all destinations as shown in the colonial figures, shows 
either that the colonial figures assign too much of their trade to Germany or the German (Berlin) figures 
attribute too little to the colonies, or that the colonial trade is divided between Germany and foreign 
countries according.to the prices of goods sold and the grades of products purchased, in a most remarkable 
and improbable manner. The figures of Southwest Africa can not be reconciled in any manner. The 
Berlin figures show imports of diamonds from Southwest Africa in 1912 as 4,326,000 marks. The colonial 
figures show that diamonds constituted 30,414,000 marks out of the total exports of 39.0.35,000, and then 
indicate that of this total 32,454.000 represented exports to Germany. If these figures are correct at least 
23,833,000 marks' worth of diamonds must have been included in the exports to Germany. According 
to the reports of the Diamanten- Regie 97 per cent of the diamonds were sold in Amsterdam. 

The total value of the imports into Germany from the colonies in 1912, according to the German figures, 
was 104,273,000 marks (including gold and silver); according to the colonial figures it was 173,400,000. The 
valuations assigned in Germany should be higher by the amount of the freight, insurance, etc., but e^'en 
so the maximum error of the Berlin figures does not exceed about 100 per cent— i. e., the total importation 
of the raw materials included in the table may have been 3.31 per cent instead of 1.655 per cent. 

The Berlin figures give the details only for the special trade. The general trade is given by groups of 
articles and these figures show that the error of using the figures of special trade is very small. The larger 
Items may also be found in the tables which give the trade by articles as they also give the more important 
countries of origin and destination. In these tables Southwest Africa was credited with the same amount 
and value of diamonds in 1912 under the head of general trade as under the head of special trade. 

15 Par. 1 of the law of 1886 reads: "The Kaiser exercises the powers of government (Schutzgewalt) in the 
protectorates in the name of the Empire." Quoted by Kobner, Otto: Einfiihrung in die Kolonial- 
politik, Jena, 1908, p, 119. 



234 ' COLOXIAL TARIFF POLICIES. 

ORGAXIZATIOX OF THE CEXTRAL ADMIXISTRATIOX OF THE COLONIES J, 

The highest official in the colonial administration was the imperial 
chancellor. The ordinance-making power was in part delegated to] 
the chancellor by the Kaiser and in part assigned to him by the colo- 
nial law (Schutzgebietgesetz) of 1886, which provided*^ that the 
chancellor should make the necessary regulations for the execution : 
of the imperial statutes concerning the colonies. In addition the 
chancellor was authorized to issue various sorts of regulations, such 
as police ordinances, with limited penalties for their infringement. ] 
He made wide use of the powers thus intrusted to him, and as a re- • 
suit a large part of the administration of the colonies was founded upon 
his ordinances. | 

All of the colonies except Kiaochow were under the control of the 
imperial colonial office {Reicliskolonialamt) , created in 1907. The 
creation of this independent department in the Imperial Government 
was a part of the reforms in colonial policy brought about at the 
accession of Herr Dernburg as colonial minister. Previously the 
colonial bureau had been a subdivision of the office of foreign affairs. 
Kiaochow was governed, in view of its special character as a naval 
base, through the imperial ministry of marine. As an advisory 
body to assist the colonial office, there was provided a colonial coun- 
cil, the members of which were appointed by the chancellor. This 
council was abolished in 1908 and was replaced in 1910 by a ^^per- 
manent commission to aid the colonial administration in the consider- 
ation of economic questions." The new commission vras to be made 
up of representatives of, the chambers of commerce of^ the great 
manufacturing and commercial centers. The commission was 
summoned only once during the years 1910-1913; in the latter year 
its membership was increased from 11 to 25. '"® 

THE LOCAL AUTHORITIES. 

• 

In each colony there was a governor, appointed by and subject 
to the central authorities in the mother county. The governor was 
assisted by an advisory council, which, however, had no real legisla- 
tive powers. This council was composed partly of colonial officials 
and partly of representatives of the white inhabitants, selected by 
the governor. By the imperial chancellor's ordinance of July 24, 
1903, a uniform constitution was given to colonial councils in all 
of the colonies except Kiaochow.-' The administration was carried 
on largely through ordinances made by the governor, by virtue of 
the powers delegated to him by the imperial chancellor and by the 
Kaiser. The governor laid before the council the estimates for the 
annual budget and the proposed ordinances, but he was not bound 
to take the advice of his councillors. Important ordinances, such 
as those revising the tariffs of the colonies, required the assent of 
the home authorities. 

16 Zimmermann, Alfred: Geschichte der Deutschen Kolonialpolitik, Berlin, 1914, p. 306. 

1' In Kiaochow tlie civil population was allowed to have four representatives in the governor's council, 
a body composed of the heads of administrative departments; and in addition there was a committee of the 
Chinese population to cooperate with the German colonial officials in the government of the Chinese. 



GEEMA:f7Y. -235 

STEPS TOWARD COLONIAL SELF-GOVERNMENT. 

Attempts were made to introduce the representative principle mto 
local government. In East Africa local assemblies (Kommunale 
Verbande) were organized (1901), containing from 6 to 10 members; 
of these, all were appointed by the governor and one-half were officials. 
The native population was represented by at least one member in 
each assembly. All of the more important decisions made by these 
assemblies required the approval of the governor. 

Although tentative steps had been taken in the direction of giving 
the representatives of the people, particularly of the whites, a voice 
in governmental affairs, it can be seen that self-government was in no 
sense existent. The paucity of the white population and the low 
level of intelligence of the natives precluded much progress in this 
direction. However, the colonists were asking for a greater share in 
their public affairs, and the organization of a suitable system of par- 
ticipation for them was recognized as one of the future problems of 
German colonial policy. ^^ 

FINANCIAL POLICY AND ADMINISTRATION. 

General 'policy. — It may be said to have been a guiding principle of 
German colonial financial policy to make the colonies self-supporting. 
But the Government did not, as a means toward this end, adopt a 
cheeseparing policy. The plan followed was not so much to keep 
expenditures low as to make the revenues large. ^^ Consequently, 
they did not hesitate to appropriate large sums for public buildings, 
such as schools and government offices, and for railways, highways, 
harbor improvements, and other public works. Such expenditures, 
particularly those necessary to facilitate transportation and commu- 
nication, they regarded in the same light as the investment of capi- 
tal by a business firm in a new undertaking. Initial expenditure 
must be large in order to insure eventual productivity. In the 
meantime they endeavored to make the colonial revenues as produc- 
tive as possible. But the raising of taxes in ail new countries is diffi- 
cult; the natives generally have no great taxpaying ability, and the 
expense of collecting taxes from them is likely to be large in propor- 
tion to the amounts collected; the white settlers must not be discour- 
aged by heavy tax burdens ; the productivity of colonial enterprises 
is at first small and uncertain. The inevitable result, therefore, of a 
policy such as that adopted by the Germans must be an excess of 
expenditure over income and, consequently, a series of deficits in the 
annual budgets of the colonies, deficits which must be met by sub- 
sidies from the treasury of the mother country. 

The subsidies for the colonies cost the German Imperial Govern- 
ment, from 1884 up to and including the appropriations for 1914, 
867,441,118 marks, about $206,451,000. During the years 1910-1914 
the cost averaged about 30,000,000 marks ($7,500,000) per year.^o 

18 The statements of fact in the description of the administration of the German colonies are taken largely 
from Kobner, pp. 119-124, 144-147; also from Zoepfi, G.: Kolonien und KoIoniaIpolitik,in Konrad'sHand* 
worterbuch der Staatswissenschaften, 3d ed., 1910, vol. 5, pp. 921-1038. 

19 This feature of German financial policy was commented on by English writers in The United Empire, 
new series, Vol. VI, pp. 209-213, and Vol. IX, p. 283. See Kobner, op. cit., p. 157. 

20 The figures for 1884-1912 are given by Kuhn, Hellmuth, in Die Deutschen Schutzgebiete, Berlin, 1913, 
pp. 206-209. To these have been added the estimates for 1913 and 1914 from the Haushaltsetat der Schutz- 
gebiete for 1914. 

185766°— 22 16 



236 



COLOXIAL TAEIFF POLICIES. 



Progress toioard financial independence. — Progress toward the goal 
of seK-sufficiency in the finances of the colonies was steady in the 
years immediately preceding the outbreak of the Em^opean war. 
As early as 1908 imperial subsidies had been found unnecessary in 
two of the smaller colonies, Togo ^^ and Samoa. For the remaining 
colonies the subsidies remained practical!}' constant in amount, but 
formed a decreasing proportion of the total ordinary expenditures, 
as is shown in Table 5.-- 

Table 5. — Expenditures of German colonws, 1909-1914. 



Year 


Total (ordi- 
nary; ex- 
penditures. 


Imperial 
subsidies. 


Per cent of 
expendi- 
tures 
met by 
subsidies. 


1909 


1,000 vmrks, 
68,110 
82. 450 
96, 690 
87, 630 


1,000 marks. 
32,386 
29,439 
25, 736 
29,296 
31,961 
30, 796 


47.5 


1910 ... 


35.7 


1911 


26.6 


1912 


33.4 


1913 


105, 810 
109,170 


30 2 


1914 


28.3 







Among the changes brought about upon the accession of Herr 
Dernburg to the post of colonial minister ^^ was the revision of ac- 
counting methods: the system previously followed had long rendered 
difficult a clear understanding of the financial situation in the colonies. 
After 1908 ''extraordinary'' expenditures (the cost of permanent 
improvements such as railways, harbor works, etc.) were defrayed 
b}' loans -'^ whereas formerly these matters had been handled in cur- 
rent expense accounts as charges against colonial revenues. 

An attempt was also made, in the years preceding the war, to 
segregate the expenses of the military establishments in the colonies 
from the costs of their civil administrations. Thus the German 
authorities implicitly recognized the principle already found in the 
colonial systems of Great Britain and France, that the expenses of 
defending the colonies against foreign aggression, as well as against 
native uprisings, should be borne by the mother country. The 
separation of expenses seems to have been effected thj-oughout 
except in the case of Kia^ochow, where the budget estimates for 1914 
show an item of joint expenditure for military and civil administra- 
tion. 

Financial condition of the colonies he/ore ilie Euro'pean war. — An 
official summary of the financial situation just before the outbreak 
of the war was given in the colonial budget report for 1914, wherein 
appears the follovring statement: 

With the exception of New Guinea, for whose development increased expenditures 
are necessary, the expenses of the ci^-il administration are covered without subsidies 

21 Of the tropical colonies, Togo v.-as in many respects the most successful. 

22 Statistisehes Jahrbuch, 1915: Kulm; Op.cit., and Haushaltsetat der Schutzgebiete, 1914. For 1913 
and 1914 there are available only estimates. The change in accounting methods introduced in 1908 
makes comparison of the later figures with those of previous years practicarty impossible. The large expense 
vrhich was incurred in putting down the insurrection in Southwest Africa in 1908 invalidates the use of the 
figures for that year for purposes of comparison. 

23 Febniarv, 1907. 

24 The African colonies issued their own loans, the Imperial Government guaranteeing both principal 
and interest. The total amount of such loans issued in the years 1908-1914 was 2S5, 127,000 marks. (Haus- 
haltsetat, 1914.) The imperial treasury issued loans direct for permanent improvements in New Guinea, 
in Samoa, and in Kiaoehow. 



GERMANY. 237 

from the imperial treasury. The expenditures for military protection in the colonies 
in which special troops are maintained were borne in the past exclusively by the 
Empire; in 1913 only Southwest Africa afforded a moderate contribution to "these ex- 
penses. The present financial condition of this colony permits an increase in the esti- 
mate for this contribution. East Africa also is in position to afford a contribution 
for military expenses. In those colonies in which military protection is afforded by 
the constabulary, the expenses are met by the colonies * * *. In the expenses 
of the civil government is not included the cost of maintaining the postal and tele- 
graphic service in the colonies. The subsidies necessary for these services in all 
colonies are furnished by the Empire. ^^ 

Effect of self-sufficing 'policy on tariffs. — The task of making the 
colonies pay their way, even when the costs of permanent works 
and of military protection are excluded, was full of difficulties; that 
it was accomplished within a single generation is remarkable. The 
increase in colonial revenues in the years 1904-1914^ shown in the 
following tabular statement, was made possible by the growth in the 
productivity of colonial industries and in the consummg power of 
the native and European population, a growth evidenced b}^ the 
increase of colonial foreign trade. 

Total German colonial revenues, 1904-19 14.'^^ 

1,000 marks. 

1904 13, 580 

1905 15, 300 

1906 18, 210 

1907 23, 580 

1908 24, 110 

1909 42, 530 

1910. 48,720 

1911 53, 180 

1912 64, 520 

1913 67, 930 

1914 66, 170 

Import and export duties were so assessed as to take maximum 
advantage of the increasing taxpaying ability of the population. 
Zoepfi remarks that financial independence of the colonies was at- 
tained only by putting a severe strain upon the productivity of 
colonial revenues,'^^ Customs duties and taxes of all kinds were 
considerably increased, and in addition the colonies were burdened 
with a heavy debt for extraordinary expenditures, the interest on 
which they were unable to pay. 

ANALYSIS OF COLONIAL REVENUES, 1910-1914. 

The following table ^^ shows the amount of revenue collected in 
the German colonies and the principal sources from v/hich it was 
derived, for the years 1910, 1912, and 1914. 

"25 The cost of the colonial telegraph and postal service, above receipts, was estimated at 1,475,105 marks 
for the year 1914. 
2s Statistisches Jahrbuch, 1915. The figures for 1913 and 1914 are estimates, 

27 Op. cit., p. 1021. 

28 Statistisches Jahrbuch, 1915, and Haushaltsetat, 1914. 



238 



COLONIAL TARIFF POLICIES. 



Table 6.— Sources of colonial revenue. 
[In thousands of marks.] 



Colony. 


Total 
revenue. 


Direct taxes on 
natives. 


Customs duties. 


Other revenues. 


Amount. 


Per cent 
oftotal. 


Amount. 


Per cent 
oftotal. 


Amount. 


Per cent 
oftotal. 


East Africa: 

1910 


13,170 
15, 580 
16, 510 

6,980 
10,330 
11, 310 

3,240 
3,510 
3,500 

18,090 
24, 180 
23,500 

1,560 
1,990 
2,100 

860 
1,180 
1,190 

43,900 
56, 770 
58,110 


3,709 

4,987 
5,130 

1,547 
2,363 
3,000 

650 

718 
680 


28.9 
32.0 
31.1 

22.1 
23.0 
26.5 

20.1 
20.5 
19.4 


4 058 


.^n s 


5,403 
5,443 
5,830 

1,428 
2,726 
2,429 

789 
929 


40 3 


1912 


5 150 i ^'^ 


35 


1914 

Kamerun: 

1910 


5,550 

4,005 
5,241 

5,881 

1,801 
1,863 

1,788 

7,334 
9, 932 
2,031 

849 

870 

1,150 

447 
572 
666 

18, 494 
23, 628 

17,066 


33.6 

57.4 
50.9 
52.0 

55. 6 
53.1 
51.1 

45.2 

41.0 

8.6 

54.4 
4.3.7 

54.8 

52.0 
48.5 
56.0 

42.1 
41.6 
29.4 


35.3 
20 5 


1912 


26.1 


1914 


21.5 


Togo: 

1910 


24.3 


1912 


26.4 


1914 


1 032 1 Sfl-.'i 


Southwest Africa: 

1910 


10, 756 

14,248 
21, 469 

698 

1,104 

934 

203 
398 
314 

19,277 
24,848 
32,008 


54.8 


1912 






59.0 


1914 






91.4 


New Guinea: 

1910 


13 
16 
16 

210 
210 
210 

6,129 

8,294 
9,036 


0.08 

0.8 

0.8 

24.4 
17.8 
17.6 

13.7 

14.6 
15.5 


44.8 


1912 


55.5 


1914 


44.4 


Samoa: 
1910 


23.4 


1912 


33.7 


1914 


26.4 


All colonies (excluding Kiao- 
chow): 
1910 


44.2 


1912.. . 


43.8 


1914 


55.1 







Customs duties were the most important single source of revenue; 
in 1914 it was estimated that they would produce about 30 per cent 
of the total colonial revenues. The sharp decrease in the total 
customs receipts after 1912 was the result of the repeal ^^ of the 33 J 
per cent export duty on diamonds from Southwest Africa. Customs 
duties produced more than one-half the revenues of Kamerun, Togo, 
New Guinea, and Sam_oa; in East Africa they produced only one- 
third of the total revenues, but vv^ere nevertheless more important 
than any other tax. The higher stage of economic development of 
Southwest Africa permitted the imposition of excise and income 
taxes.^^ In that colony the customs receipts derived in 1909-1913 
were principally from the export duty on diamonds. 

Next in importance to the customs as a source of colonial revenues 
were the various direct taxes imposed on the natives, such as the hut 
tax in East Africa and the head taxes in New Guinea and Samoa. 
Taxes on the natives were most productive, comparatively, in East 
Africa and Kamerun.^^ They were employed in all the colonies 
except Southwest Africa. In Samoa the head tax was 20 marks on 
adult males, native and European alike. ^^ 

29 Dec. 31, 1912. 

30 In Samoa graduated license taxes took the place of an income tax. 

31 The tax levied upon the natives in Kamerun was described in the Deutsche Kolouial Zeitung, Apr. 26, 
1913, p. 282. Every able-bodied adult male native was required to pay a yearly tax of 10 marks. Every 
native who had an income of over 400 marks per annum was required "to pay a supertax, which was levied 
in proportion to the number of wives he supported. The taxes were payable either in money or in labor. 
The native ciiiefs were employed to collect the taxes, receiving a 10 per cent commission on amounts 
collected for their services. 

32 See article by E. Langen, " Koloniale Zoll- und Steuerpolitik in Samoa," in Jahrbuch liber die 
Deutschen Kolonien, Vol. VII, pp. 184-196. 



GERMAIJTY. 239 

Among the miscellaneous sources of revenue were license fees of all 
kinds, liquor dealers' licenses, traders' and artisans' and itinerant 
peddlers' licenses, hunting licenses, etc. Heavy taxes were imposed 
on corporations organized to exploit natural resources. Kevenue 
was also derived from ro;^alties collected by the colonial governments 
on the diamond mines in Southwest Africa ^^ and the phosphate 
mines in the Pacific islands. 

III. Colonial Tariff Policy and System. 

TREATIES AND GERMAN COLONIAL TARIFF POLICY. 

Germany, Holland, and Great Britain have maintained the open 
door in their colonies, while other colonial powers have been steadily 
shutting the doors in the regions which they control. This requires 
some explanation. 

Of the three, the case of Germany ^* — a protectionist country with 
a bargaining tariff — most requires explanation. It is soon found that 
the problem is chiefly that of declaring the reasons for which Bis- 
marck adopted the policy and committed his country to its indefinite 
continuance by embodying it in conventions with no time limit. 
Germany's great colonial possessions were acquired in 1884 and 1885, 
and before the end of the following year the open door had been 
pledged for all this territory except Southwest Africa. Bismarck 
was then in full control of the foreign policy of his country and was 
therefore responsible not only for the adoption of the open-door 
principle, but also for committing the Empire to its indefinite con- 
tinuance. It is generally recognized that Bismarck was not interested 
in colonies and that he yielded to public opinion in the policy of 
annexing territory. He would have the State involve itself in no 
complications whatever by the possession of distant territories, and 
his Government put most of the territories which it acquired under 
the administration of chartered companies. This skepticism as to 
the value of colonies and this desire to escape disputes regarding 
them naturally increased his willingness to guarantee equal treat- 
ment to foreigners in the German colonies. Certain features of 
international politics at the time also made the adoption of this 
policy natural. 

The first formal obligation to maintain the open door in her colo» 
nies was undertaken by Germany in the signing and ratifying of the 
general act of the conference of Berlin in the spring of ISSS. The 
Berlin conference was convened to settle certain problems of West 
Central Africa which had grown out of the conflicting claims of Portu- 
gal, France, and the organization which developed into the Congo 
Free State. One of the more immediate causes lay in the signature 
of the Anglo-Portuguese treaty of 1884, whose ratification would 
have constituted an English recognition of Portuguese title to the left 
bank of the lower Congo River. This treaty-draft contained pledges 
by Portugal for the equal treatment of the commerce of all nations 
in the territory thus recognized as hers, but various provisions of 

33 In 1914 the yield of the tax on the diamond-mining industry in Southwest Africa, substituted for the 
export tax in 1913, was estimated at 13,790,000 marks. From Haushaltsetat, 1914. 
84 For the cases of Holland and Great Britaio see pp. 460-462 and p. 287. 



240 COLOI^IAL TARIFF POLICIES. 

it were not satisffictory either to British merchaiits or to the conti- 
nental powers. Free trade was also one of the inducements held 
out by Leopold to gain support for his undertaking in the Congo 
Basin. It is not surprising, therefore, that wlien the Franco-German 
invitations were issued for the conference of Berlin, they included as 
part of the proposed program the establishm.ent of a regime of equal 
opportunity in the territory in dispute. After the meeting of the 
conference, largely through the efforts of the American delegates, the 
*' Conventional basin of the Congo'' was defined to include not only 
the whole watershed of the Congo River but additional territory on 
both coasts of Africa. The provisions of the general act of the con- 
ference of BerliUj which are set forth in greater detail on page 85, not 
only guaranteed equal opportunity for the commerce of all nations 
but entirely forbade import or transit dues. This prohibition was 
modified m 1890 and later to permit import duties not exceeding 10 
per cent ad valorem, except that higher rates v.^ere permitted on 
alcoholic beverages and arms. The convention applied specifically 
to future acquisitions of territory, and in ratifying it Germany thereby 
accepted its obligations for the whole of German East Africa, then 
in process of formation, and for part of Kamemn, including the 
greater part of the 100^000 square miles ceded by France in 1912. 

The open door in the whole of Kamerun and in Togo was further 
pledged in an exchange of notes with Great Britain in May and June, 
1885, relating to the territories of the two countries situated on the 
Gulf of Guinea. ^^ In the note of May 16, 1885, Lord GranviUe stated 
that Her Majesty's Government was prepared to give every assurance 
that '^duties will be levied solely for the purpose of meeting the ex- 
penses necessary to enable them to carry out the obligations imposed 
upon them by the protectorates, and that they will be as moderate as 
possible"; Her Majesty's Government '^will be fully prepared to 
apply to the British protectorates the provisions of the second para- 
graph of the fifth article of the act of Berlin, which accords protec- 
tion to persons and property of foreigners, and to engage that there 
will be no differential treatment of foreigners as to settlement or 
access to markets, it being understood that the regulation of these 
questions must be subject to administrative dispositions in the inter- 
ests of commerce and of order"; Her Majesty's Government was 
*' prepared to give every assurance that there shall be no differential 
treatment of foreigners or foreign goods." Count Munster replied on 
June 2, giving like assurances on behalf of the German Government, 
except that instead of making the pledges for aU ^'foreigners" he 
used the term '^British." These notes contain no limitation as to 
time. In the settlement of the eastern boundary of Kamerun in 1894, 
Germany gave pledges to France that there would be no differential 
treatment of cormnerce in the eastern and northeastern part of 
Kamerun, on the routes of communication between Lake Chad, the 
upper Benn6 and the upper Sangha. The treaty established free- 
dom of navigation on the Benue, Chari, Logone, and other rivers. 

In April of 1886 Sir Edward Malet, the British ambassador in 
Berlin, and Count Herbert Bismarck signed declarations relating 

s5 Bernliardt: Handboolc of Commercial Treaties, p. 437. This is an official publication by the British 
foreign office of British treaties in force in 1912. Die Handelsvertriige des Deutsehen Reichs, 1906, p. 255. 
Tiiis is also an official publication, issued by the Reichsamt des lanern. This v/otk is cited hereafter as 
Handelsvertrage. •>•• 



GEEMANY. ' 241 

to the establishment of the open door in the islands of the Pacific 
between latitudes 15° north and 30° south and between longitudes 
130° east and 165° west of Greenwich, ^^ The two Governments '^hav- 
ing resolved to guarantee to each other, so soon as the British and 
German spheres of influence in the w^estern Pacific shall have been 
demarcated, reciprocal freedom of trade and commerce in their pos- 
sessions and protectorates within the limits specified in the present 
declaration/' agreed that "the ships of both States shall in all re- 
spects reciprocally enjoy equal treatment as well as most-favored- 
nation treatment, and merchandise of whatever origin imported by 
the subjects of either State, under whatever flag, shall not be liable 
to any other or higher duties than that imported by the subjects of 
other States or of any third power." The limits defined- include the 
whole of the western Pacific from but not including the Samoan 
Islands to the Dutch East Indies, but the British self-governing colo- 
nies were specifically excluded. It should be noted that the agree- 
ment was made to apply to future acquisitions;^'^ it therefore came 
later to apply to the Caroline and the Pelew Islands pmxhased from 
Spain in 1899; but the Marianna Islands lie mostly beyond 15° north 
and were thus in part technically outside its sphere of application. 

The spheres of Germany and Great Britain in the western Pacific 
had been tentatively assigned by declarations of April 6, 1886, but 
the Samoan, Savage, and Tonga Islands continued "to form neutral 
regions." This neutral status with an international control was 
found unsatisfactory, particularly in Samoa^ and by treaties of 1899 
the Savage and the Tonga Islands were assigned to Great Britain,^® 
and the Samoan Islands w^ere divided between Germany and the 
United States, ^^ with longitude 171° west as the boundary. By 
Article III of the treaty of December 2, 1899-February 16, 1900, 
"it is understood and agreed that each of the three signatory povf- 
ers *^ shall continue to enjoy in respect to their commerce and com- 
mercial vessels, in all the islands of the Samoan group, privileges and 
conditions equal to those enjoyed by the sovereign power in all 
ports which may be open to the commerce of either of them," 

While the German pledges in regard to the open door in Kamerun, 
Togo, and Samoa were made only to the British or to the British 
and Americans, they were in practice, through the operation of the 
most-iavored-nation clause, necessarily more or less general in their 
application. 

The situation of Kiaochow would naturally suggest that it be 
made a free port, or at least a j>ort where the duties were veiy low» 
In this respect its situation is similar to that of Hongkong, Macao, 
Djibuti, and the ports of French India. In addition, the tariff 
policy to be pursued there was restricted both by the terms of con- 
ventions and agreements which Germany made with China and by 
open-door pledges given in 18^9 in reply to proposals which emanated 
from the Government of the United States. 

3S Bernhardt: Op. cit., p. 441. Handelsvertrage, p. 259. Hertslet's Commercial Treaties, vol. 17, p. 443. 

37 As is also recognized in the declaration accompanying the treaty of Nov. 14, 1899, in regard to the 
Savage and Tonga Islands. 

38 Treaty, Germanv-Great Britain, of Nov. 14, 1899. 

39 Convention, Germanv-Great Britain-United States, Dec. 2, 1899; Malioy: Treaties, Conventions (etc.). 
Vol. II, p. 1595. Hertslet: Commercial Treaties, vol. 21, p. 1182. Handelsvertrage, p. 266. 

'*" United States, Great Britain, and Germany. 



242 COLONIAL TARIFF POLICIES. 

TARIFF SYSTEM. 

LEGISLATION. 

The inhabitants of the German colonies had no voice in the j 
determination of their customs tariffs. These tariffs were based upon * 
ordinances of the imjTerial chancellor and ordinances of the colonial 
governors, to whom had been given wide power of modifying the 
schedules, subject to approval of the imperial colonial office. The 
governors were, it should be remarked, appointed and not elected 
officers. Proposals for changes in the tariff were laid by the governors 
before their councils, but the decisions of the councils were not 
mandatory.. 

CHARACTER AND PRINCIPLE OF THE SCHEDULES. 

The tariffs of the colonies contained schedides of both import and 
export duties, except that in Togo and Samoa there were no export 
duties.^^ In Samoa the council voted in December, 1913, in favor 
of imposing export duties on copra and cocoa.*^ These duties had not 
been sanctioned when the war began, but they were put in force after 
the occupation by the New Zealand administration. 

A uniform feature of the tariffs was a general or ^^ blanket'^ duty 
of 10 per cent ad valorem on all imports. This was found in all 
colonies except Southwest Africa and Samoa. Samoa was an excep- 
tion only in that the rate was 12 J per cent. There was a schedule 
of specially enumerated articles, some of which were subjected to a 
specific duty and others to an ad valorem duty higher than 10 per 
cent. The ^'enumerated" articles included the chief revenue pro- 
ducers, such as alcoholic liquors, tobacco, salt, sugar, and occasionally 
other food products. 

Export duties were levied upon those products which were most 
valuable — that is, upon those branches of the export trade -deemed 
best able to stand taxation. Thus, in New Guinea, there were export 
duties upon tortoise shells and the skins of the bird of paradise; in 
East Africa, upon ivory and hides; and in Kamerun, upon rubber 
and kola nuts. 

It seems to have been intended that the burden of taxation should 
be borne as far as possible by the native population. It was certainly 
intended that settlement colonization should not be discouraged and 
that it should, on the contrary, be definitely encouraged. In the 
tariffs of Southwest Africa, Kamerun, Togo, and German East Africa 
there were long lists of commodities which were exempted from 
import duties when brought in for the use of settlers. The goods thus 
exempted included machines and implements of all sorts for use in 
the construction of railways and in the development of plantations, 
all kinds of carriages, wagons, and rolling stock, and such building 
materials as lime, cement, corrugated sheet iron, and steel construc- 
tion material. On special application prospective settlers could 
import free of duty articles for domestic use, such as furniture, house- 
hold effects, wearing apparel, etc. Other items which appeared in 
the free lists were domestic animals, seeds, and plants, fuel, oils, ice, 
mineral water, printed books, coffins, tombstones, and funeral orna- 
ments. These diverse commodities possess a common character- 

« Togo and Samoa were the only colonies which were able to pay their expenses out of their own revenues. 
« Langen, E.: Op. cit., p. 212. 



GERMANY. 



243 



istic — they would contribute to the success, comfort, and satisfac- 
tion of Europeans resident or traveling in the colonies. 

The results accomplished were described in the Koloniale Rund- 
schau as follows: 

The export taxes fall, since the products of the European plantations are freed 
from tax, almost exclusively upon the natives. Also in the case of imports the articles 
consumed by the colored people, principally the textiles, bear the greatest part of 
the taxes, while seeds, fertilizers, machines of all kinds, instruments, appliances to 
aid transportation, and barbed wdre are duty free.^^ 

Rates. — The general level of customs duties on an ad valorem basis 
is indicated in Table 7. 

Table 7. — Customs receipts, 1913. 

[In thousands of marks. 
IMPORTS. 



Colony 



Value. 



Revenue 
therefrom 



Average 
rate ad 
valorem. 



East Africa 

Kamerun 

Togo 

Southwest Africa 

New Guinea (1912) 

Samoa 

All colonies (except Kiaochov) 



53,358 
34,616 
10,631 
43,426 
9,207 
5,676 



156,914 



4,451 

4,190 

1,774 

2 2,070 

818 

570 



13,873 



18.34 
12.10 
16.69 
4.76 
8.88 
10.04 



8.84 



EXPORTS. 



East Africa 

Kamerun 

Togo 

Southwest Africa 

New Guinea (1912) 

Samoa 

All colonies (except Kiaochdw) 




1 Excluding the salt-consumption duty, the stamp tax on playing cards, shipping dues, the wood tax, 
and other receipts (Neheneiunahmen) of the customs houses. These came to 338,000 marks in the fiscal 
year ended Mar. 31 . 1913. The import duty on salt was Rs. 0.60 and the consumption duty Rs. 2.75 per 
100 Idles . The latter is levied on domestic production and thus deprives the total duty of much of its pro- 
tective influence. 

2 This is the figure for customs and related receipts (which are not reported separately) but does not 
include other collections by the customs — 768,000 marks for harbor dues and 104,000 marks for beer and 
brandy taxes. These are large items and their inclusion with the customs duties would bring the average 
rate on imports to 6.77 per cent, though evidently they should not be charged entirely against imports. 
The revenue figures in the table have been collected from monthly or quarterly figures in the Deutsches 
Kolonialblatt, 1913 and 1914, passim. For the other colonies the figures for import duties and export duties 
are given separately, but since the beginning of the fiscal j^ear 1911-12 those for Southwest Afiiea have 
given only the totals. The yield of the export duties of Southwest Africa in 1910-11, excluding the duty 
on diamonds, was only 1,286.80 marks. The export duty can not be calculated from the trade statistics- 
guano is not given separately, and male and female sheep and goats are not separated. The only dutiable 
item which reveals the amount of duty payable is seal skins, of which only 1,541 were exported in 1913, 
yielding presumably the same number of marks of revenue. On this basis 3,000 marks have been deducted 
from the total customs receipts and assigned to revenue from export duties in the table. 

3 The revenue from export duties in 1913 was 525,000 marks; from import duties, 973,000 marks. 
^ No export duties. 

Unfortunately the published statistics do not give the total values 
of dutiable and free merchandise, nor are there any figures which give 
the revenue collected from the different items of trade. From the 
table, however, it is evident that in Kamerun and Togo the few im- 
portant items of the import trade, dutiable at specific rates, materially 



« Koloniale Rundschau, 1913, p. 166. 



244 coL.o:KriAL tariff policies. 

iiicreased the average rate, since the general rate on articles not speci- 
fied was only 10 per cent and there were extensive free lists. In 
Southwest Africa, where the rates on tobacco and liquors were much 
heavier than in the other German colonies, the vast bulk of the trade 
was free of duty. The tariff system of Southwest Africa was thus 
very sim.ilar to that of many of the British Crown colonies, which have 
free trade except for duties on alcoholic beverages and on tobacco 
and a few other items. 

Treatment of alcoliolic liquors and firearms; duties and regulations. — 
Import duties on alcoholic liquors and firearms, found in the tariffs 
of all the colonies, were productive of revenue, but the chief purpose 
seems to have been the desire to keep these articles out of the hands of 
the natives. In all the colonies the importation and sale of firearms 
and ammunition were in the control of the governmental authorities, 
and careful measures were taken to limit the sale of arms to the 
Europeans.** In its legislation regarding the trade in alcoholic 
liquors and firearms, the Imperial Government followed in general 
the provisions of the Brussels act of 1890 and its amendments of 1899 
and 1906.*^ 

Ccnservation of natural resources. — Certain export duties seem to 
have been imposed with a desire to protect the native wild animals 
and natural resources of the colonies. Illiistrations are found in the 
dut}^ on ostriches exported from East Africa, which was increased by 
the governor's ordinance in 1911 from 10 rupees to 1,000 rupees on 
each bird,*^ and in a high duty imposed upon the export of female 
cattle from Southwest Africa. The duties upon guano exports 
from the same colony may have been dictated by motives of conserva- 
tion. In some cases this policy resulted in the absolute prohibition 
of exports, as in the case of Angora goats in Southwest Africa. 

NO EVIDENCE OF TARIFF PREFERENCES. 

TheGrerman colonial tariffs were all based on the open-door princi- 
ple. Their schedules contained no preferences either in import or 
in export duties ; nor were colonial products given preferential treat- 
ment when imported into Germany. The products of the colonies 
had in Germany the benefit only of the rates of the conventional 
tariff,*' ^ ^ 

The absence of preferential duties in the German colonial tariff 
system contrasts strikingly with the prevalence of such duties in the 
tariffs of several other great commercial nations. As already seen, 
this open-door policy, so far as most of the colonies were concerned, 

« This applied strictly to moflern breech-loading weapons. Smooth-bore muzzle-loaders and trade gun- 
powder were sold to the natives in some of the colonies. Trade in firearms and ammunition was prohibited 
in the customs territory of New Guinea, as well as in certain parts of Kamerun, in To;-'o, and in Southwest 
Africa. In Samoa and East Africa arms and ammunition were subject to hea^'y import duties. 

45 Acte Internationale de la Conference Internationale de Brussels; see Debidoiir 's Histoire Diplomatique 
del'Europe 1878-1904, Paris, 1916-17, Pt. I, pp. 320-3-14. 

^8 Deutsches Kolonialblatt, 1911, p. 738. The rupee has equaled, normally, .32.44§ cents in United States 
money . B ut see p . 33 1 . 

<^ Up to 1892 Germany had a single schedule of import duties applicable to goods of all origins. In the 
preceding year, negotiations had been begun which resulted in a series of treaties with Austria-Hungary, 
Belgium, S-';\'itzerland, Russia, and other countries granting to their products the lower rates specified 
in these treaties. These rates and those which succeeded them under later treaties are known as the "con- 
ventional tariff" as distingtiished from the statutory tariti in force on products of countries vrbich neither 
■have made special concessions to Germany nor are entitled to most-favored-nation treatment. In the 
short interval between the establishment of the conventional rates and June 2, 1893. colonial products 
paid the higher statutory and not the lower conventional rates. The reductions of the conventional tariff 
were, however, of little interest to the colonies, coffee being the onh- one of their exports affected and the 
quantity of coffee then produced in the German colomes was insignificant. 



GEKMANY. 245 

was pledged without a time limitation, by international obligations 
entered into by Bismarck. Later, its abandonment was freely advo- 
cated in German colonial circles which were particularly impressed 
by the growth of the preferential system in the colonies of other 
countries. The available sources do not disclose, however, that any 
attempt was made on the part of the Germ.an Government to secure 
a revision of the international agreements which guaranteed equal 
treatment in the German and other colonies. Nor did the advocates 
of preferential tariffs succeed in winning over the German Govern- 
ment to the application of that policy to German exports to South- 
west Africa — where alone it might have been applied without a 
revision of treaty obligations — or to the imports of colonial products 
into Germany. In the presence of these facts and factors — on the 
one hand an open-door policy inherited from a previous generation 
and not susceptible of easy change, and on the other a public opinion 
increasingly dissatisfied with this policy as other nations departed 
further from it — it is natural to inquire whether preferences to Ger- 
man trade were accorded indirectly. Concealed preferences are 
sometimes found in tariff schedules which present the most innocent 
appearance. There are also, as will be shown later, many kinds of 
preference which may be accorded to national trade quite independ- 
ently of tariff provisions. 

To begin with, it may be noted that no author, German or foreign, 
has accused the Germans of manipulating the colonial tariff schedules 
in favor of German trade. ^^ These authors probably reflect the 
general opinion of European merchants who had a practical knowl- 
edge of the subject. 

In such simple schedules as those of the German colonial tariffs 
preferences can not easily be concealed, but it is possible, if desired, 
to give slight advantages by granting free entry or low rates to those 
classes of merchandise which are imported predominantly from the 
m-other country.*'^ But the very fact that a whole class is designated 
rather than special varieties or makes, renders such exemption or 
imposition of a low rate of little consequence in international 
competition. 

The existence and the amount of such concealed preferences can 
be detected by comparison of the tariff schedules and the trade 
statistics, if the latter are sufficientl}^ detailed and accurate. The 
trade statistics of the German colonies do not meet this requirement, 
they afford data sufficient onlj^ for the drawing of tentative and 
limited deductions. ^*^ 

<8 E. g., Bouffard, Fernand: Le systeme financier des colonies aliemandes in Questions dipiomatiques 
et coloniales, vols. 27 and 28; Cheradame, Andre: La Colonisation et les Colonies Aliemandes, 1905; Johnston, 
Sir H. H.: Edinburgh ReAT.ew, Oct., 1914, vol. 220, p. 311. 

IS Another device is to put ad valorem duties on commodities of v/hich the cheaper qualities come from 
the mother country and specific duties on those of which she supplies the better qualities. In Southwest 
Africa all the duties were specific and in the other colonies most of the duties were specific except the uniform 
ad valorem rate on all goods not free and not otherwise dutiable. The Germans therefore seem to have 
made no use of this device. 

50 The data needed are tables of trade, by commodities and countries, giving for each item the duty, if 
any, paid tiiereon. This last is particularly necessary where there are extensive transactions on behalf 
of the government, officials, missions, settlers, etc., whose imports are free even though they are composed 
of goods upon the dutiable list. The German colonies published tables showing only exports and imports by 
commodities, and the totals by countries, and the total customs revenues collected. The other figures avail- 
able are the German (Berlin) figures for trade between Germany and the colonies. (Statistil-c des Deutsclien 
Reichs — e. g., for 1912, vol. 261?).) These give the German imports from and exports to the colonies by 
articles. But little use can be made of them in comparison with the colonial figures because (1) the classi- 
fications are frequently different, (2) the German export statistics are of "special trade" but as a matter 
of fact actually include considerable quantities of goods of non-German origin, e. g., rice and Scandina^daa 
lumber, whereas the colonial statistics are of "general trade/' i. e., they include imports both for eoa- 



246 COLONIAL TARIFF POLICIES. 

The figures for Southwest Africa, where the limited list of dutiable 
articles affords the best opportunity for making a statistical com- 
parison, show that a much larger proportion of goods of German 
origin than of foreign, entered free, and that the dutiable goods of 
German origin paid on the average much lower rates of duty than 
did foreign goods. Giving to the inadequacy of the available figures, 
however, this result can not be taken as conclusive, and, as explained 
elsewhere, not every inec[uality in the incidence of tariff rates can be 
considered objectionably discriminatory. An example of this may 
be cited in the American policy of putting high duties on luxuries, 
a policy which is altogether defensible even though it happens to 
affect the trade of certain countries more than that of others. In 
German Southwest Africa the advantage, if any, derived by German 
trade from the free list and the lower rates paid by the dutiable 
goods seems to have been due, not to any policy of favoring imports 
from Germany as such but to coincidence between the trade facts 
and national fiscal and economic policies. The duties imposed were 
levied on liquors^ tobacco, arms, sugar, and matches; and also on 
live cattle, sheep, fresh meat from cattle, and butter. Here, the 
latter duties are obviously protective of the local cattle industry 
and not of German trade; the former are the most commonly em- 
ployed of colonial duties — their object being fiscal and sumptuary — • 
and their presence can not be declared indicative of an intention to 
discriminate against the trade of other countries. 

It is true that the average duty on brandies, reduced to an ad 
valorem basis, was 185 per cent, while that on beer was only 28.7 
per cent; and that over two-thirds of the beer came from Germany, 
but only two-fifths of the brandy ^^; likewise that the rate on raw 
and rolled tobacco, of which trifling amounts are recorded as of 
German origin, was much greater (on the ad valorem basis) than 
the rates on cigars and cigarettes, of which large amounts came 
from Germany. But even if these figures are correct, th^y show 
only a coincidence — the policy of taxing brandy more heavily than 
beer, and raw tobacco more heavily than cigars ^^ is too generally 
followed to warrant any criticism being made of its use in Southwest 
Africa, regardless of the peculiarities of the trade. Similarly, the 
articles selected for free admission into the colonies, w^here there was 
a general rate of duty on all articles not specifi.cally dutiable or 
specifically free were in every case articles which were admitted free 
in obvious pursuance of the policy of promoting the economic develop- 
ment of the colonies with the greatest rapidity. If under these 
circumstances a greater proportion of the imports from Germany 
entered free than of iniports from other coun tries, ^^ this was due to 
the fact that the Germans were taking the leading part in the develop- 

sumption and for reexportation: (3) there are considerable discrepancies in .the figures, e. g., the figures 
for quantities (compared item by item with the values!'' imported from Kameron in 1912 show that Germany 
took only about one-half of the total exports of that colony, but colonial figures for values exported assign 
five-sixths of the exports to Germany. This shows either that foreign countries bought only the cheapest 
grade of each product or (doubtless the real explanation) that the Berlin figures are incomplete. The 
Berlin figures for "general"' trade are given only by groups of articles and show totals very little greater 
than those for "special" trade. 

5^ Assuming that the available figures are complete in this instance. 

62 1, e., on an ad valorem basis. The specific rates are usually somewhat higher on cigars and other 
tobacco manufactures than on leaf tobaccos. The liigh rates usually imposed on tobaccos, if they were 
made approximately uniform, on an ad valorem basis, would afford considerable protection to the manu- 
facturers of tobacco products. 

53 Note that it is not stated that they did. Also, for regions other than Southwest Africa not even 
tentative results can be obtained from the available figures. 



GEKMANY. * 247 

ment of their colonies and they naturally imported supplies and 
equipment largely from Germany. 

Concealed preferences might exist also in export duties — that is, 
articles exported chiefly to the mother country might be made free 
or be subjected to a low duty and at the same time substantial 
duties be imposed on articles exported chiefly to foreign countries. 
Whether there were such concealed preferences in the export duties 
of the German colonies, the figures do not show,^* and on the basis 
of general considerations there is even less reason to suspect their 
existence here than in the case of import duties. Export duties in 
the colonies are used largely as a means of taxing the natives, and 
as this tax can rarely be passed on^^ to the consumer, concealed 
preferences in export duties could have only the slightest and most 
indirect effects upon commerce. 

There were several considerations sufficient to dictate the mainte- 
nance by the Germans of colonial tariffs free both from open and 
from concealed preferences; it was distinctly to their advantage 
to do so. In the first place they had, in respect to nearly all of their 
colonies, given pledges to maintain the open door. In the second 
place, for building up trade between the fatherland and the depend- 
encies tariff preferences were not necessary. Without such prefer- 
ences, a large part of the trade of the colonies was in German hands, 
and this was most conspicuously the case in Southwest Africa, the 
only colony in which their treaty pledges left the German Govern- 
ment at liberty to introduce preferences. It appears from the fig- 
ures in the table on page 232 that 60 per cent of the total imports of 
all of the colonies came from Germany; but the colonial figures on 
which this percentage is based are incomplete in that they do not 
include considerable items of German trade which undoubtedly 
came in transit through such points as Zanzibar, Cape Town, etc. 
Further, the colonies imported considerable quantities of foodstuffs, 
kerosene, and other articles which Germany either did not produce 
or could not spare, which left but a small amount of competitive 
trade that might have been diverted to Germany by use of pref- 
erential tariffs.^® 

In the third place^ a systematic introduction of preferences might 
have lessened the productivity of the customs revenues. A lowering 
of the duties on imports from or exports to Germany, or an arrange- 
ment of the rates so as secretly to favor German trade, could hardly 
have been accomplished without decreasing the yield of the customs, 
since the trade with Germany formed so large a proportion of the 
total trade. A preference to Germany might have been granted 
by imposing a surtax on trade with other countries. But inasmuch 
as the exigencies of colonial finance demanded the imposing of duties 
on trade with the home country at the maximum point consistent 
with the other ends which it was sought to achieve in the develop- 
ment of the colonies, it would scarcely have been feasible to lay 
additional burdens on their foreign trade. Finally, the Germans 
entertained a certain apprehension that the establishing of a system 

64 The figures, sucli as they are, seem to show a preference for exports from New Guinea destined to 
Germany but equally to show a preference for exports from Kamerim destined to foreign coimtries. But 
discrepancies in the Igures are particularly large for the trade of Kamerun; and in no case do the figures 
seem sufficiently reliable to v/arrant any conclusions as to deliberate preferences in export duties. 

6& Unless the colony has a monopoly of the product affected. 

66 See Rathgen, Karl: Die Zollbegiinstigung des Handels zwischen Deutschland n. seinen Koioniea. 
In Schmoller's Jahrbuch fiir Gesetzgebung, 1911, vol. 35, pt I, pp. 227-250. 



248 * COLOI^TIAL TAKIFF POLICIES. 

of preferential tariffs in tiie German colonies might lead to retaliatory 
measures hy other colonial powers, notably Great Britain. In such 
event German exporters would have lost far more by the im.position 
of daties unfavorable to them in foreign markets than they would 
have gained by preferential rates in their ov\m colonies.^" 

Tariff schedules are^ as has previously been pointed out, only one 
of the instruments available for a government which wishes actively 
to promote the trade of its nationals in its colonies. Two other 
means^ at least, were used with effect in German Southwest Africa. 
Because of the defects of the ports and of the alleged need of regu- 
lating the loading and discharging of cargo, a practical monopoly 
of the landing rights was granted to the Woermann Steamship Line 
(German) for a limited number of years. All foreign trade had, 
therefore, to go through German hands, for hardly more than 1 per 
cent of the total trade crossed the land frontiers. Further, ' %eavy 
taxes, imposed on nonresident commercial travelers under the Ger- 
man regime, made it practically impossible for outsiders canvassing 
for foreign firms to compete with the local German merchants."^* 

Aside from Government-made regulations, many factors con- 
nected with the development of colonies tend to throw the trade into 
the hands of the nationals of the ruling country. In the case of 
German Southwest Africa several of the most effective of these fac- 
tors were in operation. The native population is very small, cer- 
tainly less than one person to the square mile.^^ The largest tribe, 
the Ovambos, whose numbers have been put as high as 156,000, 
was never brought under German control, and neither they nor the 
surviving Herreros and Hottentots were on good terms with their 
German masters. Accordingly the trade demands of the natives 
were never Europeanized, and this fact, together with the natural 
poverty of the country, meant that the native population did not 
appreciably" influence the volume or character of the import trade. 
As settlement by foreigners was not encouraged, and as many of the 
Boers who immigrated after the Boer War later left the country, 
practically the only buyers were German officials and German ranch- 
men and mine owners. The officials, matured in Germany and peri- 
odically returning to the homeland, naturally preferred German 
goods; the German capitalists as naturally brought their supplies 
from Germany and sent thek products there. The sale of diamonds — 
which constituted nearly 84 per cent of the exports in 1913 — was 
controlled b}" the Government through the Diamanten-Eegie. Hence 
it is in no way to be wondered at that most of the trade of this colony 
was with the home country. 

CONCLUSIONS AS TO PREFERENCES. 

The available statistics and other evidences do not admit of an 
affirmation either that Gerrnany did or that she did not make use 
of concealed preferences in her colonial tariffs. It seems that in 
Southwest Africa the duties imposed fell somewhat more heavily 
on foreign than on German products. But, considering the articles 
particularly affected, there was no peculiarity in the duties which 
would suggest that their object was other than fiscal or sumptuary. 
Open preferences might have been imposed in this colony had it 

57 Kuhn: Op. cit., p. 190; and Kobner: Op. cit., p. 177. 

58 Great Britain, Board of Trade Journal, Apr. 3, 1919, pp. 436-437. 

59 Even by estimates several times as great as the oflacial figures. 



GEEMAIiTY. 



249 



been the intention to make discriminations. That there was no 
such intention is the only conclusion which can be drawn from a 
consideration of the external evidences; the simplicity of the Ger- 
man colonial tariffs, their similarity to the tariffs of many British 
colonies, and the obvious explanations which attach in most cases 
both to the exemptions made and to the duties imposed. 

The evidences in general point strongly to the conclusion that the 
colonial tariffs did not contain concealed preferences. 

IV. Tariffs of Individual Colonies. 

GERMAN SOUTHW^EST AFRICA. 
SITUATION AND COMMERCE, 

German Southwest Africa extended over an area of 322,450 square 
miles lying between Portuguese West Africa in the north and Cape 
Colony and territories of the South African Customs Union on the 
south and east. The whole southern part and much of the eastern 
section are barren and desert. 

The population in 1913 numbered 98,830, of whom 14,830 were 
Europeans. In 1913 the exports of the colony, valued at 70,300,000 
marks, were greater than those of any other German colony, as a 
result of the large increase in diamond production in recent years. 
The chief industries v/ere cattle and sheep grazing and diamond 
mining. 

The principal items in the imports and exports of the colony in 
1913 are shown in Table 8: 

Table S.— Trade of So uthivest Africa, 19 IS. 

[In thousands of marks.] 

IMPORTS. 



Commodity. 



Agricultural and forest products . 
Grain 



Flour and bakery products . 

Vegetables 

Sugar.. 



Value. 



Tobacco, in all forms 

Alcoholic liquors 

Wood and timber 

Animals and animal products . . 

Meat, fresh and preserved . . 
Mineral and fossil raw materials, 

Coal.... 



1,.399 
2,271 
1,021 
978 
930 
1,580 
1,561 



756 



including mineral oils. 



Cement and lime 

Textiles and clothing 

Leather and leather wares 

Metals and metal v/ares 

Pig iron, iron rails, etc 

Miscellaneous iron wares. 

Machines, instruments, and vehicles. 

Industrial machinery 

Miscellaneous i 



812 



Total 43,426 



1,644 
3,715 



3,172 



13,727 



3,194 
3,317 



4,363 
1,209 
6,581 



5,0.52 
6,003 



EXPORTS. 



Animals and animal products 1 1, 482 

Hides of cattle I 521 



Mineral and fossil raw materials . 

Diamonds, not cut 

Copper ore , 

Miscellaneous 2 , 



Total. 



58, 910 
7,729 



67,625 



1,195 
70, 302 



1 Miscellaneous imports included drugs and chemical products, m-anufactures of wax, fats and oils, 
rubber goods, wooden wares, paper and books, earthen and glass wares, and arms and ammunition. 
- Miscellaneous exports were wool, ostrich plumes, lead, and guano. 



250 COLONIAL TARIFF POLICIES. 



THE CUSTOMS TARIFF. 



±^o customs ordinance was promulgated for Southwest Africa 
until 1896, though for some years previous the importation of liquors 
and of arms had been restricted by a licensing system.^° The tariff 
which went into force on December 1, 1896, levied duties on liquors, 
arms, tobacco, preserved foodstuffs, coffee, matches, textiles, etc., 
and the list was elaborated in 1898 and 1903.^^ From November 
18, 1904, however, all import duties were suspended except those on 
brandies, arms, and ammunition.^^ 

The ordinance of April 18, 1908, somewhat increased the dutiable 
list but the tariff of Southwest Africa remained much the simplest 
and most restricted of the German colonial tariffs. At no time did 
it contain a general ad valorem rate on aU articles not enumerated 
and at no time since 1904 did the import duties yield any considerable 
sums of revenue. With the great exception of the duty on diamonds 
the export duties were practically negligible. The duty on diamonds 
was imposed by the ordinance of December 16, 1908,^^ at the rate of 
10 marks per karat, but the rate was changed within three months 
to 33 f per cent ad valorem and so continued until its repeal on 
December 31, 1912. 

Import duties. — The ordinance of April 18, 1908, remained in force 
until the end of German rule in Southwest Africa. By it ®^ import 
duties were collected on six groups of commodities: 

I. Tobacco — including cigars, cigarettes, roll and manufactured 
tobacco, tobacco substitutes, and '' dagga" : The rates on tobacco and 
its manufactures are high compared with those imposed on these com- 
modities when imported into Germany or into other of the colonies. 
On cigars the rate was 5 marks per kilogram, which amounted in 
1913 to the equivalent of 52 per cent ad valorem. Cigarettes paid 
10 marks per kilo. On roll tobacco, which was the largest item in 
tobacco imports in 1913, the rate was 4 marks per kilogram. The 
imports amounted to 72,500 kilograms, valued at 187,000 marks, an 
average of 2.57 marks per kilogram. The duty of 4 marks per kilo- 
gram was therefore equivalent to 150 per cent ad valorem. 

II. Beverages — beer, wines (still and sparkling), brandy, and ether: 
The brandy tax seems to have been the most lucrative. Two rates 
were imposed, 4 marks per liter on brandy with 50 per cent or less of 
alcoholic content, and 6 marks on brandy with over 50 per cent of 
alcohol. The average value of the brandies imported in 1913 was 
2.80 marks per liter; hence it is obvious that the tax was extremely 
high. Even if all the brandy had been of less than 50 per cent alcoholic 
content, the tax would have been the ecjuivalent of over 140 per cent 
ad valorem. On still wines the tax was 50 pfennigs per liter, the 
equivalent in 1913 of 40 per cent ad valorem. Beer was taxed at 15 
pfennigs per kilogram, gross weight, and champagne at 1 mark per 
kilogram gross. 

III. Animals and animal products: This section in the schedules 
may have been introduced to encourage the domestic live-stock in- 

63 B. I. d. D., 189.5-93, No. 118. 

61 lb.. No. 118, 2d ed., and Ist and 3d Supplements thereto. 

62 lb., 4th Supplement, Decree of Nov. 17, 1904. Meats had been made free on July 29 and the duties 
en other foodstuffs had been suspended on Aug. 15. 

es Diamonds had been discovered in April, 1908. See p. 239 fn. 

w As amended by the omission of perfumes and cosmetics from Feb. 1, 1909. 



GEKMANY. 251 

industry. The rates were not high. The duty of 30 marks per head 
on live cattle was equivalent in 1913 to about 10 per cent ad valorem. 
The tax of 40 pfennigs per kilogram on fresh meat ^^ was more onerous, 
having been equivalent to 20 per cent ad valorem. 

IV. Sugar: The tax of 10 pfennigs per kilogram, gross, on sugar 
applied to cane, beet, starch, and fruit sugars and other fermentable 
varieties of sugar in every form; also to sirup and molasses. 

V. Firearms and munitions: The importation of firearms and mu- 
nitions was carefully regulated by the ordinance of March 29, 1897. 
The Imperial Government alone was authorized to import and to deal 
in these articles. Europeans might import arms and ammunition for 
their personal use, but must give satisfactory guaranty that they 
would not sell or dispose of such goods to third parties without the 
authorization of the administrative officials. Breech-loading guns 
were dutiable at 20 marks each; others at 5 marks. Powder was 
dutiable at 1 mark, shot at 10 pfennigs, and cartridges at 20 pfennigs 
per kilogram. 

VI. Chemical and pharmaceutical products; The only goods taxable 
under this section were matches, 50 pfennigs per kilogram, and medi- 
cines containing alcohol or ether, ^^ 5 marks per kilogram. 

Export duties and proliihitions on exportation. — ^Af ter the repeal of 
the export duty on diamonds, export duties were without fiscal im- 
portance. The duty on cows was probably a measure of conserva- 
tion. The duties on angora goats and ostriches were changed to pro- 
hibitions in response to legislation in British South Africa prohibiting 
exportation except to neighboring colonies from which exportation 
was likewise prohibited save for a similar exception. The export 
duties in force during the last year of German rule in Southwest Africa 
were as follows : 

On- 
Female cattle, per head 20 marks. 

Sealskins and bobskins, each 1 mark. 

Guano, ^^ per metric ton Free to 20 marks. 

Angora goats ^* Prohibited. 

Ostriches ^^., Prohibited. 

Ostrich eggs ^^ Prohibited. 

GERMAN EAST AFRICA. 
SITUATION AND COMMERCE. 

German East Africa had an area of 384,180 square miles and a 
total population of 7,666,000. In this population there were 5,000 
whites and 15,000 other nonnatives. 

The chief products of the colony were sisal hemp, rubber, skins and 
hides, raw cotton, and copra. German settlers had plantations where 
coconut palms, tobacco, cacao, rubber, cotton, and sisal hemp were 

65 Including frozen beef. 

66 Except those for use in hospitals and similar institutions. 

67 The duties on guano were fixed on a sliding scale, varying with the content of ammonia and also with 
the annual production. Producers of less than 500 tons annually paid no duty; producers of 500 to 1,000 
tons, 1.25 to 5 marks per ton; and producers of over 2,000 metric tons annually paid 5 to 20 marks per ton. 
Guano is not recorded separately in the trade returns, and probably no (dutiable) guano was exported. No 
female cattle were exported. In 1910-11, the last year in which the yield of export duties was reported 
separately, the exportation of sealskins accounted for the whole of it. The duty of 5 marks each on ewes 
(sheep and goats), repealed from May 1, 1913, probably produced no revenue. 

68 Emperor's decree of Feb. 15, 1909. (Deutsches Kolonialblatt, Aug. 15, 1909.) The penalty for violation 
was 10,000 marks and a year's imprisonment. The prohibition did not apply to neighboring colonies which 
inflicted a similar penalty on the violation of the like prohibition. 

185766°— 22 17 



252 



COLOI^IAL TARIFF POLICIES. 



cultivated. Mineral deposits have been discovered, particularly coal, 
iron, lead, copper, mica, and salt. 

The principal items in the imports and exports of the colony in 1913 
are shown in Table 9. 

Table 9.— Trade of East Africa, 1913. 

[In thousands of marks.] 

IMPORTS. 



Commodity. 



Agricultural and forest products. 
Rice 



Flour and bakery products 

Sugar 

Tobacco products 

Alcoholic liquors 

Timber 

Animals and animal products 

Edible products 

Mineral and fossil raw materials 

Cement 

Petroleum 

Chemical and pharmaceutical products 

Textiles and clothing 

Cotton cloths 

Metals and metal wares 

Railroad material 

Miscellaneous iron wares 

nstruments, machines, and vehicles 

Agricultural and industrial machinery. 
Miscellaneous i 



Total 53,358 



Values, 



3,714 
999 
721 
876 

1,048 
664 



1,559 

'i'oso 



622 



12,977 



4,676 
2,519 



1,249 



848 



1,721 
2,437 

1,432 
16,975 

10,505 

4,102 
6,338 



EXPORTS. 



Agricultural and forest products. 

Coffee 

Copra 

Groundnuts 

Cotton 

Sisal hemp 

Rubber 

Animals and animal products. . . 

Hides and skins 

Insect wax 

Mineral and fossil raw materials. 

Gold 

Mica 

Miscellaneous 2 



Total. 



' 931 
2,348 
1,348 
2,414 

10,342 
6.567 



5,490 
1,415 



26,522 



7,639 



1,206 



678 
313 



183 



35,550 



1 Included manufactures of wax, fats and oils, leather and leather goods, rubber goods, wooden wares, 
earthen wares, glass wares, paper and books, weapons and ammunition. 

2 Included sesame, ivory, copal, hardwoods, tan bark, dairy products, rice, and vegetables. 

THE CUSTOMS TARIFF. 

On December 22, 1890, Germany, Great Britain, and Italy signed 
a treaty by which the import duties of their territories in the eastern 
part of the conventional basin of the Congo were restricted to 5 per 
cent ad valorem. This treaty came into force in 1892 at the same 
time as the Brussels convention. The tariff decree which came into 
force in German East Africa on April 1, 1893,^^ laid down a uniform 
rate of 5 per cent on all imports not on the free list, with the excep- 
tion of specific rates on maize, rice, and chiroko. In addition to this 



69 As modified by decrees of Aug. 30 and Oct. 27, 1894. B. I, d. D., 1894-95, No. 114. 



GEKMANY. 253 

a consumption tax, previously imposed, was levied at the rate of 15 
per cent on alcoholic beverages other than beer and wines, and of 5 
per cent on dutiable articles not enumerated.^^ 

The total charge on most articles not specifically exempt was thus 
not 5 per cent but 10 per cent ad valorem. Export duties were levied 
on all exports except the products of European plantations, at rates 
from 1.5 per cent to 31.5 per cent, including the uniform tax of 1.5 
per cent.'^^ 

The German position in East Africa was originally established by 
proceeding into the interior through the coastal possessions of the 
Sultan of Zanzibar. The German East Africa Company leased the 
coast strip in 1888, and in 1890 the German Government purchased 
it from Zanzibar, made a new contract with the German East Africa 
Company, and took it under its own administration. The commercial 
treaty between Germany and Zanzibar "^^ had strictly limited both 
the export and import duties of this coast; the lease to the German 
East Africa Company left the company full liberty in regard to duties 
within the limits of the treaties which bound Zanzibar; and the con- 
tract between the German Government and the company contem- 
plated that the Government should not alter the duties so as to make 
the receipts fall below 600,000 marks annually.^^ 

The import schedule in the tariff of 1893 differed from that of the 
treaty of 1885 ^^ only by the addition of shelled rice and four other 
items. 

The last German East African customs tariff was based on an ordi- 
nance of June 13, 1903, modified by successive ordinances in 1904, 
1907, 1908, 1909, 1911, and 1913. This tariff appUed alike to the cus- 
toms houses on the coast and those on Lake Tanganyika and other 
interior points. In 1913 the revenue collected on the coast was 
4,022,000 marks; that collected at other stations 1,484,000 marks. 
In the coast- stations export duties produced only 9 per cent of the 
customs revenue, but in the interior they produced 48.5 per cent.^^ 

Import duties, — ^A general duty of 10 per cent ad valorem was laid 
upon all unenumerated imports, with the exception of those con- 
tained in the free list. The latter comprised the usual exemptions 
intended to encourage settlement and industry, with particular atten- 
tion to the needs of tropical agriculture. Certain tropical products — 
ivory, horns, hides, tortoise shells, etc. — upon which export duties 
were laid, were admitted as imports free of duty. Specially enu- 
merated imports made subject to duty may be grouped as follows: 

I. Alcoholic liquors, including spirits of all kinds, alcoholic essences, 
perfumes, wines, and beer. 

II. Tobacco, raw and manufactured. 

'0 In 1899 fish v/as listed for a duty of 5 per cent and a consumption tax of 10 per cent — thus \iolating not 
only the spirit of the treaty with Great Britain and Italy but also the final act of the conference of Berlin 
which, as modified by the "Additional declaration" of Brussels in 1890, limited import duties (except on 
alcoholic beverages) to 10 per cent throughout the conventional basin of the Congo and prohibited other 
duties on i mports. The former treaty had prescribed that agricultural machinery should enter free of duty 
but until 1899 the Germans permitted this only when the importation was made by the prospective users. 

?i The rates on animals were specific. The most important export duties were: On cloves, 30 per cent; 
on ivory and copal, 15 per cent; on hides and tortoise shell, 10 per cent; on cowries and sandalwood, 5 per 
cent; with the additional 1.5 per cent in each case. The ad valorem rates on exports were for the most part 
those prescribed by the treaties of Germany and Great Britain with Zanzibar, made in 1885-86. 

72 Dec. 20, 1885 (ratified, July 5, 1886). Brit, and For. State Papers, vol. 76, p. 247. 

73 In the fiscal year 1892-93, import duties yielded 241,000 rupees, and export duties yielded 449,000 rupees 
—the two making a total, at the current (monthly) rates of exchange, of 1,105,000 marks. 

'4 Germany-Zanzibar. 

75 The Nebeneinnahmen were 203,000; the consumption duty on salt, 99,000; and other revenues 12,000 
marks. The interior stations produced only 4 per cent of these receipts. 



254 COLONIAL TARIFF POLICIES. 

III. Opium, hemp, and hashish. 

IV. Foodstuffs principally for the use of the native population, 
such as various beans and grains and salt. 

V. Firearms and ammimition. 

When the specific duties are translated into their ad valorem 
equivalents, it develops that the heaviest duties were imposed on 
alcoholic liquors, these ranging from 24 per cent on beer and wine to 
70 per cent on brandy. Grains and vegetables paid on an average 
the equivalent of 5.1 per cent ad valorem; and salt, of 13.9 per cent. 
The duty on opium, hemp, and hashish was ad valorem, fixed at 25 
per cent. 

Export duties. — The export tariff schedule of German East Africa 
-was more extensive than that of any other German colony. It pro- 
vided duties upon the following articles: 

Ivorv. 



Also upon articles manufactured from 
these raw materials. 



Teeth and horns of wild animals. 

Horns of domestic animals. 

Raw hides and skins. 

Tortoise and other shells. 

Live animals, wild and domestic. 

Fresh meat and sharks' fins. 

Rubber (other than plantation). 

Copal. 

Woods of all kinds and timber products. 

Mat weed, palm leaves, and manufactures thereof. 

Native tobacco. 

Wax. 

Sugar cane and its products. 

Salt. 

Sisal hemp plants. 

Ostrich eggs. 

The selection of the foregoing articles for the imposition of export 
duties seems to have been dictated by motives other than the desire 
for revenue. A number of the most valuable exports remained duty 
free. The desire to encourage the agricultural industry of European 
settlers undoubtedly explains the exemption from export duties of 
coffee, cotton, and sisal hemp, and perhaps of copra and kola nuts 
as well. The duties ranged from 2 per cent on wax to 15 per cent on 
ivory, copal, fresh meat, and on some classes of horns and hides. 
Other horns and hides and tortoise shell paid 12 per cent; and salt, 
native tobacco, and wood, 10 per cent. 

Specific duties were charged on wild birds and animals, ranging 
from 1.33 marks (1 rupee) on parrots to 1,333 marks (1,000 rupees) 
on ostriches. The duty on rubber amounted in 1913 to about 10 
per cent ad valorem. 

KAMERUN. 

SITUATION AND COMMERCE. 

Kameron was one of the largest and most important, commer- 
cially, of the German colonies. Its area in 1913, inclusive of terri- 
tory recently acquired from France, was 298,000 square miles and 
its population numbered 2,652,900, of whom fewer than 2,000 were 
whites. 

The principal items in the imports and exports of the colony in 
1913 are shown in Table 10. 



GEKMANY. 



255 



Table 10. — Trade of Kamerun, 1913. 

[In thousands of marks.] 
IMPORTS. 



Conunodity. 



Value. 



Agricultural and forest products 

Rice 

Tobacco and tobacco manufactures . 

Alcoholic liquors 

Animals and animal products 

Dried fish 

Fish conserves 

Meat, fresh and preserved 

Milk, butter, eggs, honey, etc 

Mineral and fossil raw materials 

Cement 

Salt 

Coal 

Chemical and pharmaceutical products . 

Artificial manures 

Textiles and clothing 

Cotton cloth 

Cotton clothing 

Leather and leather goods 

Earthen and glass ware 

Metals and metal wares 

Miscellaneous iron wares 

Instruments and machines 

Miscellaneous i 



1,561 
1,197 
1,350 



1,824 
723 
775 
523 



422 

528 
483 



239 



4,429 
2,937 



3,355 



Total. 



6,328 
3,948 

1,925 

1,124 

8,857 



568 

515 

5,670 

1,937 
3,744 

34,616 



EXPORTS. 



Agricultural and forest products . 

Cacao ^ 

Kola nuts 

Palm kernels 

Palm oil 

Wood and timber 

Rubber 

Animals and animal products. . . 

Ivory 

Miscellaneous ^ 



5,718 
971 
6,226 
1,961 
941 
12, 122 



28,188 



872 



824 



91 
Total 1 29,151 

1 Included soap, rubber goods, wooden wares, paper and books, and weapons and ammunition. 

2 Cacao is the raw, cocoa the manufactured article. 

3 Included mineral and industrial products. 

THE CUSTOMS TARIFF. 

The ordinances of July 17 and August 1, 1911,^^ relating to the 
customs tariff, imposed a very simple system of duties. 

Import duties. — ^There were 10 items with specific duties; all tex- 
tile wares were charged 15 per cent ad valorem, all iron wares 20 
per cent, and all un enumerated articles, not on the free list, 10 per cent. 
An extensive free list comprised machinery, tools, building materials, 
household equipment, in fact all articles necessary for the encourage- 
ment of industry and for the comfort and prosperity of settlers. 
An exceptional privilege was granted in paragraph 27, allowing plan- 
tations to import free of duty under special permit rice and dried 
fish as food for their workmen. Free entry of these foods was per- 
mitted during only three months in each year, and the quantity so 
imported by each plantation was fixed by the Government on the 



^8 Revised in part by ordinances of Nov. 1, 1911, Nov. 5 and May 14, 1912, and Mar. 2S and Sept. 10, 1913. 



256 COLONIAL TARIFF POLICIES. 

basis of the number of workmen employed in the previous year. 
The provisions of paragraph 27 were to remain in force for three 
years. 

Import duties on alcoholic liquors consisted of a combination of 
specific and ad valorem charges. The duties on spirits and wines 
were fixed on a sliding scale, varying with the alcoholic content of 
the imported beverages. For example, the duty on spirits of a 
value of less than 1 mark per liter and of an alcoholic content of 
less than 50 per cent was 1.60 marks per liter. The duty increased 
by 5 pfennigs for every additional per cent of alcohol. On wines 
the duty for those containing less than 15 per cent of alcohol was 10 
per cent ad valorem; wines of an alcoholic content between 15 and 
25 per cent paid 0.50 mark per liter. The duty on beer was approxi- 
mately 10 pfennigs per liter. The other specific import duties were 
as follows: 

Marks. 

Firearms of all sorts each. . 10. 00 

Powder and cartridges per kilo, gross . . 1, 00 

Salt per metric ton . . 20. 00 

Tobacco, unmanufactured per kilo, net. . . 50 

Bice per metric ton. . 20. 00 

Dried fish, including salt fish do 50. 00 

Perfumes and cosmetics, containing alcohol or ether per liter. . 2, 00 

Export duties. — ^The expor^ duties were as follows: 

Marks. 

Rubber, excepting that gi'own on plantations per kilo, net . . 0. 40 

Ivory, rough or manufactured do 2. 00 

Cattle: 

. Cows each . . 20 . 00 

Bulls do.... 10.00 

Calves do 5. 00 

Horses do 20. 00 

Mules do. . . . 3. 00 

Sheep and goats do. ... 1. 00 

Kola nuts, fresh per 1,000. . 6. 00 

The duty on forest rubber, 0.40 mark per kilogram, was, for the 
years 1909-1913, the equivalent of a rate of 5.2 per cent ad valorem 
on the basis of the average price of rubber. 

Prohibitions were placed on the importation of muzzle-loading 
guns and trade gunpowder; in certain portions of the country im- 
portation of aU arms and ammunition was forbidden. 

SEPARATE TARIFF FOR A PART OF THE COLONY. 

A sejjarate tariff was framed in 1904^^ for that part of the colony 
lying within the western zone of the conventional basin of the Congo 
River. In this zone a general import duty of 10 per cent ad valorem 
prevails, with the exemption of implements and tools for use in 
agriculture and of transportation equipment for use on land and 
water. Specific import duties were laid upon alcoholic liquors, with 
rates somewhat lower than those imposed in other sections of 
Kamerun. Export duties in the western zone were laid on ivory 
(10 per cent) and rubber (5 per cent) and also upon groundnuts, 
coffee, copal, palm oil, palm nuts, and sesame. Rubber harvested 
on plantations was exempt from export duties. 

" Ordinance of the Governor of Kamerun, Oct. 24, 1904, amended Apr. 15 and Dec. 23, 1907. 



GERMANY. 



257 



TOGO. 



SITUATION AND COMMERCE. 



Togo occupied an area of 34,000 square miles on the west coast of 
Africa between the Gold Coast colony (British) on the west and 
French Dahomey on the east. In 1913 the population numbered 
1,032,400, of whom 368 were whites. Maize, yams, tapioca, grapes, 
and bananas are cultivated by the natives, and oil palms, nibber 
trees, and dyewoods grow in the forests. Palms, coffee, and cacao 
are grown on plantations. 

The principal items in the imports and exports of the colony in 
1913 are shown in Table 11. 

Table 11.— Trade of Togo, 1913. 

[In thousands of marks.] 
IMPORTS. 



Commodity. 



Value. 



Agricultural and forest products 

Tobacco and tobacco products 

Alcoholic hquors 

Wood and timber 

Animals and animal products 

Fish 

Mineral and fossil raw materials 

Cement and building materials 

Salt 

Petroleum 

Chemical and pharmaceutical products , 
Textiles and clothing 

Cotton cloths 

Metals and metal wares 

Miscellaneous iron wares. 

Instruments, machines, and vehicles. . . 

Weapons and ammunition 

Miscellaneous 



Total. 



341 
753 
290 



614 



276 
154 
153 



2,210 



2,030 

797 
721 



351 

2,680 

1,478 

351 

312 

1,911 



10,831 



EXPORTS. 



Agricultural and forest products. 

Maize 

Cacao 

Palm kernels 

Palm oil 

Cotton 

Rubber 

Animals and animal products . . . 

Cattle 

Industrial products 

Miscellaneous 



Total. 



288 

333 

2,558 

518 

582 
360 



334 



5,082 



€39 



158 
3,259 



9, 138 



THE CUSTOMS TARI¥F. 



The tariff in force in Togo at the outbreak of the war was sub- 
stantially that of 1904.78 

Import duties. — This tariff contained the usual list of articles 
exempted from import duty when for use by the Government and 
by missionaries. Commodities necessary to make life comfortable 



78 Ordinance of July 29, 1904, amended Sept. 20, 1907, Mar. 24, 1910, Jan. 2, Jan. 23, and Nov. 12, 1912, 
and Jan. 9, 1914. 



258 COLONIAL TARIFF POLICIES. 

and attractive to European settlers and supplies for industrial 
development also entered free. In addition ivory, india rubber, 
palm kernels, palm oil, kola nuts, and other agricultural products from 
West Africa were exempted from import duties. The schedule of 
import duties was as follows : 

1. Spirits and alcoholic liquors of all kinds, except nonsparkling wines, spark- 

ling wines, and beer: 

A. Spirits and alcoholic liquors, neither sweetened nor mixed with any 

substance, so that the alcoholic strength can not be ascertained by 
means of the alcoholometer — 

Marks. 

a. Of a strength of 50° Tralles per liter. . 0. 800 

b. Of a strength above 50° Tralles per degree in excess do 016 

c. Of a strength under 50° Tralles per degree under do 016 

B. Spirits and alcoholic liquors, sweetened or mixed with any substance, 

so that the alcoholic strength can not be ascertained by means of the 
alcoholometer per liter. . 1. 20 

2. Tobacco per kilo. . . 50 

3. Salt do 02 

4. Sugar do 05 

5. Petroleum and illuminating oils per liter. . . 05$ 

6. Firearms each. . 3. 00 

7. Gunpowder per kilo . . 1. 00 

8. Fish of African origin, dried, salted, smoked, cooked, or fried "^ do 05 

9. All other articles not expressly designated as being free of duty, ^° ad valo- 

rem (per cent) 10 

10. Wines of all kinds and similar beverages containing wine: 

a. Containing not more than 15 per cent of alcohol, ad valorem (per 

cent^ 10 

b. Containing more than 15 per cent, but not more than 25 per cent 

of alcohol per liter. . . 60 

c. Containing more than 25 per cent of alcohol (dutiable under 1 B.). 

Export duties. — There were no export duties. However, the ex- 
portation of neat cattle, sheep, goats, pigs, and poultry was per- 
mitted only upon authorization of the governor,^^ who imposed 
small license fees. The export of nut wood was prohibited, and the 
export of other sorts of wood was permitted only by official authori- 
zation.^^ 

GERMAN NEW GUINEA. 

SITUATION AND COMMERCE. 

The German customs territory of New Guinea comprised Kaiser 
Wilhelm's Land, Prince Bismarck ilrchipelago, the Solomon Islands, 
and, since July 15, 1908,^^ the CaroHne, Pelew, Marianna (Ladrone), 

" This provision dates from Sept. 20, 1907. 

80 The rate on articles not enumerated vras 4 per cent under the convention of 1894 with Great Britain, 
but was raised to 10 per cent by the ordinance of July 29, 1904. The same ordinance cut down the free list 
from nearly 100 items to 33 and made the duties on salt, sugar, and petroleum specific. The Convention 
between Great Biitaia and Germany, signed Feb. 24, 1894, to be effective May 1 of that year (Brit, and 
For. State Papers, Vol. 86, p. 37) created a customs union between Togo and that part of the Gold Coast 
which lies east of the river \ olta. These territories were not to be separated by any customs line and the 
tariff applicable to both was embodied in the treaty. Its schedule was simple: specific duties were im- 
posed upon liquors, tobacco, fi-.rearms and powder; there was a long free list, and all other articles including 
such important trading commodities as textiles, sugar, and kerosene were made dutiable at 4 per cent ad 
valorem. The operation of this treaty was prolonged until April 30, 1904, without chanse of rates, except 
the increase of the liquor duties in 1900 in accordance with the Brussels Convention of the preceding year. 

81 Ordinance of Dec. 31, 1904. 

82 Ordinance of June 10, 1908. Deutsches Kolonialblatt, Sept. 15. 1908. Until this ordinance went into 
effect no duties had been collected in the islands named. In the Marshall Islands license taxes had been 
collected including the foUo-n-ing: Commercial firms with an annual business of 500.000 marks or more, 
9,000 marks anunally: other commercial firms, 6,000 marks annually. Trading vessels effecting com- 
mercial transactions for firms not established there, 1,000 marks per voyage; trading stations, 100 marks 
annually. B. I. d. D., No. 119. 



GEEMA:fTY. 



259 



and Marshall Islands. The combined area, 95,160 square miles, had 
a population in 1913 of about 603,000 people, including about 1,500 
whites — 1 in 400 of the total. 

In 1912 the imports and exports of the whole customs area were as 
follows : 

Table 12.— Trade of New Guinea, 1912. 

[In thousands of marks.] 

IMPORTS. 



Commodity. 


Value. 


Grains and vegetables 


1,417 


Coffee, tea, cocoa, and sugar 


172 


Spices, etc.. 


107 


Tobacco 


392 


Liquors '. 


405 


Wood and timber 


456 


Meat and fish . 


987 


Earth and stone 


206 


Coal 


407 


Mineral oils 


146 


Candles and soap 


164 


Drugs and apothecary wares 


274 


Yarns and textiles 


800 


Clotliing and accessories 


326 


Boats 


143 


Wooden wares . . .... . 


195 


Earthen and glass ware 


138 


Metals and metal wares 


1,089 




428 


Miscellaneous ^ ... . . . 


956 






Total . . 


9,207 





EXPORTS. 



Copra 

Rubber 

Mother-of-pearl 

Birds of paradise (skins) 

Phosphates 

Curiosities 

Miscellaneous 2 

Total 



6,010 
156 
158 
449 

4,991 
107 
216 



12; 087 



1 Included salt, leather and leather goods, paper and books, and weapons and munitions. 

2 Included tortoise shell, trepang, and cacao. 

THE CUSTOMS TAllIFP. 

The customs tariff established by the ordinance of June 10, 1908, 
including amendments, ^^ was as follows: 

Import duties. — 



4. 



Marks. 

Cigars per 1,000. 20. 00 

Cigarettes do 10. 00 

Tobacco and all manufactures thereof, not specially mentioned, 

per kilo, net 3. 00 

Spirits, potable, brandy, and liquors of all kinds, also essences containing 

alcohol per liter . 2. 00 

Southern wines and sweet wines, sparkling wines do 1.25 

If valued at more than 5 marks per liter ad valorem (per cent) . 20 

Still wines, not mentioned elsewhere per liter. . 60 

If valued at more than 3 marks per liter ad valorem (per cent) . 20 

Beer of all kinds .per liter. . 20 

Cider and other fruit wines do .25 

All other articles^, not expressly exempted ad valorem (per cent) . 10 



63 Ordinances of July 7, 1908; Feb. 1 and 16, 1909; Nov. 22, 1912; and Oct. 14, 1913. 



260 COLOI^IAL TARIFF POLICIES. 

In addition to the usual items in the free list, rice, salt meat, and 
dried fish were exempted. The importation of opium, except for 
medicinal purposes, and of weapons, am.munitions, and explosives,^'* 
and of used clothing and textile fabrics was prohibited. 

Export duties: 

Marks. 

1. Copra per metric ton. . 10. 00 

2. Trepang: 

Grade A do ... . 100. 00 

Grade B , do 50. 00 

Grade C do ... . 30. GO 

3. Tortoise shell per kilo . . 5. 00 

4. Entire tortoise shells each . . 10. 00 

5. Mother-of-pearl shells per metric ton . . 100. 00 

All other shells containing mother-of-peari do 10. 00 

6. Skins of birds of paradise, parts thereof, and feathers ^^ each . . 20. 00 

7. Skins of crown pigeons, ^^ etc do 5. 00 

8. Cassowary feathers ^' per kilo, net. . 25. 00 

9. Egret feathers »' do 1, 000. 00 

SAMOAX ISLANDS (SAYAII AND t PGLU) . 
SITUATION AND COMMERCE. 

German Samoa was, after Kiaochow, the smallest customs unit 
among the German colonies; with an area of only 1,000 square miles 
it had a population in 1913 of 38,544, of whom about 544 were whites. 

The imports and exports for the colony are shown in Table 13: 

Table IS.— Trade of Samoa, 1913. 

[In thousands of marks.] 
IMPORTS. 

Commodities. I Value. 



Alcoholic liquors 

Tobacco, cigars, etc 

Gunpowder 

Foodstuffs 

Textiles and clothing 

Metal wares 

Wood and building materials. 

Machines and vehicles 

Miscellaneous 

Total 



2n 

71 

1 

2,051 
906 
231 
747 
237 

1,221 



5,676 



EXPORTS. 



Copra 

Cacao 

Kawa root.. 
Rubber 

Total. 



4, 121 

1,063 

64 

91 

5, 339 



M Except for use of the foreign population. 

85 Raised from 2 marks to 5 marks by an ordinance of Mar. 1, 1911, and to 20 marks by an ordinance of Nov. 
22, 1912. On Sept. 26, 1913, it was announced that no permits for hunting birds of paradise would be granted 
for the year 1914. 

86 Raised from 0.50 mark to 5 marks by ordinance of Oct. 14, 1913. 

87 Imposed by ordinance of Oct. 14, 1913. 



GEBMAI!TY. 



261 



THE CUSTOMS TARIFF. 

The schedule of import duties prescribed by the ordinance of July 
1, 1901, was as follows: 

Marks. 

1. Ale, porter, and beer per liter.. 0. 20 

2. Spirits do 2. 50 

3. Wines, other than sparkling do 50 

4. Wines, sparkling do 1. 40 

5. Tobacco per kilo. . 4. 50 

6. Cigars do 9. 00 

7. Sporting arms each . . 16. 00 

8. Gunpowder per kilo. . 2. 50 

9. Goods of all kinds except those above mentioned, .ad valorem (per cent). . 12^ 

Prohibitions were imposed by ordinance of August 31, 1907, upon 
the importation of cacao seed and cacao plants from Ceylon and the 
Dutch East Indies. These commodities might be imported from 
other countries subject to license. The importation of all animals 
except domestic animals was prohibited, except upon special permit, 
(ordinance of February 16, 1909). Domestic animals could be 
imported only upon exhibition of a certificate from quarantine 
authorities at the port of origin. The importation of air guns and 
pistols was prohibited on and after January 1, 1912 — doubtless as a 
measure of protection for wild birds. 

The tariff of Samoa contained no list of articles exempted from 
import duties and no export duties. 

KIAOCHOW. 

SITUATION AND COMMERCE. 

The German protectorate of Kiaochow comprised an area of about 
200 square miles on the coast of the Chinese Province of Shantung, 
(Germany's administrative jurisdiction also extended over the Bay 
of Kiaochow and small islands off the coast.) The population in 
1913 was 194,470, of whom 187,000 were Chinese and 4,470 Germans 
(including the garrison). ^^ 

The commerce of Kiaochow consisted largely of transit trade. 
Table 14 shows the principal items of import and export in the fiscal 
year ended September 30, 1913. 

Table 14. — Trade of Kiaochow; chief commodities, 1912-13. 
[In thousands of marks.] 



Commodity. 


Value. 


Commodity. 


Value. 


IMPORTS. 


23, 752 

23,793 
5,368 
9, 440 

. 3,742 
4,586 
4,577 
5,393 
4,802 
2,478 
1,123 
1,383 

31,817 


EXPORTS. 

Strawboard 


17, 590 




Groundnut oil 


7,187 


Shanghai cotton yarn 


Bean oil 


2,756 


Paper 


Silk, yellow 


7,507 
1,062 


Metals 


Silkwaste 


Sugar . 


Shantung pongees . 


8 009 


Matches. . . 




3,169 


Petroleum 


Ground-nuts, shelled 


11 382 






1 , 126 


Cigarpttps, Chinpse 


Etg yolks 


1 287 


Cigarettes^ not of Chinese origui. . 


Cattle 


2,671 


Materials for railroads and mining 


ooal... 


2, 593 




Cotton 


5,612 




T<'rp';h mpnt 


1 ■^IG 


Total 


122, 254 




6^273 




Total 


79,640 









88It is now estimated at 200,000, of whom 20,000 are Japanese. 



262 



colo:n'ial tariff policies. 



The extent to whicli Germany i)articipated in the trade of Kiaochow 
in the years 1910-1913 is shown in Table 15: 

Table 15. — Trade of Kiaochow with Germany, 1910-1913. 
[In 1,000 Haikwan taels.] 
IMPORTS. 



Year. 


Total. 


From Chiaese 
ports. ^ 


From Germany. 


From other coun- 
tries. 


Value. 


Per cent 
of total. 


Value. 


Per cent 
of total. 


Value. 


Per cent 
of total. 


1910 


26,579 
26, 967 
31,331 
34, 756 


14,547 
13,596 
16, 624 
19,290 


54.9 
50.4 
53.1 
55.5 


4,570 
4,665 
2,843 

2,886 


17.2 
16.5 
9.1 
8.3 


7,462 

8,706 

11,864 

12,580 


27.9 


1911 


33.1 


1912 

1913. .. 


37.8 
36.2 







EXPORTS. 



Year. 


Total. 


To Chinese ports. 


To Germany. '"^ °^:^«'^- 


Value. 


Per cent 
of total. 


Value. 


Per cent ,.1,1^ 
of total. ^^^^®- 


Per cent 
of total. 


1910 . . 


17, 171 
19,854 
24,999 
25, 692 


9,614 
9,676 
15,847 
13,653 


56.0 
48.7 
63.4 
53.1 


1,307 
1,596 
1,880 
2,287 


7.6 
8.0 
7.5 
8.9 


6, 250 
8, 582 
7,272 
9,752 


36.4 


1911 


43.3 


1912 


29.1 


1913 


38.0 







THE CUSTOMS TARIFF. 



According to the agreement made between the Chinese and the 
German Governments on April 17, 1899, Tsingtao, the port of the 
colony, was to retain the characteristic privileges of a free port. 
But certain new arrangements were made in order to prevent smug- 
gling and to facilitate the payment of customs duties by the inhabi- 
tants of the protectorate. Goods in transit from the colony to the 
interior were not to be taxed until they crossed the border, and in 
the same way goods from the interior were not subject to export 
duties until they were shipped out of the colony. The European 
personnel of the customhouse in Tsingtao was to be composed of 
Germans, members of the Chinese maritime customs service, desig- 
nated to the Tsingtao port by the inspector general, and approved 
by the German muiister at Peking. 

This agreement was superseded by a later arrangement (Decem- 
ber 1, 1905), according to the terms of which the German colony 
voluntarily restricted its free port area 'to the immediate vicinity of 
the port, and the remainder of the territory was placed under the 
jurisdiction of the Chinese customs. In return the Chinese customs 
administration pledged itself to turn over to the Kiaochow govern- 
ment one-fifth of the net yield of the customs revenue collected by it 
in the leased Territory .^^ 

89 See also chapter VII on Japanese colonial tariffs, p. 447. 



GERMANY. 263 

The tariff rates in force were, therefore, those of the Chinese tariffi 
involving for most commodities, whether imports or exports, 5 per 
cent ad valorem with the possibility of commuting liMn charges for 
an additional 2i per cent. 

Commodities exempted from duty were: All articles for the arma- 
ment, equipment, and clothing of the German soldiers and marines, 
machines and tools, building materials and equipment for public 
buildings, parcel-post packages of less than $1 ('^Mexican") in 
value, and the personal baggage of travelers. All manufactured 
goods produced in the colony were to be dutiable at the rate at which 
the raw materials composing them would have been dutiable. The 
trade in opium and in arms, gunpowder, explosives, and similar 
materials was regulated by orders of the German Government. 
Exportation of arms and ammunition from German to Chinese terri- 
tory was permitted only upon special license. 

This ordinance marks a new departure in China, which affords great satisfaction 
both to China and to the protectorate: both parties are assured of an income, and that 
without burdening trade and industry in the customs area (of the colony). The 
inhabitants of the colony, it is true, do suffer to the extent to which they consume 
imported goods. For them the customs duty operates as a tax.*'' 

Bibliography. 

Barker, J. Ellis. The Value of the German Colonies. United Empire, New Series, 

Vol. VI, 1915. 
Bonn, Moritz J. Die Neugestaltung unserer Kolonialen Aufgaben. Tubingen, 1911. 
Bonn, Moritz J. German Colonial Policy. A paper read before the Royal Colonial 

Institute, Jan. 13, 1914. United Empire, New Series, Vol. V, 1914. 
Bouffard, Fernand. Le syst^me financier des colonies allemandes. Questions dip- 

lomatiques et coloniales, vols. 26 and 27, 1906 and 1907. 
Ch^radame, Andre. Le colonisation et les colonies allemandes. Paris, 1905. 
China. Maritime Customs. Returns of Trade and Trade Reports. Annual. 
Couget, Bertrand. Les colonies allemandes avant et pendant le guerre. Toulouse, 

1917. 
Dawson, William H. The Evolution of Modern Germany. London, 1908. 
Debidour, A. Histoire Diplomatique de I'Europe. Parti (1878-1904). Paris, 1916. 
Demay, Charles. Histoire de la colonisation allemande. Paris, 1889. 
Dernburg, Bernhard. Zielpunkte des Deutschen Kolonialwesens. Berlin, 1907. 
Deutsches Kolonial-Handbuch. 13th ed. Berlin, 1913. 
Deutsche Kolonialgesellschaft. Deutsche Kolonialzeitung. 1913. 
Deutsche Kolonialgesellschaft. Verhandlungen des Deutschen Kolonialkongresse. 

1910. 
Germany, Kolonialamt. Die Deutschen Schutzgebiete in Africa und der Siidsee. 

Amtliche Jahresberichte. Last issue, 1910-1911. 
Germany, Kolonialamt. Deutsches Kolonialblatt. 1890-1914. 
Germany, Reichsamt des Innern. Die Handelsvertrage des Deutschen Pveichs. Eine 

Zusammenstellung der Geltenden Handels-, Zoll-, Schiffahrts- und Konsularver- 

trage des Reichs. 1906. 
Germany, Reichsschatzamt. Haushaltsetat fiir die Schatzgebiete. 1913 und 1914. 
Germany, Statistischesamt. Statistisches Jahrbuch fiir das Deutsche Reich. 1915. 
Giordan!, Paolo. The German Colonial Empire, Its Beginning and Ending. Trans- 
lated by Mrs. Gustavus Hamilton. London, 1916. 
Griinfeld, E. Hafenkolonien und Kolonieahniiche Verbal tnisse in China, Japan, 

und Korea. Jena, 1913. 
Harris, John H. Dawn in Darkest Africa. New York, 1912. 

Johnston, Sir H. H. The German Colonies. Edinburgh Review, October, 1914. 
Kobner, Otto. Einfiihrung in die Kolonialpolitik. Jena, 1908. 
Kolonialblatt, Berlin, semi-monthly. 
Koloniale Rundschau. Monthly. Berlin, 1909-1915. 

80 Griinfeld, E.: Hafenkolonien und Kolonalahnliche Verhaltnisse in China, Japan, und Korea, Jena, 
1913. p. 80. The description of the tariff situation in Kiaochow has been taken largely from Oriinfeld's 
work. 



264 COLOiS^IAL TARIFF POLICIES. 

Kiilm. Hellmutli. Die Deutechen Schutzgebiete. Berlin. 1913. 
Lewin, (Percy) Evans. The Germans in Africa. London, 1914. 
Loeb, Isidore. The German Colonial Fiscal System. Publications of the American 

Economic Association. 3d Series, Vol. I, No. 3, 1900. 
Patzig, C. A. Deutsche Koionial-Unternehmungen und Postdampfer-Subventionen. 

Hanover, 1884. 
Radlauer, Ernst. Finanzielle Selbstverwaltung und Kommunalverwaltung der 

Schutzgebiete. Breslau, 1910. 
Raffalovitch, A. La politique coloniale allemande. Journal des Economistes. 

6th Series, No. 31. (A sumrnary of the article hj Bonn; see above.) 
Rathgen, Karl. DieZoUbegiinstigungdesHandelszwischenDeutschland und seinen 

Kolonien. Schmollers Jahrbuch fiir Gesetzgebung, vol. 35, Pt. I, 1911. 
Schneider, Dr. Karl (editor). Jahrbuch iiber die deutschen Kolonien, vols. 3-8. 

Essen, 1910-1915. Langen, E.: Koloniale Zoll-und Steuerpolitik in Samoa. 
Shepherd, William R. The German Colonies and Their Disposal. The Nation (N. Y.), 

vol. 106, No. 2725. Mar. 28, 1918. 
Statistik des Deutschen Reichs. Vol. 261B. Auswartiger Handel im Jahre 1912. 

Berlin, 1913. _ ■ 

Westphal, Alexandre. Les Origines de la Colonisation Allemande. Montpelier, 

1887. 
Zimmermann, Alfred. Geschichte der Deutschen Kolonialpolitik. Berlin, 1914. 
Zimmermann. Alfred. Kolonialpolitik. Leipzig, 1905. 
Zoepfl, G. Kolonieen und Kolonialpolitik. In Konrad's Handworterbuch der Staat- 

swissenschaften, vol. 5, 3d ed., 1910. 

TEXTS or TREATIES. 

See list given on page 834. 



Appendix to Chapter IV. 

PRESENT STATUS OF FORMER GERMAN COLONIES AND OF OTHER 
MANDATED TERRITORIES. 



CONTENTS. 



Cession of Oerman colonies and their distri- 

. bution 265 

Theory of the mandated territories 267 

Commercial importance of the mandated 

territories 269 

Table 16.— Area, population, and trade 269 

Tariffs of the mandated territories: 

Class A.— Mesopotamia, Syria, and Pales- 
tine- 
Restrictions embodied in treaties and 

mandates 270 

Tariff rates- 
Palestine 271 

Syria 271 

Mesopotamia 271 

Class B.— Tanganyika, Kamerun, and 
Togo- 
Restrictions embodied in treaties and 

mandates 272 

Tariff rates- 
Tanganyika 273 

French Kamerun 273 



Tariffs of the mandated territories— Con. 
Class B.— Tanganyika, Kamerun, and 
Togo — Continued, 
Tariff rates — Continued. 

British Kamerun (Cameroon s)... 273 

French Togo 274 

British Togo 274 

ClassC— South- West Africa, New Guinea, 
Western Samoa, Nauru, and the North 
Pacific Islands- 
Restrictions embodied in treaties and 

mandates 274 

Tariff rates 275 

"The South-West Africa Protec- 
torate" 275 

New Guinea 276 

TheTerritory of Western Samoa. 277 

North Pacific Islands 278 

Nauru 278 

Treatment of the products of mandated 
territories in the markets of the mandatory 
powers and elsewhere 278 



Cession of German Colonies and Their Distribution. 

The treaty of peace signed at Versailles June 28, 1919, transferred 
the title of all German^ overseas possessions to the Principal Allied 
and Associated Powers, but provided that their administration should 
be by or under the control of mandatories whose administration of 
the territories should be, in turn, supervised by the League of Nations. 
The provisions relative to mandates are contained in article 22 of the 
treaty and will be found on page 11, above. The other relevant arti- 
cles of the treaty are as follows : 

Article 118. In territory outside her European frontiers as fixed by the present 
treaty, Germany renounces all rights, titles, and privileges whatever in or over terri- 
tory which belonged to her or to her allies, and all rights, titles, and privileges, what- 
ever their origin, which she held as against the Allied and Associated Powers. 



1 The Turkish territories of Mesopotamia, Syria, and Palestine were similarly ceded by the treaty of 
Sevres to the Principal Allied Powers. This treaty has been ratified by none of the signatories, but the 
final settlement will probably be along the lines laid down therein, and the articles concerning these terri- 
tories are therefore relevant. 

Art. 132. Outside her frontiers as fixed by the present treaty Turiiey hereby renounces in favor of the 
Principal AlUed Powers all rights and title which she could claim on any ground over or concerning any 
territories outside Europe which are not otherwise disposed of by the present treaty. 

Tm'key undertakes to recognize and conform to the measures which may be taken now or in the future 
by the Principal AUied Powers, in agreement where necessary with third Powers, in order to carry the 
abovestipulation into effect. 

Art. 94. The High Contracting Parties agree that Syria and Mesopotamia shall, in accordance with the 
fourth paragraph of article 22, Part I (Covenant of the League of Nations), be provisionally recognized as 
independent States subject to the rendering of administrative advice and assistance by a mandatory until 
such time as they are able to stand alone. * * * 

Art. 95. The High Contracting Parties agree to intrust by application of the provisions of article 22 
the administration of Palestine, within such boundaries as may be determined by the Principal Allied 
Powers, to a mandatory to be selected by the said Powers. The mandatory will be responsible for putting 
into effect the declaration originally made on November 2, 1917, by the British Government, and adopted 
by the other Allied Powers, in favor of the establishment in Palestine of a national home for the Jewish 
people, it being clearly understood that nothing shall be done which may prejudice the ci-\al and religious 
rights of existing non-Jewish communities in Palestine, or the rights and political status enjoyed by Jev/s 
in any other country. * * * 

Art. 96, The terms of the mandates in respect of the above territories will be formulated by the Principal 
Allied Powers and submitted to the Council of the League ol Nations for approval. 



265 



266 COLONIAJL TAEIFF POLICIES. 

Germany undertakes immediately to recognize and to conform to the measure 
which may be taken now or in the future by the Principal Allied and Associated 
Powers, in agreement where necessary with third Powers, in order to carry the above 
stipulation into effect. 

In particular Germany declares her acceptance of the following articles relative to 
certain special subjects. 

Article 119. Germany renounces in favor of the Principal Allied and Associated 
Powers all her rights and titles over her oversea possessions. 

Article 125. Germany renounces all rights under the conventions and agreements 
with France of November 4, 1911, and September 28, 1912, relating to Equatorial 
Africa. She undertakes to pay to the French Government, in accordance with the 
estimate to be presented by that Government and approved by the Reparation Com- 
mission, all deposits, credits, advances, etc., effected by virtue of these instruments 
in favor of Germany. 

It should be noted that articles 118, 119, and 125 do not mention the 
League of Nations and that article 22 does not define the League's 
title to the territories with which it deals; and accordingly, it has 
been held that the League has no title to the territories whose adminis- 
tration it is to supervise.^ In fact the Supreme Council of the Allied 
and Associated Powers (Council of Four) made a tentative distribu- 
tion of the territory as early as May, 1919; but it should be clearly 
understood that without the formal approval of the United States 
this settlement remains tentative. The distribution was as follows: 

Togo and Kamerun. — France and Great Britain shall make a joint recommendation 
to the League of Nations as to their fate. 

German East Africa. — The mandate shall be held by Great Britain. 

German South- West Africa. — The mandate shall be held by the Union of South 
Africa. 

The German Samoan Islands. — The mandate shall be held by New Zealand. 

The other German Pacific possessions south of the Equator, excluding the German 
Samoan Islands and Nauru. — The mandate shall be held by Australia. 

Nauru (Pleasant Island). — The mandate shall be given to the British Empire. 
[The mandate as published is to Great Britain.] 

The German Pacific Islands north of the Equator. — The mandate shall be held by 
Japan.3 

The French Government (and apparently the British Government) 
interpret article 125 to mean that the 100,000 square miles of Equato- 
rial Africa which France ceded to Germany by the treaties named in 
the article reverts to France directly and again becomes a French 
colonial possession distinct from the adjacent territory held under 
mandate. 

Toward the end of August the Supreme Council expressed its 
''approval" of an arrangement arrived at between Great Britain and 

2 The German Government has protested against this interpretation, but it is the one which has been 
actually acted upon by the Powers and which has been accepted by the Council of the League of Nations. 
See their reply to the American note of Feb. 21, 1921, a reply whose text was published by the press on Mar. 
3, 1921. See also the report presented by the Belgian representative, M. Hymans, and adopted by the 
Council of the League of Nations, upon the obhgations falling upon the League of Nations under the terms 
of article 22 of the covenant (Official Journal of the League of Nations, Sept., 1920, pp. 334-341). 

M. Hymans reported as follows upon the allocation of the mandates and the legal title of the mandatories 
(p. 336): 

" There is one point on which there seems to be no divergence of opinion, namely, that the right to allocate 
the mandates— that is to say, to appoint the mandatory Powers and to determine the territories over which 
they shall exercise authority— belongs to the Principal Allied and Associated Powers. Article 22 of the 
covenant makes no provision regarding the authority which shall appoint the mandatories; but article 
119 of the treaty of Versailles transfers the sovereignty over the former German overseas possessions to 
the Principal Allied and Associated Pov/ers, and article 118 expressly stipulates that measures shall be 
taken by the Principal Allied and Associated Powers, in agreement, where necessary, with third Powers, 
in order to carry into effect the full consequences of the provision by which Germany renounces her rights 
outside Em-ope. These two articles of the treaty of Versailles can obviously serve as guides in the inter- 
pretation of the covenant, since they are strictly contemporary, have been drawn up by the same authors, 
and since the covenant forms part of the treaty of Versailles. The AUied Powers have adopted the same 
interpretation of article 22 of the covenant by inserting articles in the treaty of peace of St. Germain dated 
10th September, 1919, with Austria, and in the draft treaty with Turkey, which stipulate expressly that 
the right to appoint mandatory Powers shall belong to the Principal Allied Powers. There can be no 
question, moreover, as to the intentions of the authors of the covenant with regard to this question.'' 

3 In regard to the island of Yap the United States has entered protests. 



MANDATED TEKKITORIES. 267 

Belgium whereby the former handed over to the latter the regions of 
Ruanda and Urundi in (German) East Africa, and on August 26 
communications were read before the Belgian Senate in evidence of 
Great Britain's confirmation of this arrangement and stating that the 
Supreme Council of the League of Nations had given its approval.* 

Arrangements were made later for the division of Kamerun and of 
Togo between France and Great Britain. It was agreed that France 
is to administer about nine-tenths ^ of the area of Kamerun and about 
two-thirds^ of Togo. 

The treaty of Versailles contained further provisions directed to the 
elimination of German property and interest, both public and private, 
from these colonies (arts. 120-125). Germany pledged herself to 
observe the j)rovisions of the Brussels act relating to the trade in 
arms and spirits in Middle Africa (art. 126). And it was agreed that 
the native inhabitants of the former German oversea possessions 
should ^^be entitled to the diplomatic protection of the Governments 
exercising authority over those territories '^ (art. 127) . 

The status of the mandated territories remains undetermined 
(October, 1921) and the whole subject maybe regarded as still open. 
The Council of the League has formally approved the texts of the 
mandates for territories of Class C, but in respect to these at least 
three diplomatic questions are being debated — the status of Yap, 
the conflict over the Anglo-German-American treaty of 1899, ana 
the introduction of differential duties into the tariff of Western 
Samoa, and the reservations made by Japan respecting the treat- 
ment of her nationals in territories of Class C. The mandates of 
Classes A and B have been drafted and submitted to the Council of 
the League of Nations, but so far the Council has not transmitted 
them to the Assembly of the League of Nations.^ France has made 
reservations in regard to the application of Class B mandates to 
Kamerun and Togo, and the United States has entered protests 
calculated to prevent any discrimination against American interests 
in Classes A and B. In reading the following discussion relative 
to mandated territories, therefore, it must be borne in mind that 
the discussion deals with history in the making and that the drafted 
terms of the mandates and various actions already taken are liable 
to modification. 

Theory of the Mandated Territories. 

According to article 22 of the Covenant of the League of Nations, 
mandated territories belong to three classes which are now com- 

^ The division was made by the Orts-MUiier convention of May 30, 1919, but this has not been ratified 
by Belgium. (L'Afrique Frangaise, May, 1921). 

5 Nine-tenths of the whole, including the area claimed by the French as under their sovereignty. The 
British wiU hold the mandate over a strip less than 100 miles wide, following the Nigerian frontier and con- 
tinuous from the sea to Lake Chad, except in the neighborhood of the Benue River. The port of Duala and 
the railroads to the north and east and the trade route to Lake Chad via Bare, Bamum, Banyo, Laro, 
Garua, and Mora are in the French portion. The British portion includes the port of Victoria, Mount 
Kamerun (13,370 feet), and the German capital and health resort, Buea, upon the mountain. 

Togo is divided by a line roughly parallel to the eastern boundary and 60 to 80 miles from it. The 
French mandate extends east .of this line, including the whole of the coast, the two railroads inland from 
Lome, and the higher ground between the Mono and Oti Rivers, with Misahohe and Bismarckburg. The 
British receive both sides of the Oti River as far north as Yendi, whence the river becomes the boundary to 
beyond Kudani, and the line then runs to a point near the northwest corner of Togo. (The Times (Lon- 
don), Jan. 21, 1920; L'Afrique Fran§aise, Oct., 1921, translating from Cmd. 1350). See maps in the States- 
man's Year-Book, 1920. 

« For texts of the proposed mandates see British ParUamentary Papers, Misc. Ser. 1921, Nos. 3-7, 14, 
and 16 ; also The Times (London), Feb. 3 (Mesopotamia), Feb. 5 (Palestine), and Mar. 4, 1921 (Tangan- 
yika), and L'Afrique Frangaise, July (Togo), and Oct., 1921 (South-West Africa). 

185766°— 22 18 



268 COLONIAL XAEIFF POLICIES. 

manly distinguished as Classes A, B. and C. Article 22 "' indicates 
in a general way the territories which belong to the three classes. 
Class K includes ''certain communities formerly belonging to the 
Turkish Empire/'' and is distinguished by the fact that these peoples 
"have reached a stage of development where their existence as 
independent nations can be provisionally recogni^ied." This inde- 
pendent nationhood is recognized in draft mandates proposed for 
Syria and Mesopotamia, but not so clearly in that for Palestine. 
These three draft mandates provide for the establishment of consti- 
tutions and for local self-governmient. They provide for the abolition 
of all rights guaranteed to foreigners in the capitulations^ or old 
Turkish treaties. Especially they provide for the removal of all limi- 
tations upon the levying of customs duties and other taxes except 
that there shall be no discriminatory treatment of nationals of States 
which are members of the League of Nations and no discriminatory 
duties on imports from or exports to any State which is a member. 
Article 11 of the draft mandate for Mesopotamia reads as foUovrs: 

The mandatory must, see that there is no discrimination in Llesopotamia against 
the nationals of any State, member of the League of Nations (including corporations 
incorporated under the laws of such State), as compared with the nationals of the 
mandatory ot of any foreign State in matters concerning taxation, commerce or na\-i- 
gation, the exercise of industries or professions, or in the treatment of ships or air- 
craft s^. Similarly, there shall be no discrimination in Mesopotamia against goods 
originating in or designated for any of the said States, and there shall be freedom 
of transit under equitable conditions across the mandated area. 

Subject as aforesaid the Mesopotamian Government may on the ad\T.ce of the 
mandatory impose such taxes and customs duties as it may consider necessary and 
take such steps as it may think best to promote the development of the natural re- 
sources of the country and to safeguard the interests of the population. 

Nothing in this article shall prevent the Mesopotamian C-rovernment, on the advice 
of the mandatory, from concluding a special customs arrangement with any State 
the territor}^ of which in 1914 was wholly included in Asiatic Turkey or Arabia. 

This stipulation for the maintenance of the open door does not by 
its terms operate in favor of the United States, which is not a member 
of the League of Nations; it does not follow, however, that discrimina- 
tions against the United States are likely to be introduced; and if 
the same policy is followed in these mandated territories as has been 
hitherto followed in all similar cases in colonial administration,^ 
discriminations against the trade of the United States Vv^ill not be 
introduced. 

Class B of the mandated territories includes, according to article 
22 of the covenant, "especially" Central Africa; in fact,, it includes 
the former German territories of East Africa, Kamerun, and Togo, 
and nothing else.^° It is recognized that the mandatory must be 
responsible for the administration of these territories in a more 
direct way than for those of Class A, and in regard to Class B alone 
does the Covenant explicitly require the mandatory Power to ''secure 
equal opportunities for the trade and com^merce of the other mem- 
bers of the League.'' East Africa was already open-door territory 
under the guarantee of the act of Berlin, and in Togo and Kamerun 
the Germans had pledged themselves to give equal opportunities to 
British trade and in practice they had maintained the open door for all. 

7 The t^xt of article 22 is quoted on p. 11. 

8 The United States has made ••reservations" as to its capitulary rights. 

8a See revised drafts for Mesopotamia and Palestine, in British White Paper, Cmd. 1,500. The revision 
says " merchant vessels " and -'civil air craft." The Times (London), Aug. 30i 1921. 

9 See p. 27. 

10 And the French Government has made '-'reservations" concerning the application of mandates ofClasa 
B to Kamerun and Togo. (L'Afrique Fran^aise, Jan. 1921, p. 13.) 



MANDATED TERRITORIES. 



269 



Class C includes territories which '^ can be best administered 
* * * as integral portions" of the territory of the mandatory. 
South- West Africa and '^certain of the South Pacific Islands'' are 
mentioned as illustrations of such territories. In practice all the 
former German possessions in the Pacific are now governed under 
mandates which place the territories in this class. Though there 
remain outstanding certain diplomatic questions in regard to these 
territories and even the possibility that the whole subject will be 
reconsidered, the mandates were approved by the Council of the 
League of Nations on December 17, 1920. These mandates were 
drafted in consultation by the Powers which were tp assume the 
mandates of this class" and they are identical in their terms except 
for the differences in the names of the mandatory Powers and of the 
territories mandated. 

By the terms of these mandates, ^Hhe mandatory shall have full 
power of administration and legislation over the territory subject 
to the present mandate as an integral portion of the Empire of 
Japan [or of the Commonwealth of Australia, etc.] and may apply 
the laws of the Empire of Japan to the territory, subject to such 
local modifications as circumstances may require." 

Commercial Importance of the Mandated Territories. 

The boundaries have not all been precisely determined and exact 
figures can not be given for the areas and populations of the mandated 
territories. Approximate figures are given in Table 16. 

Table 16. — Area, population, and trade of the mandated territories. 



Territories. " 


Mandatory Power. 


Area in 
square 
miles. 


Population. 


Imports. 


Exports. 


Year. 


Class A: 

Mesopotamia (Irak) 

Palestine 


Great Britain 

do 


143,000 

9,000 

60,000 

365,000 
19,000 
6 106,000 
30,000 
21,200 
12,500 

322,000 

} 94,000 

960 
1,000 


12,849,000 

648,000 

3,000,000 

« 3, 500, 000 
^3,500,000 

I 2,540,000 
j> 1,032,000 

100,000 

540,000 

65,000 
41,000 


Millions 

2 59.7 

3 16.8 


9/ dollars. 

2 35.8 

33.1 


1919 
1919-20 


Syria 


France. 




Class B : 

Tanganyika . 


Great Britain 

Belgium 


5 5.6 


5 6.4 


1919-20 


Ruanda and Urundi 




Kamenm 


France 


/ 7 2.6 

2.7 

10 4.5 
10 2,0 

3.5 

101.2 


n.5 

8 1.1 

93.4 

10 6.7 

103.4 

3.7 
10 2.1 


1918 


Do 


Great Britain 

France 


1919 


Togo 




Do . 


Great Britain 

South Africa 


1919 


Class C: 

South- West Africa 


1919 


New Guinea 




Nauru 


Great Britain 


1919-20 


North Pacific Islands 


1913 


Western Samoa . 


New Zealand 


1919 






Total 


1,244,000 


17,815,000 


98.9 


67.2 











1 Census of 1920. 

2 Supplement to Commerce Reports, No. 62a, Nov. 26, 1920. Military supplies are excluded. 

3 Egyptian pounds converted at $4. Year ended Mar .31, 1921, imports £ E 5,217,000, exports, £ E 772,000. 

< Commerce Reports, July 21, 1921; "less than 4,000,000;" Statesman's Year-Book, 1921, "approxi- 
mately 314 milhon." The last German estimate of the population of German East Africa was 7,666,000, 
but the Belgian territory is one of the most thickly populated in Central Africa, and accounts for three 
or four million. 

5 lb. The East African Rupee has been stabilized at two shillings, but as the pound sterling is below par 
the 17,376,000 Rs. of imports and the 19,940,000 Rs. of exports have been converted at the old par rates. 
The trade of German East Africa in 1913 was $12,700,000 of imports and $8,500,000 of exports. 

6 This figure does not include thel07,000 square miles ceded by France to Germany in 1911 and reacquired 
by France according to the French interpretation of article 125 of the treaty of peace with Germany. 

^ Francs converted at par. 

8 Supplement to Commerce Reports, No. 70a, Dec. 20, 1920. 

9 Commerce Reports, Dec. 8, 1920. Francs converted at par. 

10 Statesman's Year-Book, 1921, converting poimds sterling at $4.00. 
11 The same is true of the mandates for Classes A and B, respectively. 



270 COLOXIAL lAEIFF POLICIES. 

The chief features of the resources and trade of the former German 
colonies have been mentioned above (p. 230). 

Mesopotamia, Syria, andPalestine are not tropical territories, as they 
lie between 30^ and 37° north. Only the deep, narrow valley of the 
Jordan, now uncultivated, would produce tropical vegetation. Else- 
where the country produces cereals, cattle and sheep, and subtropical 
fruit, as dates, figs, and olives. At present the chief exports of 
domestic production from Mesopotamia are dates and wool; but it 
has been and doubtless will again become a great grain-exporting 
country. It is also expected that Mesopotamia will contribute con- 
siderably to ^ the cotton supply of the world. Though the seasons 
and the irrigation problems are different from those of Egypt, Meso- 
potamia can eventually put a great acreage under cotton.^" But 
years must elapse before the irrigation systems are restored and 
completed and the labor supply sufficiently enlarged and tramed 
to make Mesopotamia a large factor in the cotton market. Its trade 
in 1919 was largely a transit trade, and practically one-half of its 
total exports consisted of cotton goods reexported to Persia. Large 
quantities of sugar and tea followed the same route, while the second 
item of exportation in the direction of Europe was carpets, most of 
which were of Persian origin. The extent of the trade with Persia 
in 1919 wa-s due to temporary conditions, but there will continue to 
be a considerable market in Mesopotamia for the cheaper cottons, 
sugar, tobacco, and the long list of manufactures which make up the 
import trade of nonmanufacturing countries. The oil resources of 
Mesopotamia have been much discussed, and drills and pumps, as 
well as agricultural machinery, are likely to attain prominence among 
the imports. 

Tariffs of the ^L^xdated Tereitories. 

class a.— mesopotamel. syria, axd palestixe. ^^ 

RESTPJCTIOXS EMBODIED IX TREATIES AXD MAXDATES. 

Mesopotamia, Syria, and Palestine, while they were part of the 
Tm^kish Empire, were subject to treaties (the capitulations) which 
effectively guaranteed the open door to the treaty powers and which 
restricted the amount of the customs duties leviable. The mandates 
drafted for these territories (but not yet approved by the League of 
Xations) provide explicitly that the obligations of these capitulations 
shall no longer apply to these territories; that is, the approval of 
these draft mandates would, in so far as approval by an organ of the 
League of Nations would have that effect, deprive the L'nited States 
of its rights under the capitulations and leave it without guaranties 
of equal treatment for its commerce. The L^nited States has entered 
a protest, and the matter remains unsettled. No guaranty of com- 
mercial equahty has been substituted for those contained in the 
capitulations. The Covenant of the League of Nations does not 
explicitly require the maintenance of the open door in mandates of 

12 It has been put as high as 1,000,000 acres (cf. Egypt's 1,700,000), but the estimate of the Indian Agri- 
cultural Ser^-ice is only 150,000 to 200,000 acres. (Commerce Reports, Jan. 8, 1921. Cf. The Economist, 
Sept. IS, 1920, n. 432.:) 

13 The framers of the treaty of Versailles contemplated that Armenia would be a territory held under 
mandate. But when it appeared that no country wished to accept a mandate for Armenia, Armenia 
was recognized as an independent country by the treaty of Sevres, of which it was a signatory. 



MANDATED TERRITORIES. 271 

Class A. And while the terms of the mandates drafted by France 
and Great Britain and presented to the Council of the League of 
Nations for approval (which has not yet been given) contain certain 
provisions for commercial equality, the provisions do not prevent 
discriminations against the trade of countries which are not members 
of the League of Nations. Further, the draft mandates specifically 
provide for the levying of customs duties without limitation of rates, 
as contrasted with the previous maximum of 11 per cent. This 
change permits the imposition of higher rates on products, such as 
oil and tobacco, in which the United States is especially interested, 
and- thus permits discriminations to be effected by the selection of 
certain articles for unduly onerous rates. This matter also now con- 
stitutes the subject of diplomatic exchanges. 

TARIFF RATES. 

Palestine. — In 1914 the maximum rate — 11 per cent ad valorem — 
was levied upon practically all imports into the Turkish Empire, but 
imports from Egypt, at that time technically a part of that Empire, 
paid only 8 per cent. The British military administration by an order 
of February 27, 1918, continued the Turkish system of taxation, 
including the 11 per cent customs duty and the special rate of 8 per 
cent for imports from Egypt. These rates remain effective, with a 
few exceptions. Certain building materials have been made dutiable 
at only 3 per cent for a period of two years from August 31, 1920. 
Restrictions upon the production and sale of tobacco have been 
abolished, and a surtax of 10 per cent has been imposed. The 
importation of arms and ammunition, salt, hashish, and German 
aniline dyes have been prohibited. ^^ 

Syria. — No changes appear to have been made in the customs 
system of Syria. It may be noted that the value used in the assess- 
ment of the ad valorem duties is the local sale value and not the 
value at the point of shipment. A commission has been established 
composed of merchants and of customs officials in equal numbers 
to fix official valuations for the principal articles of importation, and 
these valuations may be revised monthly. 

In addition to the customs duty, consumption duties and octrois 
are levied. The consumption duty falls upon tea, coffee, sugar, and 
petroleum. The octroi was formerly levied upon entrance into a mu- 
nicipality, but since April 1, 1921, the various and sometimes cumu- 
lative octrois levied by the cities have been replaced by a single and 
uniform duty at the ports/-^ i. e., by what the French call an octroi 
de mer. The rate of this duty is 2 per cent ad valorem upon alcohols 
and oils used for heating or lighting and upon wines and spirits, and 
1 per cent upon all other dutiable imports. 

Mesopotamia. — The provisional military government of Mesopo- 
tamia collected duties at the rate of 10 per cent ad valorem until 
April 1, 1919, when the rate of 11 per cent went into effect.^® 

The present tariff of Mesopotamia, effective since April 1, 1921, 
levies 15 per cent ad valorem upon all articles not otherwise specified, 

1^ The Times Trade Supplement, Dec. 18, 1920. 

15 The revenue collected is distributed among the municipalities. (Official Gazette of the Government 
of Palestine, Apr. 15, 1921.) For monopolies and prohibitions in Syria, see B. T. J., July 14, 1921. By 
decree of May 15 the exportation of cereals, farm animals, and building materials was prohibited. 

18 Proclamation of the commander general, Mar. 14, 1919. (Bagdad Times, Mar. 28, 1919.) 



272 coLoisriAL tariff policies. 

but 11 per cent continues to be the rate on dutiable machinery, 
groceries ^^^ (including flour, spices, salt, and sugar), tallow, tar, and 
building materials, and upon all unmanufactured articles. There 
are a few specific rates and upon a few items other rates are collected, 
e. g., 20 per cent on fish and fish oil. The short free list includes 
agricultural machinery, dairy produce of Persia^ and fresh fruit and 
vegetables grown in Persia and imported by river craft. The rate on 
skins of wild animals — of local origin — from the direction of Koweit 
is only 2^ per cent. Wines and spirits made elsewhere than in the 
British Empire or in allied countries are not permitted to enter.^^ 

CLASS B.— TANGANYIKA, KAMERUN, AND TOGO. 

RESTRICTIONS EMBODIED IN TREATIES -AND MANDATES, 

The mandated territories of Class B have been and continue to be 
open-door regions. The territory which w^as formerly German East 
Africa ^^ and which is now called Tanganyika (British mandate) and 
Euanda and Urundi (Belgian mandate) continues to be subject to 
the provisions of the general act of the conference of Berlin, 1885. 
This act was revised in 1919 (see p. 120), but that revision (which has 
not yet been ratified) maintains the obligation to grant commercial 
equality, but only in favor of the signatory and adhering powers. 
The Covenant of the League oi Nations, therefore, in prescribing the 
maintenance in this territory and in favor of the members of the 
League of Nations, of a regime of commercial equality, imposes an 
obligation which differs only as the membership of the League of 
Nations may be different from that of the '' signatory powers and of 
States, members of the League of Nations, which may adhere" to 
the revised Berlin act. The Berlin act and its amendments limited 
import duties, except upon liquor and arms, to 10 per cent ad valorem. 
This restriction will be removed if and when the revision of 1919. 
now ratified only by France, has been generally ratified. 

In Kamerun and Togo the open door has been maintained from the 
time when the territories were first acquired by Germany. Part 
of Kamerun was included within the Conventional Basin of the Congo 
and is therefore subject to the provisions of the Berlin act. For the 
remainder of Kamerun and for Togo equal treatment of British and 
German commerce had been pledged by an exchange of declarations 
with Great Britain in 1885 (see p, 240). Although these pledges 
related only to British commerce, discriminations were not in fact 
made against the commerce of other countries. As respects these 
territories, therefore, the Covenant of the League af Nations imposes 
a wider obligation in regard to the open door than that assumed by 
Germany by the declaration of 1885, but on the other hand the 
Covenant omits from the guaranty of the enjoyment of commercial 
equality nonmembers of the League, and hence is narrower than the 
policy carried out by Germany. 

16a On Sept. 5, 1921, the rate on sugar, tea, cofl'ee, fruits, vegetables, and groceries was raised to 15 
per cent, and increases were made on manufactured tobacco, matches, and playing caras. The importa- 
tion of unmanufactured tobacco was prohibited. 

17 Commerce Reports, June 2, 1920. Presumably this is a temporary regulation: it is obvlotisly incon- 
sistent with the terms of the draft mandate. 

18 A small triangle of territory in the southeast corner, claimed as Portuguese in 1891, but occupied by 
Germany, was placed under Portuguese sovereignty. (Manchester Guardian, Sept. 26, 1919.) 



MANDATED TERRITORIES. 273 

TARIFF RATES. 

Tanganyika. — From October, 1916, the military government en- 
forced a tariff somxcwhat simpler than that of the old German ad- 
ministration, with the prevailing rate of 10 per cent ad valorem ^^ 
levied upon both imports and exports. The tariff of August 9, 1921, 
ignores the Treaty of Berlin and imposes im.port duties many of 
which are higher than 10 per cent ad valorem. The rates of import 
duty are almost identical with those of Kenya, described on page 371. 
The export schedule restores the exemption of plantation products, 
imposes specific rates on animals, 30 per cent ad valorem on ivory, 
10 per cent on hides, and the same or smaller rates on other items/^^ 

French Kamerun. — vShortly after the capture of Kamerun by the 
Allied forces this territory was divided for administrative purposes 
between the French and British by a provisional line, which was 
approximately the same as the boundary now dividing the mandated 
territories.^^ In both parts of the territory the German customs 
regulations and rates were continued. In the French portion of the 
territory they remained in force until the decree of August 7, 1920, 
extended to this territory the tariff of French Equatorial Africa. 
This tariff ,2^ which was established subject to the limitations of the 
Berlin act and its amendments, has no rates (except on liquors and 
arms) exceeding 10 per cent ad valorem. Changes in the tariff of 
Equatorial Africa are likewise applicable to French Kamerun. 

British Kamerun (Cameroons). — In the Kamerun territory held 
under mandate by Great Britain the German import tariff has been 
slightly modified in 1919 and 1920. The rate on iron articles con- 
tinues to be 20 per cent ad valorem; ^^ that on textiles, 15 per cent; 
and that on unenumerated articles, 10 per cent. Alcoholic bever- 
ages, arms and ammunition, rice, dried fish, salt, and unmanufac- 
tured tobacco are duitable at specific rates, some of which have 
been modified. The duties on alcoholic beverages and tobacco have 
been increased, that on salt has been reduced, and the rates are now 
expressed in shillings or pence per pound rather than in marks per 
kilo. Except for the change of units the export schedule remains 
unmodified, and the free list continues to include machinery, vehicles, 

19 Alcoholic liquors were subject to higher specific rates. The export duty on ivory was 15 per cent. 
There were also free lists, that for imports including many classes of goods to promote the development 
of the country. The chief changes as coihpared to the German tariff system were that the exportation 
of plantation products was no longer free and that exports, except ivory, were all dutiable at the same 
rate. 

19 a B. T. J., Oct. 13, 1921, p. 380. 

20 According to the Simon-Milner Convention of July, 1919. 

21 Decree of Oct. 11, 1912, and amendments; see p. 221. 

22 Section 33 of the customs ordinance reads as follows: 

"The value of goods returned in customs declarations and in the case of clearance of articles dutiable 
ad valorem is to be based upon the actual value of the article in the port of exitry or esxport in the Pro- 
tectorate at the time of importation or exportation. 

"On importation, the value is, as a general rule, held to be the price invoiced to the consignee in the 
Protectorate by the seller abroad (invoice price), plus the transport charges to the port of entry (freight, 
unloading and insurance expenses) with an additional 5 per cent on the invoice f. o. b. in the port of sMp- 
ment. 

"Failing production of the invoice or if the value obtained by the calculation indicated in the second 
paragraph does not clearly correspond to the actual value (fii-st paragraph), the market price in the port 
of entry minus the import duties is to be taken as a basis. 

"On exportation the current market price of the day in the port of export is to be taken as a basis of 
the value." 



274 COLONIAL TARIFF POLICIES. 

building materials, scientific instruments, fuel and ice, books and 
other articles. 2* The importation of trade spirits and stills is pro- 
hibited.25 

French Togo. — The tariff of French Equatorial Africa (see above, 
French Kamerun) was also made applicable to the French portion 
of Togo. 

British Togo. — This territory has no coast line, and no railroads 
cross its frontiers; not unnaturally the tariff of the Gold Coast has 
been proclaimed (B. T. J,, Sept. 22, 1921) in accord with the pro- 
visions of Class B mandates, permitting customs unions with neigh- 
boring colonies. 

CLASS C. SOUTH-WEST AFRICA, NEW GUINEA, WESTERN SAMOA, 



RESTRICTIONS ESIBODIED IN TREATIES AND MANDATES. 

Although the Covenant of the League of Nations declares ^Hhe 
principle that the well-being and development" of the inhabitants of 
these territories '^form a sacred trust of civilization,'' neither the 
Covenant nor the mandates for territories of Class C explicitly impose 
any restrictions upon the general commercial policy to be pursued 
therein. The only restrictions are the prohibitions upon the slave 
trade and the importation of firearms and of intoxicating liquors. 

While these territories were administered by Germany there were 
no tariff discriminations against foreign countries. Discriminations 
against American and British commerce in Western Samoa would 
have been contrary to the treaty of 1899 (see p. 241) and discrimina- 
tions against British commerce in the other Pacific Islands would 
have been contrary to the declarations exchanged with Great 
Britain in 1886 (see p. 240). The present lack of restrictions upon 
the mandatory Power may be seen from the text of the mandate 
and from the statement of Prime Minister Hughes of Australia. 
Mr. Hughes said: 

As to immigration, trade and commerce, and shipping, the Parliament will have 
the same unfettered discretion as it has on the mainland of Australia. In regard 
to shipping alone, and the trade it carries, this means that Australia will be able to 
secure for itself, not only the trade in regard to commodities taken to and brought 
from these islands, but also the control of the shipping that conveys them.^^ 

The text of the mandate for South- West Africa is as follows, and 
those for the other territories of Class C are ^ the same, except for 
the designation of the territory and of the mandatory Power: 

The Council of the League of Nations: 

Whereas by article 119 of the treaty of peace with Germany signed at A'ersailles 
on the 28th June, 1919, Germany renounced in favor of the Principal Allied and Asso- 
ciated Powers all her rights over her overseas possessions, including therein German 
South- West Africa; and 

Whereas the Principal Allied and Associated Powers agreed that, in accordance 
with article 22, Part I (Covenant of the League of Nations), of the said treaty, a man- 
date should be conferred upon His Britannic Majesty, to be exercised on his behalf 
by the Government of the Union of South Africa, to administer the territory afore- 
mentioned, and have proposed that the mandate should be formulated in the follow- 
ing terms ; and 

Whereas His Britannic Majesty, for and on behalf of the Government of the Union 
of South Africa, has agreed to accept the mandate in respect of the said territory and 

24 Proclamation No. 20 of the governor of Nigeria, 1919, B. I. d. D., 4tli supplement to No. 115 («!! edition). 

25 Board of Trade Journal, Sept. 2, 1920, p. 289. 

»6 The Times Trade Supplement, Nov. 27, 1920, p. 250. 



MANDATED TERRITORIES. 275 

has undertaken to exercise it on behalf of the League of Nations in accordance with 
the following provisions; and 

Whereas, by the aforementioned article 22, paragraph 8, it is provided that the degree 
of authority, control or administration to be exercised by the mandatory, not having 
been previously agreed upon by the members of the League, shall be explicitly de- 
fined by the Council of the League of Nations. 

Confirming the said mandate, defines its terms as follows: 

L The territory over which a mandate is_ conferred upon His Britannic Majesty 
for and on behalf of the Government of the Lnion of South Africa (hereinafter called 
the mandatory) comprises the territory which formerly constituted the German Pro- 
tectorate of South- West Africa. 

II. The mandatory shall have full power of administration and legislation over 
the territory subject to the present mandate as an integral portion of the LTnion of 
South Africa, and may apply the laws of the LTnion of South Africa to the territory, 
subject to such local modifications as circumstances may require. 

The mandatory shall promote to the utmost the material and moral well-being and 
the social progress of the inhabitants of the territory subject to the present mandate. 

III. The mandatory shall see that the slave trade is prohibited and that no forced 
labor is permitted, except for essential public w^orks and services, and then only for 
adequate remuneration. The mandatory shall also see that the traffic in arms and 
ammunition is controlled in accordance with principles analogous to those laid down 
in the convention relating to the control of the arms traffic, signed on September 
10, 1919, or in any convention amending same. The supply of intoxicating spirits 
and beverages to the natives shall be j^rohibited. 

IV. The military training of the natives, otherwise than for purposes of internal 
police and the local defense of the territory, shall be prohibited.. Furthermore, no 
military or naval bases shall be established or fortifications erected in the territory. 

V. Subject to the provisions of any local law for the maintenance of public order 
and public morals, the mandatory shall insure in the territory freedom of conscience 
and the free exercise of all forms of worship, and shall allow all missionaries, nationals 
of any state member of the League of Nations, to enter into, travel and reside in the 
territory for the purpose of prosecuting their calling. 

VI. The mandatory shall make to the Council of the League of Nations an annual 
report to the satisfaction of the Council, containing the measures taken to carry out 
the obligations assumed under the foregoing articles. 

VII. The consent of the Council of the League of Nations is required for any modi- 
fication of the terms of the present mandate. The mandatory agrees that if any dis- 
pute whatever should arise between the mandatory and another member ,of the League 
of Nations relating to the interpretation or the application of the provisions of the 
mandate such dispute, if it can not be settled by negotiation, shall be submitted to 
the Permanent Court of International Justice, provided for by article 14 of the cove- 
nant of the League of Nations. 

The Japanese Government was not satisfied with a mandate in 
these terms which permitted the exclusion of its nationals from the 
mandated territories, and made the following declaration: 

From the fundamental spirit of the League of Nations and as the question of inter- 
pretation of the covenant, His Imperial Japanese Majesty's Government has a firm 
conviction in the justice of the claim they have hitherto made for the inclusion of a 
clause concerning the assurance of equal opportunities for trade and commerce in 
"C " mandates. But from the spirit of conciliation and cooperation and their reluct- 
ance to see the question unsettled any longer they have decided to agree to the issue of 
the mandate in its present form. That decision, however, should not be considered 
as an acquiescence on the part of His Imperial Japanese Majesty's Government in 
the submission of Japanese subjects to a discriminatory and disadvantageous treat- 
ment in the mandated territories, nor have they thereby discarded their claim that 
the rights and interests enjoyed by Japanese subjects in these territories in the past 
should be fully respected. 

TARIFF RATES. 

^^ Tlie South-West Africa Protectorate J ^ — By a proclamation of 
July 15, 1915, of the Union of South Africa, ^'The South-West 
Africa Protectorate," formerly German Southwest Africa, was 
assimilated for customs purposes to the Union of South Africa, and the 
tariff laws of the Union of South Africa were applied to the Pro- 



276 COLOXIAL TAEIFF POLICIES. 

tectorate. Subsequent amendments of the Union of --South Africa 
tariff have been also apphed to South-¥7est Africa.-"^ There is, 
therefore, _ free trade between the Protectorate and the Union of 
South Africa, and the provisions in force in the Union for preference 
to British imports are likewise effective in the Protectorate. 

New Guinea. — The mandate for the former German colony of 
New Guinea, excluding Nauru and the islands north of the Equator, 
was conferred upon His Britannic Majesty to be exercised on his 
behalf by the Governrnent of the Commonwealth of Australia. A 
bill providing for the civil administration of this group became law 
(Statute No. 25) on September 30, 1920, but up to May 9, 1921, the 
islands were _ governed by an Australian military administration 
which proclaimed new tariffs intended for revenue purposes only 
and containing no preferential features. 

It may be noted, however, that the majority of the (Australian) 
Eoyal Commission on the Late German New Guinea has reported 
in favor of preferential duties on goods imported into New Guinea 
in Australian ships, and on products of New Guinea imported into 
xlustralia.^^ 

While the tariff of New Guinea as yet contains no discriminatory 
features, by other means the trade of the country has been reserved 
to Australian interests. Copra is practically the only export, and an 

27 E. g., South-West Africa Protectorate, Proclamation No. 6 of 1917. "The effect of the above-men- 
tioned proclamation is that the customs and excise duties and regulations at t) resent in ooeration in the 
L^nion of South Africa are now operative throughout the Protectorate of South-West Africa." (Board of 
Trade Journal, May 2, 191S, p. 553.) 

28 Interim and Final Reports of Roval Commission on Late German New Guinea, Australian Parlia- 
mentary Papers, 1920, No. 29, F. ISS^pp. 47-48: 

In prescribing the trade relations of the territory for the future, regard must be had to all interests con- 
cerned; not only must tlie direct material benefit of the mandated territory be considered, but one must 
take into account also the rights of Austraha and the Empire. 

The purely territorj^ point of view is clearlj- set cut in the letter from the administrator, quoted in ex- 
tenso in our chairman's separate report. Briefly stated, what Gen. Johnston desires is direct communica- 
tion with the_East and with Europe, so that supplies may be obtained and produce exported v.ithout 
using Australia in either case as an intermediary. The German merchants have made requests to the 
same effect. If this view is adopted, Austraha will be practically cut out, and her trade will be limited 
to occasional consignments of meat, biscuits, and flour, while the ships which carried those cargoes would 
return empty. All the business would be done by subsidized vessels with colored crews belonging to 
Japan and Holland, and perhaps occasional ships, also run on cheap conditions, from England or America. 

Your commissioners do not consider that such a state of things would be regarded ^^^th complacence by 
the Austrahan people. They ha^-e already stated the view that Australia did not undertake naval and 
military operations against German New Guinea for the sake of gain, nor did the prime minister put for- 
ward such strenuous efforts at the Peace Conference to secure the mandate over this territory for Aus- 
traha merely for the purpose of obtaining commercial advantages, but it would be intolerable if, after all 
that has been done and suiTered by Austraha, its citizens were to be asked to stand by, to accept all the 
troubles and dififtculties attendant on theinternational obligations regarding the government of the country, 
to incur heavy financial responsibihties, to risk possible losses, and to see the profits of trade going into 
alien hands. 

The navigation act makes trade between the mandated territory and Austraha subject to conditions 
as to manning of ships, pay, and accommodation of crews, etc., that win preclude foreign competition as 
between Austraha and the mandated territory, but it does not affect the position of sliips making Rabaul 
a port of call, provided they do not carry passengers and cargo between the territory and Austraha. 

It is necessary, therefore, to consider what courses are onen so as to secure that Austraha is not only 
able to obtain some, at any rate, of the trade advantages that will be derivable fi-om this potentially rich 
territory, but is also in a position to maintain thoseintimate trade relations which are desirable in order 
that the territory may not become an isolated commmiity looking to the outside world both as the market 
for its goods and its s'ource of supphes, and so drift out of touch with the Austrahan people. 

Your commissioners have considered three courses — complete reservation of aU trade to Austraha, res- 
ervation to British (including Austrahan) ships only, and unrestricted trade. Each of these, if adopted 
exclusively, will lead to difficulties. They, therefore, invite attention to the suggestion vrhich they be- 
heve offers a fair solution. They advise that a system of differential duties be estabhshed, the import and 
export duties to remain practicaUy as at preseiit (subject to the changes recommended in Chapter III) 
in regard to all goods imported from or exported to Australia in Australian-owned ships, that higher rates, 
fixed at a prescribed percentage on those existing, be charged when the goods are carried in British ships 
other than Austrahan-owned and still higher wlien goods are carried in foreign-owned vessels. 

* * * * * * * 

As the Australian tariff now stands, goods imported from Papua and the m^andated territory are sub- 
ject to the same duties as goods imported from foreign countries. 

It is miderstood that the Government have had under consideration a proposal to remit a portion of the 
_duties on produce of Papuan origin. Your commissioners commend that proposal, and assume that such 
•concessions as are granted to Papuan settlers will be extended to settlers in the mandated territory. 



MANDATED TERRITORIES. 277 

embargo has preyented shipment except to Australia. Foreign ves- 
sels are thus effectually prevented from taking on outward cargoes 
and therefore from, competing in either the inward or outward trade, ^^ 
and the extension to the trade between Australia and New Guinea of 
the Australian navigation laws, part of which has recently become 
effective, will prevent most non-British ships from carrying freight 
or passengers between these points. 

There is also a subsidy of £40,000 annually paid to Burns, Philp 8l 
Co. for carrying the mails to New Guinea, New Hebrides, and Nor- 
folk Islands.^^ 

The Australian Government has also made an agreement with the 
Anglo-Persian Oil Co. (in which the British Government is heavily 
interested) by which the latter acquires a monopoly of the oil produced 
in Australia and its dependencies.^^ 

Tlie Territory of Western Samoa. — In 1919 New Zealand received a 
mandate over former German Samoa, and, renaming the group of 
islands the territory of Western Samoa, placed them under the 
ministry of external affairs of the Dominion. 

After the occupation of Western Samoa by the forces of New 
Zealand, the existing import duties were maintained and export 
duties were added in accordance with a decision made by the local 
German authorities shortly before the outbreak of the war. 

By an order in council of April 20, 1920, a radical revision of the 
import tariff of the Territory was promulgated. Under the new 
schedule tobaccos are dutiable at specific rates without differentials, 
and there is a very small free list, including household effects; drugs 
and chemicals; printed literature, including music; religious and 
educational goods; and a few other items. All other articles are 
made dutiable at 15 per cent ad valorem ^^ if produced within the 
British Empire, ^^ or at 22J per cent ad valorem if produced elsewhere. 
Export duties are levied at the rate of £ 1 a ton on copra and £2 a ton 
on cocoa and at equivalent rates on extracts or preparations of these 
products. Firearms, explosives, and goods produced ^^ in Germany 
or Austria may be imported only as licensed by the minister of 
customs. 

According to the convention of 1899 between the United States, 
Great Britain, and Germany disposing of the Samoan group, each of 
these nations Vfas to enjoy equal privileges with respect to commerce 
and shipping in the ports of the islands.^^ American rights under 
this treaty were plainly unaffected by the defeat of Germany, and the 
violation of the treaty by the differential tariff imposed by the admin- 
istration of New Zealand now forms the subject of diplomatic corre- 
spondence. 

>9 See the minority report of the Royal Commission previously cited, p. 70. 

80 Stead's (magazine), Nov. 13, 1920. Further, the property of Germans is being expropriated and appar- 
ently none but Atetralians are being permitted to acquire it. 

31 For the conditions and qualifications, see Board of Trade Journal, Sept. 16, 1920, p. 352. Perhaps, tech- 
nically, the oil of the mandated territory is not included in the monopoly. 

32 The rate was previously 12^ per cent. 

33 The British Empire includes protectorates, and goods produced in the British Empire include those 
whose final process ofmanufactvire takes place in the Empire and one-fourth of whose value is contributed 
by materials produced or labor applied within the Empire. The regulations in these respects are the 
same as those found in New Zealand. 

3* " Goods shall be deemed to have been manufactured or produced in Germany or Austria if as much 
as 5 per centum of the value thereof as estimated in accordance with the provisions of the customs act, 
1913, with respect to goods subject to ad valorem duty, has its source in Germany or Austria." (The Laws 
of the Territory of Western Samoa. The Samoa Customs Order, 1920, sec. 19, par. 5, p. 66.) 

»5 See chapter on the Colonial Tariff Policy of the United States, pp. 577 and 615. • 



278 coLo:^iAL tariff policies. 

North Pacific Islands. — The Japanese administration levies 10 per 
cent ad valorem on all imports, except that rice, fresh vegetables, 
sugar, kerosene, and building materials are exempt, and except that 
the duties on tobacco and liquors are specific. Export duties are 
levied upon copra and phosphates at the rate of 8 yen per ton. 

Nauru. — Nauru is so small in area and population that in the nature 
of the case it can have no trade except in connection with the activi- 
ties of the company which exploits its phosphate deposits. The 
absence of information in regard to its tariff is therefore unimportant, 
since the concessionary company which formerly worked the deposits 
has been expropriated by the political and financial cooperation of 
the Governments of Great Britain, Australia, and New Zealand. 
These three Governments have agreed — though the agreement is 
subject to the official approval of the League of Nations — to divide 
in fixed proportions the annual output, and to sell it at cost in the 
home markets. This action is defended on the ground that it has to 
do only with private property and that the resulting monopoly of 
the resources of Nauru is purely incidental. 

Treatment of Products of Mandated Territories in the 
Markets of the ^Mandatory Powers and Elsewhere. 

Products of the mandated territories have as yet received no special 
tariff favors in the territories of the mandatory powers, except that 
since South- West Africa has been included in the South xlfrican 
Customs Union its products enjoy free entry into that Union. ^^^ 

The differential export duty upon raw hides and skins shipped 
from India for tanning within the British Empire is applicable also 
to those destined for territories '4n respect to which a mandate of 
the League of Nations is exercised by the government of any mem- 
ber of His Majesty's dominions." ^^ 

The British preferential tariff rates may, in accordance with the 
law under which they were established, be extended by order in 
council to products of British mandated territories, but such an 
order has not been issued. The South-West Africa Protectorate, 
however, and possibly certain islands in the Pacific, by virtue of 
their administration as integral portions of the territory of British 
Dominion, already share the advantages of the British preferential 
tariff.^^ It may be recalled also that the Australian Royal Com- 
mission on the Late German New Guinea recommended preferential 
treatment for products of the mandated territory entering Australia. 

35a And except that, as reported "by L'AMque Frangaise, December, 1921, p. 43G, products of Togo and 
Kamerun, if imported directly, are subject to the French minimum, tariff rates, 1. e., these mandated 
territories are treated as nonassimilated colonies. 

36 Commerce Reports, Mav 19, 1920, p. 1010. 

37 See p. 821. 



Chapter V. 

COLONIAL TARIFF POLICY OF GREAT BRITAIN IN THE 
CROWN COLONIES. 



CONTENTS. 



I. Introduction: 

The British Empire 280 

Area, population, and classification — 

Table 1.— Area and population, 

1914 282 

II . (} overiiment and making of tarifls 284 

III. Tariff policy and system: 

Tariff policy of Great Britain 287 

Treaties and British colonial tariffs- 
Multilateral treaties 288 

Open-door treaties , 288 

General commercial treaties 289 

Colonial tariff" treaties 290 

Summary 291 

Tariff policy in the Crown colonies 292 

Tariff systems of the Crown colonies ..... 293 

IV. Tariffs of the Crown colonies; general 

description, by groups: 
Group 1.— Free ports, which levy no 
duties except on liquors and tobacco- 
Gibraltar, Aden, Hongkong, Weihai- 
wei. Straits Settlements- 
Situation, area, population, and trade. 293 
Table 2.— Area, population, and 

trade 294 

Table 3.— Shipping entered at the 

free ports, 1913 294 

Duties on liquor and tobacco only ... 295 
Group 2.— Colonies which impose duties 
on Uquor and tobacco, a few other im- 
port and export duties— Malay States 
and Sarawak, St. Helena, Falkland 
Islands, and Gilbert and Ellice Is- 
lands- 
Situation, area, population, and 

trade 295 

Table 4.— Trade of the Federated 
Malay States with the United 

States 296 

Table 5.— Area and population of 

colonies in group 2 296 

Table 6.— Imports and exports of 
colonies in group 2, 1913 and 

1918-19 ...'.. 296 

Tariffs- 
Specific import duties and export 

duties 297 

Exceptions and details 297 

Preferential rates. 298 

Group 3.— Colonies which impose a uni- 
form ad valorem import duty, with 
treaty restrictions in some cases, and 
various export duties— Egypt, Sudan, 
Somaliland, Kenya and U ganda, Zan- 
zibar, Nyasaland, and Bahrein Is- 
lands 298 

Table 7.— Area and population of 

the colonies in group 3 300 

Table 8.— Imports and exports of 
the colonies in group 3, 1913 and 

1918 300 

Table 9.— Trade of Egypt in 

selected years.. 301 

Table 10.— Chief imports of Egypt, 

1919 302 

Table 11.— Chief exports of Egypt, 

1919 302 

Table 12.— Distribution of the 

trade of Egypt, 1919 and 1920 . . 303 
Table 13. — Exports of EgTrptian 
cotton, 1912-1919 303 



IV , Tariffs of the Crown colonies; etc.— Con. Page. 
Group 3. — Colonies which impose a uni- 
form ad valorem import duty, etc. — 
Continued. 
Tariffs- 
Treaty restrictions. 303 

Importduties 304 

Export duties 304 

Exceptions and special provisions 304 

Free ports 304 

Egypt 305 

Sudan 305 

Zanzibar 306 

Group 4.— Colonies which impose ad 
valorem and specific duties and some 
export duties— West Africa: Gambia, 
Sierra Leone, Gold Coast, Nigeria; 
Oceania: New Hebrides, Solomon Is- 
lands, Tonga- 
West Africa- 
Table 14.— Area and popula- 
tion.... 306 

Resources and trade 307 

Table 15.— Chief exports of the 
British West African colo- 
nies, 1918 308 

Table 16.— Commerce of the 
British West African colo- 
nics, 1913 and 1918 308 

Table 17. -Percentage of im- 
ports from and exports to 
the leading countries, 1912- 

1919 309 

Oceania 310 

Table 18.— Area, population, 

and trade 310 

Tarifls, British West Africa- 
Treaty obligations 310 

Import duties 310 

Table 19.— Imports into the 

Gold Coast, 1915 and 1916. . 312 
Table 20. -Imports of alco- 
holic beverages into the 

GoldCoast 313 

Export duties 313 

Preferential duties and restric- 
tions 314 

Tarifls, Oceania 314 

Group 5. — Colonies which impose specific 
and ad valorem duties and some export 
duties— British West Indies: the Sey- 
chelles — 

The West Indies 315 

Table 21.— Area and population 

of colonies in group 5 316 

The Seychelles 318 

Trade of the colonies in group 5 318 

Table 22.— Trade of colonies in 

group 5 318 

Tarifls— 

Import duties 318 

Export duties 320 

Preferences 321 

Group 6.— Colonies which impose import 
duties, specific or ad valorem, on most 
articles and usually export duties — 
Malta and Cyprus, Ceylon, Mauritius, 
British North Borneo, Brunei, and Fiji 

Islands— 321 

Table 23.— Area and population 
of colonies n group 6 322 

279 



280 



COLONIAL TARIFF POLICIES. 



Page. 

IV. Tariffs of the Crown colonies; etc.— Con. 
Group 6. — Colonies which impose import 

duties, etc.— Continued. 

Table 24.— Trade of colonies in 

group 6, 1913 and 1918 322 

Table 25.— Chief imports and ex- 
ports of Ceylon, 1917 323 

Table 26.— Distribution of the 
trade of Ceylon, 1913, 1918, and 

1919 323 

Table 27.— Exports of Ceylon to 

the United States, 1919 323 

Tariffs- 
Import duties 324 

Export duties 325 

Preferential tariff of Cyprus.. — 325 

V. The tariff of India 325 

Population and commerce — 
■ Area and popuJation— 

Table 28.— Area and population . 326 
Production and industry- 
Table 29.— Acreage of the chief 

crops, 1917-18 327 

Table 30.— Minerals produced in 

India, 1917 327 

Table 31.— Chief products of In- 

dianindustry 327 

Table 32.— Exports from India of 
articles wholly or mainly manu- 
factured, 1918-19 328 

Trade of India 328 

Table 33.— Growth of trade of 

India 329 

Table 34.— Share of the British 

Empire in the trade of India. . . 329 
Table 35.— Shares of the leading 

countries in the trade of India. 330 
Table 36.— Imports into British 

India, 1913-14 and 1918-19 331 

Table 37.— Exports of Indian 
merchandise from British 

India, 191S-14 and 1918-19 331 

Table 38.— Imports into British 
India from the United States, 

1913-14 and 1918-19 332 

Table 39.— Exports of Indian 
produce to the United States, 

1913-14 and 1918-19 332 

Tariff of India- 
Tariff history 332 

Present tariff 334 

Table 40.— Import tariff of India, 

1921 334 

Export duties... 335 

Native States 336 



Page. 
VI. Differential tariffs in the Crown colonies 

and in India 336 

Export duty on tin ore from the Feder- 
ated Malay States- 
Rate of cluty 337 

Reason for imposing the duty and its 

effects 338 

West African export duties- 
Nigerian duty on the export of tin ore. 339 

Export duty upon palm kernels 340 

The interest of the United States 

in the trade in pahn kernels ... 343 
Table 41.— Imports of pahn nuts 
and palm kernels into the 

United States, 1918-1920 344 

Protection of Indian industry against the 
world and against portions of the 
British Empire- 
Indian opinion in regard to protection. 344 
Opinion in regard to a differential 

tariff 347 

Table 42.— Materials for which the 

world depends upon India 349 

Table 43.— Trade in which im- 
perial preferences would give 
an advantage to Great Britain. 3.50 
Proposed dift'erential export duty on 

jute 351 

The differential export duty on hides 
and skins- 
Effects of the war on the Indian 

tanning industry 352 

The differential export duty 352 

Rate and differential 354 

Effects of the differential export 

duty 354 

Incidence of the duty 354 

Protwtion of Indian tannmg 

industry 355 

The preferential feature 
and the interests of the 

United States 355 

Table 44.— Imports of hides 
and skins into the United 

States from India 357 

Table 45.— Exports of hides 

and skins from India 357 

Minor and doubtful cases of preference. . . 358 

Cyprus, dift^ential tariff of 1920 360 

Table 46.— Preferential tariff rates 

ofCypms 361 

Preferential war restrictions: Dyestufis.. 361 
Preferential tariffs in the West Indies. ... 362 

Agreement of 1920 363 

Table 47.— Increases in West 

Indian preferences 365 

Table 48.— Preferences in excess 

of the trade agreement 366 

Summary and conclusion 367 

Bibliography 370 



I. Introductiois. 



THE BRITISH EMPIRE. 



In beginning their colonial activities the British were a full cen- 
tury behind the Portuguese and the Spaniards. Not until the first 
hall of the seventeenth century did the British establish their first 
settlements — in the West Indies, Virginia, New England, Newfound- 
land, and Honduras. The first footholds secured by the British 
East India Co. in India were of the same period; and in the same 
period, also, British traders established posts in Africa on the Gold 
Coast and on the Gambia River. In the course of the wars of the 
eighteenth century and of the Napoleonic period, British soldiers 
and statesmen added vast and widely scattered territories to the 
Empire: The eastern provinces of what is now Canada, several of the 



BRITISH CROWN COLONIES. 28.1 

West Indies, British Guiana, Gibraltar, Malta, Cape of Good Hope, 
Seychelles, Mauritius, Ceylon, and parts of India. But war and 
diplomacy were not the sole activities of the period: English trap- 
pers, traders, and missionaries entered western Canada, Sierra Leone, 
the Malay Peninsula (Straits Settlements) , Australia, Tasmania, and 
New Zealand. Toward the end of the eighteenth century the British 
Empire suffered its one great reverse and permanent loss in the revolt 
of the thirteen American Colonies. At the close of the Napoleonic 
Wars, Great Britain held eastern Canada, the British West Indies, 
a portion of South Africa, and certain other points on the African 
coast, Ceylon, considerable areas on the coast of India, and a few set- 
tlements in Australia which might have been of little importance but 
that in the absence of competition for the possession of this territory 
it was possible to develop them and they grew into the Dominion of 
New Zealand and the Commonwealth of Australia. 

After the Napoleonic Wars, for a period which extended to approxi- 
mately 1875, colonies were not popular in Great Britain. There was 
a general feeling that in the early stages of their development they 
were expensive and that upon arrival at maturity they might be 
expected to follow the example of the United States. Nevertheless, 
through the establishing of penal and other settlements — some of 
them undertaken in defiance of the Government — ^Australia, New 
Zealand, and British Columbia were colonized. In India, British 
authority was extended over large additional areas, in spite of reso- 
lutions both by Parliament and by the directors of the East India 
Co. In South Africa, likewise, authority was extended over Natal 
(1843) and Basutoland (1868). Aden was acquired in 1839, Hong- 
kong in 1841,. Lagos in 1861, and the Fiji Islands in 1874. The 
four last-named small areas constituted the total of new acquisi- 
tions, as distinguished from the advancing of boundaries previously 
established, in the period between 1815 and 1875. 

A new era in colonial activity opened shortly after 1877, a period 
in which the dominant feature was the ^^ scramble for Africa," though 
Asia was not overlooked. The initial activities of Great 'Britain in 
this period were ^ the lease of Cyprus from Turkey in 1878 and the 
occupation of Egypt in 1882. Between 1881 and 1900, inclusive, 
the British established protectorates over, or other titles in relation 
to, the Anglo-Egyptian Sudan, British Somaliland, British East 
Africa, Uganda, Zanzibar, Nyasaland, Rhodesia, Bechuanaland, 
Zululand, Swaziland, the Orange Free State and the Transvaal,^ and 
practically the whole of the territories which now constitute Sierra 
Leone, the Gold Coast, and Nigeria. The boundaries of these posses- 
sions had not been wholly determined by 1900, but the African ter- 
ritory brought under British rule may be said to have increased from 
about 263,000 square miles in 1877 to 3,600,000 square miles in 1900. 
During the same years, British rule was extended in Asia and 
Oceania, over parts of New Guinea (Papua) and of Borneo (British 
North Borneo, Sarawak, and Brunei), and over the States of the 

1 Great Britain annexed the Transvaalin 1877 and relinquished it with a reservation of '''suzerainty" 
In 1881, In 1878 the British annexed a large area between the Orange River and Portuguese Angola under 
the names Damara and Namaqualands; but much of this was later recognized as German territory. 

2 The Transvaaland the Orange Free State were declared annexed in 1900, but the treaty of peace which 
confirmed this annexation was not signed until May 31, 1902. The acquisitions are here named in a geo- 
graphical, not a chronological sequence. 



28^ 



COLOXIAL TAEIFF POLICIES. 



Malay Peninsula,^ Weihaiwei, and numerous small groups of Oceania 
(the Solomon, Friendly, Gilbert, Ellice, and other islands) ; and the 
boundaries of Burma and of northwest India were advanced.^ 



AREA, POPULATION, AXD CLASSIFICATION. 

The British Empire had in 1914 an area of 12,800,000 square miles 
and a population of 440,000,000; its territories were susceptible to 
classification as in Table 1. 

Table 1. — Area and population of the British Empire,^ 1914. 





Area 
(square 
miles). 


Total 
population. 


Population 

per square 

mile. 


United Kingdom ' . 


121,633 
7,535,455 
3, 349, 794 
1, 802, 1 12 


46, 407, 037 

20, 852, 821 

57, 387, 830 

.^15 n*vfi 372 


380 


Self-governing Dominions 


3 




17 


India . . 


175 








Total .... 


12,808,994 4:39,734,060 









1 Figures from th.e Statesman's Year-Book, 1915. 

The term ''Crown colonies" may be used to include all British 
dependencies except India and the self-governing Dominions.^ 
Officially a distinction is made in classification between certain 
colonies which possess elective assemblies and those which are more 
autocratically governed; and there are also numerous ''Crown 
places," e. g., protectorates, which are not strictly speaking colonies 
at all. India is a colony within the wider meaning of that term, but 
the expression ''the colonies and India" is customary among the 
British, where it is not forgotten that the sovereign who is merely 
King in other parts of the Empire is Emperor in India. India is 
indeed an empire, but as the British Parliament may legislate 
directly for it and as the secretary of state for India controls the 
viceroy who in turn controls the legislative and executive councils, 
the exclusion of India from the jurisdiction of the colonial office has 
not as yet ^ meant for it a greater degree of self-government than is 
enjoyed by various Crown colonies. 

The area of the British Empire has not been increased ' as a result 
of the war, since all the extra-European territories lost by Germany 
and Turkey have been distributed, not as colonial possessions but as 
territories administered under mandate from the League of Nations. 
The status of these areas and their tariffs have been discussed in an 
appendix to the chapter on the German colonies. (See j). 265.) 

Though this chapter on tariff policy in the CroT\Ti colonies and 
India does not deal with territories included in the South African 
Customs Union, nor with the dependencies of the self-governing 

3 Treaties had been made with three of these States in 1874, and two of the States were ceded by Siam 
in 1909. 

i In the 20 years, 1861-1881, the area of British India increased 19,000 square miles: in the years 1881-1901 
the increase was 223,000 square miles. (Statesman's Year-Book, 1902.) Since 1901 there has been a 
decrease of nearly 5,000 square miles, due to the reestablishing of native States. 

6 And e.xcept the Isle of Man and the Channel Islands . See the Statesman's Year-Book, 1920, p . xxx\Tn. 

8 But see p. 285. 

» Shortly after Turkey's entrance into the war, the British Government declared Cjrprus annexed and 
Egypt a British protectorate. These formal changes were indirectly recognized in the peace treaty with 
Germany. 



BEITISH CROWN COLONIES. 



283 



Dominions,^ nor with such dependencies of India as Bhutan and Nepal, 
the number of separate tariffs to be dealt with is twice as great as 
in any other colonial empire and for convenience the colonies have 
been grouped according to the similarities of their tariffs. In such 
cases as that presented by the Leeward Islands, where the govern- 
mental organization permits the territory to be regarded either as a 
single colony or as more than one, all divisions which have separate 
tariffs have been treated as separate colonies. Altogether 57 
tariffs are discussed in this chapter, arranged in six groups in addition 
to India. The list, in geographical sequence, is as follows: 



BKITISH CROWN COLONIES. 



Europe (2): 
Gibraltar. 
Malta. 

Africa (13): 
Egypt. 

Anglo-Egyptian Sudan. 
Somaliland. 
Kenya ^ and Uganda. 
Zanzibar. 
Nyasaland. ^° 

Gambia. 
Sierra Leone. 
Gold Coast. '"■ 
Nigeria. 

St. Helena, 
Seychelles. 
Mauritius, 

Asia (17): 
Cyprus. 
Aden. '^ 

Bahrein Islands. 

India. -^ 
Ceylon. 

Straits Settlements. ^* 
Federated Malay States: 

Pahang. 

Perak. 

Selangor. 

Negri Sembilan. 
Protected Malay States: 

Johore. 

Kedah. 

Perils. 

Kelantan. 

Trengganu. 

8 Papua (British New Guinea) and Norfolk Islands are dependencies of Australia, and the Cook Islands, 
of New Zealand. See chapters on AustraUa and New Zealand, pp. 805 and 775. 

9 Kenya formerly British East Africa. 

10 Nyasaland formerly British Central Africa. 

" Gold Coast includes Ashanti and the northern territories. 

12 Aden includes Perim, Sokotra,and the Kuria Muria Islands. 

13 India includes the Andaman, Laccadive and Nicobar Islands, as well as Sikkim and Burma. Ceylon 
includes the Maldive Islands. 

'< The Straits Settlements include Labuan, Christmas Island, and the Cocos or Keeling Islands. 
15 Anglo-French condominium. 



Hongkong. 
Weihaiwei. 
Oceania (8) : 

British North Borneo* 
Sarawak. 
Brunei. 

Gilbert and Ellice Islands. 

Solomon Islands. 

New Hebrides. ^^ 

Fiji Islands. 

Friendly Islands (Tonga). 

America (17): 
Bermuda. 

West Indies proper: 
Bahamas. 
Jamaica. 

Turks and Caicos, 
Leeward Islands — 

Antigua. 

St. Christopher-Nevis. 

Dominica. 

Montserrat. 

Virgin Islands. 
Windward Islands — 

St. Lucia. 

St. Vincent. 

Grenada. 
Barbados. 

British Honduras. 
Trinidad and Tobago. 
British Guiana. 

Falkland Islands. 



185766°— 22- 



-19 



284 COI^O^^IAL TAEIFF POLICIES. 

II. GOYEKXMEXT AXD IVIaKING OF TARIFFS. 

According to their form of gOYermnent the British colonies may 
be divided into self -governing Dominions and all other dependencies. 
The former will be found treated at length in Part II of this report. 
The latter may be subdivided into five classes: At one extreme are 
those ruled by a governor, with no legislative council; at the other, 
those which have an elected assembly and a nominated legislative 
council. The intermediate types have legislative councils, some 
wholly appointed, some partly elected; and in the latter type, some 
have and some have not provision for maintaining an official majority 
in the council.^^ Wholly elected assemblies are found in Malta,^^ 
Bahamas, Barbados, and Bermuda; partly elected assemblies or 
councils in British Guiana, Jamaica, the Leeward Islands, Cyprus, 
Kenya (East Africa), Mauritius, and the Fiji Islands.^^ It will be 
noticed that the West Indies figure conspicuously in the list. In a 
general way the more important the colony and the greater its white 
population the more likely it is to have representative institutions 
and to advance from time to time in the dkection of responsible 
self-government. Where there are representative assemblies the 
assent of these assemblies is necessary to the raising and expenditure 
of public revenues, but the initiative in proposing expenditure, and 
ordinarily in proposing taxation, rests with the governor.^^ 

In every case the governor has a veto on all legislation. Where 
the assembly contains an official majority ^"^ the governor can pass 
any measure upon which he deems it advisable to insist; and, a 
fortiori, where there is no legislative assembly the governor is the 
final local legislative authority. The governor is subordinate to the 
colonial office, and in all the Crown colonies and protectorates except 
Malta, Bahamas, Barbados, Bermuda, British Honduras, and the 
Leeward Islands the Crown retains the right of legislating by order 
in council,^^ i. e., the British cabinet or even two or three of its 
members may legislate direct! f r a colony. 

However unrestricted the power of the governor may be in a colony, 
his acts are subject to approval or reversal by the authorities in 
London. 

In the Crown colonies, principle is determined by Parliament as the interpreter of 
the spirit of the British constitution; poHcy by the colonial office subject to the 
control of Parliament; practice bv the 2:overnor subject to the control of the colonial 
office.22 

16 It is understood that all officials, who are of necessity the administrative assistants of the governor, 
•will vote as he dictates. ^^Tiere these official members of the council are sufficiently numerous to outvote 
the elected members and any nonoffieial appointed members, the governor is said to hare an official 
majority. 

" See'The Times (London), June 15, 1920. The government of Malta under the new constitution 
began on May 16, 1921. 

1^ According to an announcement in the House of Commons, July 28, 1920, Ceylon is to have a new- 
constitution under which the unofficial members of the legislature will be in the majority. The Times 
(London), July 29, 1920. 

19 This power is not peculiar to the colonial governor; throughout the British Empii'e the executive 
controls the finances— even the British House of Commons can not increase the proposed expenditures. 

2" Andinothercoloniesalsotoacertain extent. Thus, in Malta the governor can legislate on ''reserved'' 
subjects, and in the proposed constitution of Ceylon, the governor may carry measures which he judges 
to be of "paramount importance"' by the votes of the official members regardless of their being in a 
minority. 

21 This statement (except as to Malta) appears on page 777 of the Colonial Office List, 1920, and refers 
specifically to the colonies mentioned in a classification according to form of government. This classffica- 
tion, however, does not include a number of colonies whoserelationship to the Empire is pecaiiar, especially 
those that are protectorates within the narrower sense of that word. The following colonies are those not 
specifically included in the statement: India, Egypt, the Sudan, the Malay States, Sarawak, Brunei, 
North Borneo, Zanzibar, and the New Hebrides . 

^ Bruce, Sir Charles: The Broad Stone of Empire, 1910, Vol. I, p. XIX. 



BEITISH CHOWK COLOIs'IES, ^ 285 

As applied to tariff policy, throughout the 60 years preceding 1919 
this control by the British Parliament and the colonial and India 
offices meant the maintenance of a free-trade system without prefer- 
ential duties and with tariffs for revenue only. But a few protective 
duties were allowed to creep in and even an occasional preferential 
item, while in other cases customs duties were entirely absent. As 
the business transacted between the colonial office and the colonial 
governments is not ordinarily made public it is difficult to state how 
much initiative is left to the local governors and councils or how 
frequently they are overruled by the British authorities. x\n English 
writer stated in 1906 that "it there is any interference from the 
colonial office at home it seldom appears on the surface"; and after 
referring to the situation in India, particularly in regard to the duties 
on cottons, he continued, ^^with these possible exceptions there is no 
clear evidence in recent times of interference by the home govern- 
m.ent with the arrangement of colonial tariffs; most certainly no 
attempt of the sort has been made in the House of Commons which 
would be the ultimate authority in such matters. "^^ None the less 
there is evidence that the colonial office has ndt only frequently 
disallowed individual rates of duty^'* proposed by the local government 
but has also taken the initiative in their imposition. It has tried to 
restrict to a minimum the use of export duties; but the differential 
export duty on palm kernels exported from the British West African 
colonies was imposed by order of the colonial office. 

In regard to the making of its tariff, India has not in the past 
differed strikingly from the Crown colonies ; though it has been sub- 
ject not to the colonial secretary but to the secretary of state for 
India, advised by the India council in London. On the whole it 
appears that because of its importance and the existence of a minis- 
try concerned exclusively with India the control exercised over India 
by the British Government has been more strict than that exercised 
over the lesser colonies. However, the Indians are now obtaining 
a greater part in the government of the country. In particular the 
constitutional changes initiated in 1919, while they maintain the 
authority of the British Government over the finances and trade of 
India, grant to the Indian legislative assembly a veto on all financial 
proposals, tariffs included. -'^^ The executive branch — as is universal 
in the British Empire — of the Indian Government retains the sole 
povfer of submitting fiscal proposals to the legislature, but doubt has 
been expressed as to its ability to maintain under the new constitu- 
tion any real independence of the legislature. Similarly, while the 
law does not take from the secretary of state for India his veto on 
Indian fiscal legislation, it is recognized that it will not be feasible 
for him to exercise this control. The joint parliamentary com.niittee 
which had the bill under consideration stated that: 

* * * nothing is more likely to endanger the good relations between India and 
Great Britain than a belief that India's fiscal policy is dictated from Whitehall in the 
interest of the trade of Great Britain. That such a belief exists at the moment, there 

23 Hoot, J. W.: Colonial Tariffs, Liverpool, 1906, p. 275. 

24 An ex-governor of Grenada mentions that a duty of Is. a ton on coal imported into Grenada was dis- 
allov/ed, but a rate of 6d. a ton was permitted a few years later. In the same v/ay one colonial secretary 
disallowed and his successor permitted certain export duties from Grenada. (Bruce: Op. cit., Vol. II, 
pp.230, 233,239,249.) 

24 a The Times correspondent reports that the second session of the Indian legislature makes it clear 
that the limitations on the Assembly's control over the Durse are in practice ineffective. (The Times, 
Oct. 28, 1921.) 



286 COLONIAL TARIFF POLICIES. 

can be no doubt; that there ought to be no room for it in the future is equally clear. 
Liberty must be granted to the Government of India to devise those tariff arrangements 
which seem best fitted to India's needs as an integral portion of the British Empire. 
The broad conclusion is that the secretary of state for India should as far as possible 
avoid interference on this subject, when the Government of India and its legislature 
are in agreement, and his intervention, when it does take place, should be limited 
to safeguarding the international obligations of the Empire or any fiscal arrangement 
within the Empire to which His Majesty's Government is a party. -^ 

The forecasts that the bill would deprive the British Government 
of effective control over Indian fiscal legislation were borne^out in 
March, 1921, when Mr. Montagu, secretary of state for India, made 
the following statement to a deputation which was protesting against 
the increase of the Indian customs duties without a corresponding 
increase of the excise duties (see page 345) : 

It would be theoretically possible for me to veto the bill, in which these duties 
are contained when it comes home for sanction. Actually it is, I would submit, 
absolutely impossible. I can not veto part of a bill; I must veto the whole bill; 
and I should, therefore, leave the GoA^ernment of India with absolutely none of their 
increased revenue to meet their increased charges. Supposing when the budget came 
home originally for sanction I had refused leave to introduce it, what would have 
happened? The Government of India would have had to propose to their legislative 
assembly duties upon cotton, coupled with a corresponding excise. That legislative 
assembly contains an overwhelming majority of mem^bers fresh from the constituencies 
on whose vote the issue would be decided. I do not hesitate to say that there would 
not be one single member of that elected majority that would have voted for an^ 
excise duty upon cotton good».^^ 

Ordinarily the local governor and his advisers take the initiative 
in changing the customs duties. The proposals normally form part 
of the annual budget, and therefore in so far as the colony has repre- 
sentative assemblies or councils the proposals come within the par- 
ticular sphere of these bodies. In smj case, even where the governor 
is the final authority, ^Hhis does not imply that where tariff or any 
other policy is concerned personal or official opinion and predilection 
are all that count; probably more care, is taken in such instances to 
consult and be guided by people who have direct interests at stake 
than in others where responsibility is less." ^"^ 

As the tariffs are revenue tariffs, usually without protective features, 
a change or threatened change of the rates does not affect industry 
and business to the same extent as do changes of equal magnitude in 
protective duties. For this reason colonial governments feel free to 
revise the tariffs according to the fiscal needs of the year, and changes 
are therefore very frequent ^^ as compared to the relative stability of 
the tariff rates in the French, Italian, American, and other colonies. 

*» In the House of Lords , Lord Crewe said that as to the relation of the control of Parhament , he was sure 
that, as in the case of the Dominions before they received complete self-control. Parliament would under- 
stand that meticulous interference with details of Indian Government ought to be relaxed, and that it 
would be relaxed. (The Times (London), Nov. 20, 1919, p. 6.) 

Lord Sydenham said: "Supreme government of India was made far weaker than before. Controlln 
some very important aspects of policy was taken away, and while powers were vested in the viceroy, he 
might not be able to use them in the'face of a hostile legislative assembly." (Ibid., Dec. 13, 1919, p. 19.) 

Lord Denniss believed that the bill would tie the hands of the secretary of state and prevent the right 
honorable gentleman placing any check upon a fiscal measure which might impose fetters upon British 
trade with India. (Ibid.) 

Mr. E. S. Montagu stated in an earlier debate that he was quite in agreement with fiscal autonomy for 
India, but it was for the [executive branch of the] Government to put forward the proposals. Most of the 
officials in India had been protectionists; he, himself, was a convinced free trader. It was certain that if 
we had key industries in this country, India would have the same. India should have the opportunity of 
revismg her tariffs in what she considered to be her interests. (Ibid., Dec. 5, 1919, p. 20.) 

26 The Times (London), Mar. 26, 1921. 

37 Root: Op. cit., p. 282. 

88 These frequent changes make very difficult any attempt to define in detail the rates in force at a given 
time in the British Crown colonies or to describe the rates in force in a given colony through a given period. 

Changes in the tariff of India are comparatively infrequent. 



BRITISH CROWN COLONIES. 287 

The situation is even more complex than in 1885, when it was 
stated that ^4n their details the tariffs of the various British colonies 
exhibit a perfect chaos in which it is vain to seek a unifying principle. 
This is due to their unsystematic and accidental development and to 
exceptionally complex and varied economic circumstances." ^^ 

III. Tariff Policy and System. 

TARIFF POLICY OF GREAT BRITAIN. 

In the years from 1842 to 1860 Great Britain completely abandoned 
the protective tariff policy which had included preferential tariffs 
and bounties upon the trade between the Mother Country and the 
colonies. After 1860 the British derived considerable revenue from 
customs duties, although until after the outbreak of the World War 
they consistently avoided any protective duties. Duties were levied 
for the most part on articles which were not native products of Great 
Britain — sugar, coffee, tea, cocoa, tobacco, wine, dried fruit, and 
motor spirit.^^ These articles were selected not only because they 
were articles of wide and constant consumption but because their 
taxation could have no protective effect; any protective effect upon 
the other important dutiable articles was avoided in the case of beer 
and distilled liquors by an equivalent excise tax and in the case of 
tobacco by a prohibition of its cultivation in Great Britain.^^ Between 
1860 and 1903 the policy of maintaining the tariff strictly for revenue 
and without even incidental protection and the concomitant policy of 
maintaining the open door in the Crown colonies were not questioned 
in such a way as to make them political issues. Since 1903 prefer- 
ential tariffs within the Empire with more or less incidental protec- 
tion have been more and more strongly supported. The advocates of 
such a change obtained their first tangible success in transforming 
their ideas into legislation only after the World War had been in 
progress for some time. To what extent these preliminary successes 
foreshadow a permanent change from the policy pursued through two 
generations and to what extent a triumph of an imperial preferential 
tariff policy will involve the adoption of protection in Great Britain 
can not, of course, be foreseen. But it is evident that unless imperial 
preference is rejected by public opinion in Great Britain its success 
must lead to its application in the Crown colonies and to the closing 
of the open door. And its application is likely to be much more 
extensive in the Crown colonies than in the United Kingdom, since 
the comparatively long lists of dutiable articles in the schedules of 
most of the colonies afford an easy opportunity for an extensive ap- 
plication of the principle, while in Great Britain the principle can be 
widely applied only after duties shall have been levied on many food- 
stuffs and raw materials which now are admitted duty free. 

29 Rawson: Tariffs and Trade of the British Empire, quoted by Carl Fuchs in The Trade Policy of Great 
Britain and Her Colonies Since 1860, p. 233. 

30 In 1914 the schedule had come to be much longer than this hst and numerous imitations and related 
products were dutiable — e. g., chicory, glucose and saccharine, molasses, caramel, confectionery, marma- 
lade, condensed milk, and fruits candied or preserved in syrup. The dutiable fruits were currants, figs, 
plums, primes, and raisins. Articles dutiable in connection with spirits were chloroform, ether, ethyl 
compounds, collodion, and soap containing spirit. It is evident that duties on sugar and on spirits would 
give an advantage to foreign manufacturers unless these products containing sugar and spirit were also 
dutiable in Great Britain. 

5*1 The prohibition was repealed a few years ago. It was originally imposed to give a monopoly to 
tobacco growers in the American colonies. 



288 colo:n"ial taeiff policies. 

TREATIES AXD BRITISH COLOXIAL TARIFFS. 

The treaties to which Great Britain is a party and which bear 
upon the tariffs of the Crown colonies and India may be considered 
under four heads — multilateral treaties; bilateral agreements for 
the maintenance of the open door in specified areas; general com- 
mercial treaties with more or less incidental references to the col- 
onies; and commercial treaties which deal primarily with the tariffs 
of particular colonies. 

MULTILATERAL TREATIES. 

Great Britain is a party to the treaties of 1885 and 1919 by which 
the powers pledged themselves to the maintenance of the open door 
in central Africa and to the Brussels treaty of 1890 and its revisions 
in 1899, 1906, and 1919, prescribing minimum duties to be imposed 
upon liquors imported into most of Africa. These treaties have 
been discussed in connection with the .Congo (see pp. 85 and 121) 
and it need only be said here that the former pledge the open door 
in Kenya (British East Africa), Uganda, Zanzibar, and Nyasa- 
land, while the Litter establish a minimum rate of duty to be levied 
upon alcoholic liquors in the territories already named, and also in 
the four British West African colonies, the Anglo-Egyptian Sudan, 
and the South African territories which are not part of the Union of 
South Africa, 

OPEN-DOOR TREATIES. 

The maintenance of the open door in Nigeria and the Gold Coast 
was pledged for a period of 30 years in the Anglo-French treaty of 
1898 (see p. 144) ; and in several arrangements concluded with Ger- 
many in 1885, 1886, and 1899 Great Britain pledged the open door 
in her islands in the western Pacific (see pp. 240, 241). The port of 
Weihaiwei is by treaty with China an open port and in addition as a 
British dependency comes within the terms of the note of 1899 by 
which Great Britain agreed to the proposal put forward by Secretary 
Hay of the United States, that the powers should pledge themselves 
to the maintenance of the open door in their spheres of interest in 
China. . Egypt is found as usual to occupy a peculiar position. 
The series of treaties limiting the rate of the duties leviable in Egypt 
began before the British obtained recognition of the authoritative 
character of then- ''advice'' in regard to the government of Egypt, 
and Great Britain is herself a party to one of this series and must be 
regarded in construing Egyptian treaties as a foreign country. In 
so far as the treaties of Egypt make provisions for special favors as 
exceptions from most-favored-nation treatm^ent, these exceptions 
relate to the Turkish Empire, the Sudan, and Persia. Neither the 
protectorate declared by Great Britain in 1914 nor the recognition 
of this form of annexation in the treaty of Versailles operates as a 
nullification of the rights guaranteed by Egyptian treaties, so that 
the network of treaties with the chief commercial countries col- 
lectively guarantees the maintenance of the open door in Egypt. ■^" 

32 See also the treaty of 1904 with France, p. 205. 



BRITISH CROWN COLONIES. 289 

GENERAL COMMERCIAL TREATIES. 

Great Britain has, or had until recently, ^^ commercial treaties with 
most of the countries of the world. Those treaties were made at 
different periods and reflect the change in policies of the British 
Empire in regard to navigation, commerce, and colonial autonomy. 
The treaties vary much in their scope, but usually provide (with or 
without exceptions and limitations) for most-favored-nation treat- 
ment in regard to tariffs and numerous other matters affecting trade. 
In reference to the inclusion or exclusion of the colonies, the treaties 
may be grouped chronologically. 

The* oldest treaties and those made up to about 1880 generally 
included the whole British Empire. The colonies were bound by the 
treaties of the Mother Country and this was usually explicitly men- 
tioned in the treaty. Many of the oldest treaties which are nomi- 
nally in force belong to the exclusive mercantilist period and provide 
for the reservation of all colonial trade to the Mother Country. Thus 
the treaty of 1670 with Denmark provides that ^' the subjects of the 
King of Denmark shall not come to the British colonies, unless by 
special license of the King of Great Britain first desired and 
obtained."^* The mercantilist period extended into the nineteenth 
century, and in the treaty of 1815 with the United States the British 
pledged most-favored-nation treatment only in their European pos- 
sessions and in the ports of Calcutta, Madras, Bombay, and Prince 
of Wales Island, from which ports, moreover, exports were permitted 
in American ships only for transportation direct to the United States.^^ 
But while these old treaties are still nominally in force, some of 
these clauses have been superseded by later treaties. In other cases — 
e. g., the treaty of 1815 with the United States — the much more lib- 
eral treatment actually accorded to foreign commerce makes it evi- 
dent that the severely restrictive provisions of these treaties have 
had no influence on British colonial trade policies in recent decades. 

The latter part of the period which extends to 1880 covers the tri- 
umph of the free-trade movement in Great Britain and treaties then 
made reflect the ^'liberalism'' of that period. In treaties made be- 
tween 1849 and 1880, most-favored-nation treatment and even na- 
tional treatment in regard to many matters was pledged by Great 
Britain and the other contracting powers '^ throughout the whole 
extent of their possessions and territories."^® With the exception, 
however, of two which were later denounced,^^ even these treaties of 
the free-trade period did not guarantee the open door in the colonies 
but only the treatment accorded to the most favored foreign country. 

Beginning about 1880 the movement toward colonial autonomy 
is seen in the gradual adoption of the provision that the terms of 
the treaties do not apply to the self-governing Dominions or to the 

«3 The outbreak of the war terminated many treaties and many more were denounced in 1917-1920 to 
allow a clear field for the new tariffs and new commercial poUcies. 

31 Gt. Brit., foreign office, Handbook of Commercial Treaties, 1912, p. 249; Brit, and For. State Papers, 
vol. 1, p. 381. Compare the treaty of 1858 with Sweden, which is also given in the handbook (p. 899) as 
being still in force in 1912. 

3' MaUoy: Treaties, Conventions, Vol. I, etc., p. 624. This treaty did not apply to the West Indies, 
Canada, aiid Newfoundland. American vessels were allowed to touch for refreshment but not for commerce 
at the Cape of Good Hope and other British possessions in the African and Indian Seas. 

36 Treaty of 1866 with Colombia, Handbook of Commercial Treaties, p. 217. Compare the treaty ot 1850 
with Peru and those of 1818 with Liberia and 1849 with Costa Rica. Handbook of Commercial Treaties, 
pp. 517 and 233. 

37 Treaties of 1862 with Belgium and of I860 with the German Zollverein, see pp. 435, 445. 



290 COLOJTIAL TARIFF POLICIES. 

Dominions and India, unless they give notice of their adhesion 
within a limited time.^® In the nineties this option of becoming a 
party to the treaty was extended to the Crown colonies generally. 
A treaty of 1894 with Spain ^^ provided that any colony might with- 
draw upon suitable notice, and the treaty of 1898 with Belgium ^° 
provided that its terms were not applicable to the colonies except 
in so far as they individually and within a year signified their intent 
of becoming parties thereto. Numerous other treaties contain the 
same stipulation, many of them providing further that the trade of 
the colonies is none the less to receive most-favored-nation treatment 
in the country in question as long as the trade of the latter receives 
such treatment in the colonies. A little later amendments began 
to be introduced into the older treaties, by which any of the colonies, 
or in some cases only the Dominions, might withdraw from them 
upon giving the customary notice.*^ These general commercial 
treaties have little direct bearing on colonial tariffs. They do not 
limit the rates which may be imposed in British colonies, nor do they 
prohibit discriminatory tariffs in favor of Great Britain and other 
parts of the British Empire. Accordingly it has not been considered 
necessary to check up the adhesions and withdrawals of the British 
Crown colonies to and from these treaties. The colonies are very 
commonly parties to the treaties, but India has ratified fewer of 
them than have most of the Crown colonies. 

COLONIAL TARIFF TREATIES. 

Great Britain has made a few treaties which deal directly with 
tariff rates of single colonies as distinguished from the open-door 
agreements previously mentioned, which, for the most part, stipu- 
lated nondiscriminatory tariffs without prescribing maximum or 
other rates. The treaties in force up to the recent widespread move- 
ment for the denunciation of commercial treaties, ^^ or still in force, 
are as follows : 

In Egypt treaties with various powers indirectly guarantee the 
open door, and directly limit the import duty to 8 per cent ad valorem 
and the export duty to 1 per cent, with certain exceptions. In 
Zanzibar likewise the rates of duty are limited by treaties which 
antedate the British protectorate. (See p. 305.) 

A series of treaties was made in 1901-1907 between Great Britain 
and France, on behalf of India, Ceylon, the Seychelles, Zanzibar, 
British East Africa, Uganda, Nyasaland, Jamaica, and Barbados.^ 

88 See treaties of 1883 with Italy, 1884 with Paraguay, 1886 with Greece, 1888 with Mexico, and 1892 with 
Ecuador. Handbook of CommeVcial Treaties, pp. 484, 651, 449, and 281, and Brit, and For. State Papers, 
vol. 79, p. 25 (Mexico, 1888). 

*9 Handbook of Commercial Treaties, p. 894. 

<o Handbook of Commercial Treaties, p. 25. Compare the treaty of 1899 with Uruguay, those of 1905 
with Bulgaria, Roimiania, and Nicaragua, that of 1907 with Servia, those of 1910 with Honduras and 
Montenegro, those of 1911 with Bohvia and Japan, and that of 1914 with Portugal. 

<i Treaties of 1908 with Liberia and Paraguay; 1912 with Colombia and Denmark; 1913 with Costa Rica. 

« By treaties previously in force rates were reduced or prescribed in British East Africa, the part of the 
Gold Coast lying east of the River Volta, the British West Indies, and British Guiana. See p. 401 for the 
treaty of Great Britain, Italy, and Germany relative to East Africa; footnote 80 on p. 258 for the treaty 
between Great Britain and Germany relative to Togo and the Gold Coast; and p. 153 of the United States 
Tarifl Commission's report on Reciprocity and Commercial Treaties, for the reciprocity agreements of 
1892-1894, between the United States and the British West Indies and British Guiana. The overland 
trade between Burma and China was subject to special tariS arrangements embodied in the treaty of 
March 1, 1894. By this treaty for six years Burma was to collect no import or export duties upon over- 
land trade with China except an import duty on salt, while China made reductions from the regular 
rates of the maritime customs to the extent of 20 per cent upon imports and 40 per cent upon exports. 

" Handbook of Commercial Treaties, pp. 328, 329, 331, 332, 334, 336, 352. 



BRITISH CROWN COLONIES, 291 

These colonies obtained admission to France under the minimum 
tariff rates either for their products generally or for the '^colonial 
products^' specified in Table E of the French tariff of 1892, and in 
return some, but not all, of the colonies granted specified reductions 
in their tariffs. India reduced the rate on vinegar in casks and on 
copperas by one-half; Zanzibar reduced by one-fifth the valuation 
upon French brandy and liquors; and the Seychelles reduced the 
rate on wine and on haberdashery. These reductions were gener- 
alized so that there was no discrimination in favor of French products. 
These treaties were among those denounced by France in 1918, 

The treaty of 1824 with the Netherlands ^^ limits the amount of 
any differential duties which may be levied in India, Ceylon, and the 
Eastern Archipelago. Article 2 of this treaty reads as follows : 

The subjects and vessels of one nation shall not pay, upon importation or exportation, 
at the ports of the other in the eastern seas any duty at a rate beyond the double of 
that which the subjects and vessels of the nation to which the port belongs are charged. 

The duties paid on exports or imports at a British port on the continent of India, or 
in Ceylon, on Dutch bottoms shall be arranged so as, in no case, to be charged at 
more than double the amount of the duties paid by British subjects and on British 
bottoms. 

In regard to any article upon which no duty is imposed, when imported or exported 
by the subjects, or on the vessels, of the nation to v/hich the port belongs, the duty 
charged upon the subjects or vessels of the other shall in no case exceed 6 per cent. 

SUMMARY. 

From the early sixties to 1898 Great Britain was pledged by two 
treaties to levy in her colonies no higher duties upon foreign than 
upon British goods. Since 1898 Great Britain has been bound by 
no such general obligation, but has been bound by various specific 
agreements and is committed to the policy of maintaining the .open 
door in different parts of the world. Agreements with Germany, now 
abrogated or subject to abrogation, pledge the open door in the 
islands of the western Pacific. Until 1928 the open door is to be 
maintained in Nigeria and the Gold Coast, and for an unlimited time 
the open door is pledged for the East African colonies, including 
Nyasaland, and for Egypt ^"^ and Weihaiwei, 

The rates of colonial tariffs on particular articles have been the 
subject of a few treaties, and these treaties have for the most part 
lapsed. The most important exception is found in the series of 
treaties fixing a maximum rate upon alcoholic liquors imported into 
most of the continent of Africa. With the exception of alcoholic 
liquors and of arms and ammunition the maximum rate of the im- 
port duty is limited to 10 ^^ per cent ad valorem in Kenya, Zanzibar, 
and Nyasaland, and to 8 per cent in Egypt. 

From the time of Great Britain's adoption of free trade to her 
denunciation of her treaties with Belgium and the German ZoUverein 
in 1898, Great Britain freely entered into treaties and agreements 
for the maintenance of the open door, and was a party to practically 

** Handbook of Commercial Treaties, p. 607. Brit, and For. State Papers, vol. 11, p. 194. 

*^ While the various treaties of the powers with Egypt, as well as the Franco-British agreement of 1904, 
restricted the Egyptian tariff rate only for limited periods of time, the general body of Egyptian treaties 
containing the capitulations and most-iavored-nation clauses are not limited in this way, and it is clear 
that the other powers can maintain, for an indefinite period, the open door in Egypt if they stand on their 
treaty rights. 

<6 But when and ifthe revision made in 1919 of the Berlin act of 1885 comes into force this limitation to 10 
per cent will be removed. In Egypt a duty on alcoholic liquors is limited to 10 per cent, and of arms and 
ammunition to 8 per cent. 



292 coloinial takiff policies. 

every one of the treaties of this nature made during this period.^' 
Since 1900 the world has seen few open-door agreements and Great 
Britain has become a party to no agreement which limits her freedom 
of action in her own colonies.^ 

In addition to the open-door treaties mentioned above one other 
treaty might somewhat hamper the British Government in the intro- 
duction of differential tariffs in British India and Ceylon — the treaty 
of a century ago limiting the amount of the preference which might 
be granted to the subjects and vessels of the Mother Country in the 
tariffs of those colonies. 

TARIFF POLICY IN THE CEOVrX COLOXIES. 

As the tariff policies pursued in the Crown colonies and in India 
have been subject to the control of the British Government, their 
origin and character may be indicated in the general statement that 
they reflect the policy of the Mother Country; that is, for about 
sixty years the colonies had tariffs for revenue only and without 
discriminatory features. Such discriminatory rates as have thus 
far been adopted have for the most part been introduced at the tim_e 
when the special war-time restrictions were being abandoned. In 
its practical application, however, a tariff for revenue only is a very 
different thing in the Cro^\Ti colonies from what it is in Great Britain. 
And diverse as are these colonies in area, climate, population, and 
economic development, they are alike in those features of their 
economic Ine which bear most directly on general tariff policj'. 
With scarcely an exception other than India, they are practically 
without manufacturing industries. They export a few staple prod- 
ucts and import wide varieties of consumption goods. It is therefore 
not necessary to pick and choose dutiable articles in order to avoid 
the building up of protected industries f and since so large a part 
of the goods consumed by all classes is imported "it has come to be 
recognized that the burden of taxation can most fairly be distrib- 
uted" by a wide incidence of custom_s duties. ^'^ 

The colonies with the exception of the free ports generally rely to a 
considerable extent upon customs as a source of revenue. ^^ In a 
number of them more than one-half of the total revenue is regularly 
derived from this sorce (e, g., Malta, the Gold Coast, and the Baha- 
mas). Even the simple tariff sj'stems of the colonies in group 2 
yield about one-third of the revenues expended by then' governments. 
In general the colonial office has been opposed to export duties, but 
it has permitted tlieir use in the more undeveloped colonies and in 
some cases even in the better developed colonies, particularly where 

*7 The only exception is the Franco-Portugiiese-Congo State convention of 1891, which was subsidiary 
tothegeneralact of Berlin and the additional declaration oflSQO. i^Seep. 8^,) 

48 The agreement between France, Italy, and Great Britain for equaUty of treatment of transit trade upon 
any railway to be built across the Somali Coast into Abyssinia may be put down as an exception. A 
treaty of 1904 with France provided for the maintenance for 30 years of the' open door in Eg^pt. But this 
imposed no new limitations upon British action in that protectorate. Likewise no new limitations were 
imposed by the Franco-British treaty of 1906 relatiA'e to fhe New Hebrides. 

« "With the exception of duties on spirits and tobacco countervaiied by duties of excise there are no cus- 
toms duties which it is to the interest of any class of a community to maintain." ( Bruce : Op. cit., Vol. II, 
pp. 300, 301.) 

50 Ibid. 

" India and Egypt are among the colonies which derive a relatively smailpart of their revenue from cus- 
toms, namely, about 12 per cent. India adopted a revenue tariff only in 1894 and the rates remain low. 
Egypt's tariff rates are limited by treaty, on imports to 8 per cent and on exports to 1 per cent. 



BEITISH CEOWIT COLONIES. 293 

the proceeds were to be used in aid of agriculture,^^ directly or indi- 
rectly, including the stimulating of immigration. The fiscal needs 
caused by the war have compelled a wider use of export duties, 

TARIFF SYSTEMS OF THE CROWN COLONIES, 

The tariffs of the Crown colonies differ in the length of their sched- 
ules and the height of the rates and in the use of specific and ad 
valorem rates. The differences are of some importance, but of no 
such importance as the same differences would be in the case of tariffs 
framed to protect local industries or of tariffs discriminating against 
foreign countries in favor of the Mother Country or of tariffs so high 
as seriously to curtail consumption. The differences are due partly 
to the need for revenue which varies from colony to colony ancl from 
year to year. Other considerations are of greater importance in some 
cases. In the free ports the interests of commerce are the controlling 
factor, and customs duties are reduced to a minimum. In most of 
the colonies the desire to facilitate the development of the country 
leads to the exemption from duty of agricultural and other machinery 
and of many other necessities, such as railroad, telegraph, school, 
and church supplies. Again, the desire to restrict the use of alcohol 
and of opium leads to imposing high duties if not prohibitions upon 
the importation of these articles. 

For purposes of detailed consideration, the Crown colonies are 
divided in this study into six groups differentiated according to the 
extent of their tariff schedules, the use of ad valorem or specific rates, 
and the presence or absence of export duties; and India is treated 
separately. The differential duties, chiefly of recent introduction, 
are given extended consideration in a separate section following that 
on India,. (See pp. 336-370.) 

IV. Tariffs of the Crown Colonies — General Description 

BY Groups. 

In this, section IV, the Crown colonies are dealt with in groups. 
In regard to each group is given, first, general information as to the 
situation, area, population, and trade, and, secondly, a general descrip- 
tion of the tarift rates in force, with further details in individual cases 
regarding treaty restrictions and exceptions. Any preferential tariff 
arrangements are merely referred to, leaving them to be fully discussed 
in section VI. 

group 1. free PORTS, WHICH LEVY NO DUTIES EXCEPT ON LIQUORS 

AND TOBACCO GIBRALTAR, ADEN, HONGKONG, WEIHAIWEI, STRAITS 

SETTLEMENTS. 

SITUATION, AREA, POPULATION, AND TRADE. 

The simplest tariffs in the British Empire are those of the free 
ports. ^^ These free ports are located at strategic points on the great 
commercial routes, though this is not so clearly true of Weihaiwei, 

52 In British Guiana export duties were allowed under this head when they were imposed to bring in 
revenue to take the place of that sacrificed in effecting arrangements whereby the local agriculturalexports 
entered the American market free from the penalty duties of the McKinley tariff. See the Tariff Commis- 
sion's report on Reciprocity and Commercial Treaties, pp. 152, 189. 

53 Certain islands, such as Ascension and Tristan da Cunha, so unimportant as to be left without a gov- 
ernment, of course, have no tariffs. 



294 



COLOXIAL TAEIFF POLICIES. 



the latest addition to the group. ^'^ None of these ports has any 
important area attached to it pohtically, though Gibraltar is the only 
one entirely without adjacent territory under British control. Aden, 
with its dependencies, is credited with the largest area, but it is mostly 
desert; the real hinterland for the ports of the Straits Settlements is 
found in the Federated and the Protected Malay States. The Straits 
Settlements produce rubber, rice, and tapioca and contain the world's 
largest tin smelters f^ Hongkong refines sugar, builds ships, and manu- 
factures tobacco; Aden makes cigarettes and salt; otherwise the im- 
portance of these free ports is found alm_ost exclusively in their con- 
venience as transshipping centers. Tables 2 and 3 show their area 
and population, the relative importance of their trade, and the prom- 
inent position which they occupy among the shipping centers of the 
British Empire. 



Table 2. 



''ea, population, and trade of the free ports. 



Free ports. 



miles). ' *^-^"- 



Total trade 

(thousands of 

pounds sterling). 



{ Latest 
1913 year avail- 

i able. 



Straits Settlement 
Hongkong , 

Aden 3 

Gibraltar 

WeihaiTvei 




846, 000 



561,000 



60,000 

18.000 

150'. 000 



101,311 



(1) 



8,526 

(1) 

(1) 



1918. 
153,540 

1919. 
2 194,591 

1918-19. 
10,045 

(1) 



1 No figures available. No official record was kept of the trade of Hongkong until 1918. Supplement 
to Commerce Reports, No. 52e, Oct. 31, 1919, p. 13. 

2 Including imports from Chinese ports to the south of Swatow estimated at £27,000,000, imports on 
account of the colonial government or the British army or navy, bullion and specie imported during the 
first half of the year, and imports by mail and certain other items. 

« Including Perim and Solcotra. 



Table 3. 



-Shipping entered at the free ports in 1913, compared to that of the other impor- 
tant British colonial ports. (^ 



[In millions of tons.] 



Free ports. 


Tonnage. 


Other important British colonial ports. 


Tonnage. 


Straits Settlements: 
Singapore 


8.6 
4.4 
11.5 
6.3 
3.9 
.6 


Colombo (Cevlon) 


7.7 


Penang 


Valetta (Malta) . 


5.5 




Alexandria 


3.8 


Gibraltar 


Durban. 


2.7 




Cape To^-n 


2.5 


Weihaiwei^^. 


Bombaj'' 


2.2 






2.1 


Total 


35.3 


Montreal 


2.0 




Total. 






28.5 









a Gt. Brit., statistical Abstract of the Colonies, 1901-1915. 

i statesman's Year- Book, 1915. 

M The port of Weihaiwei, on the north coast of the Pro\ance of Shantung, China, was leased in 1898. 

t>^ Christmas Island, attached to the Straits Settlements, exports phosphates. 



BEITISH CROWN COLONIES. 295 

DUTIES ON LIQUOR AND TOBACCO ONLY. 

The duties levied in the free ports are confined to liquors and 
tobacco. ^^ In Hongkong wines and spirits have been dutiable only 
since 1911 and tobacco only since July, 1916, The rates in all these 
ports are specific. The classifications are fairly simple and not more 
than a score of rates appear in any tariff schedule. Even in Hongkong, 
where the brands of tobacco are listed by name, there are only five 
different rates for each of the classifications — cigars, cigarettes, and 
smoking mixtures. The rates, except the highest, were more than 
doubled in April 1921, 

In the Straits Settlements the importation of liquor is controlled 
by the department of monopolies. Prohibitions or severe restric- 
tions are generally in force upon the importation of opium and other 
drugs, and during the war there v/ere of course numerous other 
restrictions. For instance, from May, 1917, to December, 1918, motor 
cars other than trucks were allowed to enter the Straits Settlements 
only as licensed by the governor,^^^ 

GROUP 2, — COLONIES WHICH IMPOSE DUTIES ON LIQUOR AND TOBACCO, 

A FEW OTHER IMPORT DUTIES, AND EXPORT DUTIES MALAY STATES 

AND SARAWAK, ST. HELENA, FALKLAND ISLANDS, AND GILBERT 
AND ELLICE ISLANDS. 

SITUATION, AREA, POPULATION, AND TRADE. 

Nearly as simple as the tariffs of the free ports are those of the 
Malay States and Sarawak, St. Helena, the Falkland Islands, and 
the Gilbert and Ellice Islands, the chief difference being that the 
latter contain specific export duties. The majority of the '' States" 
of this group are on the Malay Peninsula, the 1,000-mile projection 
which extends southward from Burma and Siam almost to the 
Equator. On this peninsula, in addition to the Straits Settlements, 
are found the Federated Malay States (Pahang, Perak, Selangor, and 
the confederation of Negri Sembilan) and five other native States 
(Kedak, Perils, Kelantan, Trengganu, and Johore), which are often 
designated collectively as the Protected Malay States. Sarawak, 
on the Island of Borneo, is also a protectorate, as were the groups 
known as the Gilbert and the Ellice Islands until 1915, when they 
were annexed and united into a colony. These groups lie between 
Hawaii and Australia, somewhat nearer the latter. They export 
phosphates and copra. St. Helena lies 1,200 miles west of Portu- 
guese West Africa; and the Falkland Islands, about 400 miles east 
of Patagonia. The Falklands and their dependencies. South Georgia 
and the South Shetlands, are the center of the world's chief whaling 
grounds. Sarawak has mineral resources of which gold and oil are 
somewhat developed; rubber, however, is its leading export, and 
pepper, sago fiour, cutch and gutta joolatong may be mentioned. 
The Malay States have long produced half of the world's tin and in 
the last decade have rapidly developed to supply one-half of the 

56 An exception is an export duty of Is. 6d. per ton on fuel oil exported from Gibraltar. (Commerce 
Reports, May 12, 1920, and Oct. 31, 1921.) Tobacco has been dutiable in Gibraltar since Apr. 1, 1898; the 
rate was increased in 1916, 1918, and 1921, but the maximum is only 6d. per pound on cigars and cigarettes. 

&6a After Dec. 31, 1921, automobiles driven from the left side will not be registered. (B. T. J., Oct. 13, 
1921.) 



296 



COLONIAL TARIFF POLICIES. 



world's rubber." Both rubber and tin are consumed largely in 
the United States, and these items account for most of the demand 
v/hich led the United States to purchase $125,000,000 worth of 
materials from the Federated Malay States in a single year. The 
rapid growth of this trade is seen in Table 4. 

Table 4. — Imports of the Federated Malay States from and exports to the United States.^ 

[In thousands of pounds sterling.] 



Year. 


Imports 

from the 

United 

States. 


Exports 
to the 
United 
States. 


1906-1910 3 


401 
1,317 
2,007 


3,314 
15. 687 


1916 


1918 


25,289 







1 Grt. Brit., Board of Trade Journal, Jan. 1, 1920. 

2 Average. 



Tables 5 and 6 show the area and population of the colonies 
included in Group 2. 



Table 5. — Area 


a7id population of the 


colonies 


in Grov/p 2. 




Colony. 


Area 
(square 
miles). 


Population. 


Popula- 
tion per 


Total. 


White. 


square 
mile. 


Federated Malay States 


27,506 

23,486 

1 45, 000 

■ 7,500 

47 

208 


1,037,000 

930,000 

600,000 

3,240 

3, 600 

31.000 


2,600 
(?) 
(?) 
3,240 
3, 600 
4.- 4 


39 


Protected Malay States 


49 


Sarawak 


13 


Falkland Islands 


.4 


St. Helena. .. 




Gilbert and ERice Islands 2 


1.^0 










Total 


103,747 


2,605,000 




25.1 









1 The Statesman's Year-Book gives the figiue 42,000: the Colonial Office List, "about 50,000." 

2 Including Union, Fanning, and Washington; included in the colony by the Statesman's Year-Bool^ 

Table 6. — Total imports and exports of the colonies in Group f . 191S and 1918, 
[In thousands of pounds sterling.] 





Colony 


Imports. 


Expo 


-t.-i. 




i 

1913 


1918 or 
191S-19 


1913 : 


1918 or 

1918-19 


Federated Malay States... 




. .. .1 10. OSl 


8, 792 

2,578 

940 

b 1, 156 

91 

49 


17, 345 
a 968 ; 
1,460 i 

801 ; 

331 ! 

8 1 


26, 092 


Protected Malay States 




\ a 765 


6,579 


Falkland Islands 




1 243 


2,054 


Sarawak ... . . 




i 681 


6 1, 346 


Gilbert and Eliice Islands. 




! 104 


146 


St. Helena 




43 


64 


Total 


I 11,897 


13, 606 


20, 913 


33, 2S1 



a Incomplete. Kelantan and Trengganu onlv. In 1920 the imports of the Federated Malay States 
were £33,683,000. (B. T. J., Sept. 15, 1921.) 
b 1917-18. 
57 The total rubber production of Malaya (Malay States and Straits Settlements) was: 

Tons. 

In 1910 6, 504 

In 1913. 33, 641 

In 1916 99, 003 

In 1919 176, 839 

The w^orld's production in 1919 has been estimated at 327,000 tons. (Commerce Reports, July 10, 1920, 
pp. 205, 206.) 



BRITISH CEOWN COLONIES. 297 



Specific import duties and export duties. — The tariffs of these pro- 
tectorates and colonies include specific import duties on from a dozen 
to 20 classifications of liquors and tobacco, and not more than 4 
other items, of which kerosene is usually one; also, export duties, 
largely specific, on all or most of the exports of any importance. 
The number of items in the schedules of export duties varies, from 
2 in St, Helena and 3 in the Falkland Islands to about 45 in the 
Federated Malay States, according to the variety of products ex- 
ported. In St. Helena the two export duties are on flax fiber and tow, 
which constitute 80 to 90 per cent of the exports. In the Falkland 
Islands ^* the products of the whale fisheries constitute more than 
80 per cent of the exports, and export duties are levied on whale 
oil, seal oil, and guano. ^^ 

From the point of view of revenue, much the most important of 
the duties in this group is the export duty on tin and tin ore from the 
Federated Malay States. In 1918 it yielded £1,533,000 or nearly 
one-fifth of the total revenue of these States and more than two- 
thirds of the total customs revenue. The export duty on rubber 
yielded £263,000; the import duties on liquor and tobacco, £305,000. 
The minor items on the import and export schedules produced less 
than 4 per cent of the customs revenue. ^^ In 1918 the customs 
revenue of the Federated Malay States was 6.3 per cent of the total 
trade; in Johore the percentage was 4.15. 

Exceptions and details. — The four Federated Malay States have 
identical tariff schedules, except that Pahang has distinct import 
rates upon tobacco and snuff and some distinct export duties. As 
special war taxes, these States imposed import duties on mineral 
oils other than kerosene, on matches, and a rate of 10 per cent ad 
valorem on motorcycles, cycle cars, and bicycles, and their parts, 
including tires. ^^ A duty on matches is to be maintained as a pro- 
tective duty for the product of a factory recently established at 
Kuala Lumpur. Many of their export duties are ad valorem, and 
if these be taken as typical, it may be stated as a generalization that 
the rates on mineral and jungle produce are 10 per cent ad valorem 
and those on agricultural produce are 2^ and 3 per cent. 

Among the protected States, Kedah levies import duties on ani- 
mals and salt; Perils, on coconut oil; Trengganu, on thread (3 per 
cent) and piece goods; and Kelantan 25 per cent ad valorem on 
manufactured tobacco and 3 per cent on everything not covered by 
the nineteen items on the free list. 

St. Helena has a list of 25 wharfage dues, levied on casks, boxes 
according to size, bulk articles by the ton, and animals by the head. 
These dues bring in some revenue, but the figures, separate from 
other customs receipts, are not available. 

The various islands comprehended under the name Gilbert and 
Ellice Islands, situated between Australia and Hawaii, may be 
placed in this group, though they have no export duties. These 



6s Port Stanley in the Falkland Islands is a "free port." (Commerce Reports, July 10, 1920.) 

59 Sheep farming is practically the only industry of the Falkland Islands, other than whaling. The ex- 
port duties on wool and on other sheep "and cattle products were dropped when the present schedule was 
adopted on Oct. 1, 1919. 

60 Report for 1918 on the Federated Malay States, Cmd. 469. 

«i Between May 1917 and December 1918, the importation of motor cars and accessories into the Federated 
Malay States was prohibited, except under Government license. 



298 COLONIAL TARIFF POLICIES. 

islands have import duties on explosives and oils, and on clothing 
or materials for clothing, on perfumery, and on jewelry 12 J, 15, 
and 20 per cent, respectively.®^ Brunei recently extended its free 
list, but imposed a rate of 100 per cent on dyestuffs.®^ 

Preferential rates. — The export duties on tin ore from the Federated 
Malay States include an important differential duty which is dis- 
cussed on page 337. It is a prohibitive duty on all tm ore exported 
without satisfactory guarantees that it will be smelted in the Straits 
Settlements, Australia, or the United Kingdom. 

In the Falkland Islands bottled wines are dutiable at 4 shillings 
6 pence per dozen of '^reputed quarts." British wines, however, are 
dutiable at only 3 shillings per dozen. In the Gilbert and Ellice 
Islands, British wines are not explicitly mentioned, but a special 
classification seems intended to favor certain Australian, New 
Zealand, and South African wines. The extent to which these 
classifications constitute a real preference will be discussed later. 
(See p. 358.) In the Falkland Islands the exemptions include 
^' tobacco forming an ingredient in sheep wash or hop powder manu- 
factured in bond in the United Kingdom." 

GROUP 3. — COLONIES WHICH IMPOSE A UNIFORM AD VALOREM IMPORT 
DUTY, WITH TREATY RESTRICTIONS IN SOME CASES, AND VARIOUS 

EXPORT DUTIES EGYPT, SUDAN, SOMALILAND, KENYA ^* AND 

UGANDA, ^^ ZANZIBAR, NYASALAND, AND BAHREIN ISLANDS, 

The tariffs of the British possessions in East Africa have a great 
similarity, particularly as to import schedules. This similarity is 
explained by historical causes — see the treaty obligations mentioned 
below — rather than by any great similarity of their economic con- 
ditions or of their political status. The political status of these 
territories is indeed very dissimilar. Kenya, ®^ Nyasaland, and 
Somaliland are colonies;^*' Zanzibar and the Bahrein Islands are 
protectorates, and Egypt and the Sudan are sui generis. The status 
of Egypt can not be discussed here; for even since the announce- 
ment of the British protectorate in December, 1914, and the termina- 
tion of the payment of tribute to Turkey, the position of Egypt 
remains anomalous in respect to the treaty rights of other powers.®' 
The Anglo-Egyptian Sudan is under the condominium of Great 
Britain and Egypt, according to the Anglo-Egyptian treaty of Jan- 
uary 19, 1899, but the final authority rests in the governor general, 
who may make, alter, or abrogate laws, orders, and regulations. 
(Art. IV of the treaty.) ®^ 

62 Before 1910 the only duties in these islands were on alcoholic beverages and perfumes, therefore their 
tariff then belonged in the class of group 1. Kerosene and tobacco were added in 1910, and the other 
articles mentioned in 1916. 

63 Board of Trade Journal, Oct. 28, 1920, p. 522, 

61 From July 23, 1920. the Protectorate of British East Africa was annexed as Kenya Colony, with the 
exception of the " Seyidie," a strip 10 miles wide along the coast, which is designated Kenya Protectorate. 
This strip has been held in lease from the Sultan of Zanzibar since 1S90. The new name is taken from 
Mount Kenya, a glacier-clad peak attaining 17,000 feet above sea level and second only to Kihmanjaro 
among African mountains. The Times (London), July 8, 9, and 29, 1920. 

6» Kenya and Uganda, though otherwise distinct colonies, form a single customs unit. 

66 See the introductory chapter, p. 5. 

67 For instance, under the capitulations foreigners of 14 nationalities escape taxation. As there are large 
numbers of foreigners and they hold a not insignificant fraction of the real and personal property of the 
country it is not considered feasible to impose taxes which would make an obvious discrimination in 
their favor against the natives. In 1917 foreigners held 713,000 feddans; natives 4,773,000. (Feddan=1.038 
acres.) Another anomaly is that the official organ of the Government is stUl pubUshed in French. 

ea Hertslet: Map of Africa by Treaty, Vol. II, p. 621. 



BEITISH CEOWN COLOISriES. 299 

The African colonies in Group 3 extend more than 3,000 miles from 
north to south. Most of Egypt is in the north temperate zone; the 
Sudan, Uganda/ and Nyasaland stretch across the tropics to 17° 
south. Som_aliland is also tropical, lying between 8° and 11° north. 
The natives of Nyasaland are Bantus (Negroes), but in Uganda, 
Kenya, the Sudan, and Somaliland there are strong admixtures and 
many tribes of other races — Masais, Swahilis, Somalis, Gallas, Arabs, 
etc. In Zanzibar, it has been said, Africa, Arabia, Persia, and India 
meet. A large part of the trade of East Africa is in the hands of 
East Indians, of whom there are about 10,000 in Zanzibar, 17,000 in 
Kenya, 3,500 in Uganda and 500 in Nyasaland. ^^ 

With the exception of Egypt, which receives special attention 
below, the development and exploitation of these territories has only 
begun. Most of the tropical colonies in this group contain elevated 
plateaus suitable for the settlement of whites, notably the central 
part of Kenya, and the Nyasaland Highlands which form the greater 
part of that colony. Uganda is a country for ''planters" rather 
than for ''settlers." 

These colonies may have important mineral resources, but the only 
ones which have been developed even to a small extent are the 
carbonate of soda and mica oi Kenya and the gold of the Sudan. 
The natives of Uganda work the hematite iron ore which is widely 
distributed in that colony. The Bahrein Islands are the center of 
the world's largest pearl fisheries. With these relatively small 
exceptions the colonies depend exclusively upon agricultural and 
pastoral pursuits. Zanzibar produces three-fourths of the world's 
cloves and some copra. Somaliland produces hides, gums and resins, 
and salt. The plantations of Kenya,*'^'* Uganda, and Nyasaland 
yield numerous tropical and semitropical products — coffee, rubber, 
cotton, sisal hemp, and copra. The natives of Uganda have begun 
to cultivate cotton, and it is estimated that there is more land suitable 
for cotton in that colony than in Egypt. "American upland" is the 
only variety grown; the quality is reported to be "a little below that 
of Egyptian and a good deal higher than any other African or Indian 
staple." ^^ Maize, wheat, and other products of temperate climates 
are grown in East Africa, and black wattle is becoming of importance. "^^ 
The Nyasaland planters have largely abandoned coffee, and con- 
centrated their efforts on tobacco, cotton, and tea. The Sudan is one 
of the chief sources for gum arable and ivory. It exports also dura, 
sesame, and cotton. The British Government has guaranteed the 
interest on £6,000,000 to be invested in irrigation works to promote 
the growing of cotton; but the war delayed the execution of the plan. 
Throughout the whole region, where the tsetse fly does not prevent, 
the natives raise cattle, sheep, and goats, and in some districts 
Europeans also are engaged in stock raising. 

With the exception of the oil-seed crushing and cigarette-making 
industries of Egypt none of the colonies of this group has any manu- 
facturing industry. '^2 Accordingly, all the manufactured goods used 

89 And 15,000 in Tanganyika (formerly German East Africa). 

69a Kenya is credited vatli a potential annual output of 500,000 tons of sugar. 

1^ Quoted in Commerce Beports, May 26, 1920, The Commerce Report continues: "The present price 
in Manchester is about 20d. (40 cents) higher than for 'middling American' cotton, i. e., about 4s. (97 cents) 
a pound. This year's crop is estimated at 50,000 bales." 

" The bark of the wattle is used in the tanning industry. 

*2 There is one cotton mill in Egypt, and some of the product of hand looms is exported. At Zeila in 
British Somaliland there are extensive salt pans. Two soap factories are found at Zanzibar. There are 
doubtless other small factories of purely local importance. 

185766°— 22 20 



300 



COLOI^IAL TARIFF POLICIES. 



by the European population and a considerable part of the foodstuffs 
are imported; the demand on the part of the natives increases the 
market particularly for cotton piece goods, salt, sugar, kerosene, 
matches, and hardware. The relative importance of the colonies 
in Group 3 is suggested by the figures in Tables 7 and 8. 

Table 7.— Area and population of the colonies in Group 3. 



Colony. 


Area 
(square 
miles). 


Population. 


Popula- 
tion per 


Total. 


European. 


square 
mile. 


■^,^^^. /total 


1350,000 

12, 226 

1,014,000 

s 208, 000 

6 109,119 

1,020 

39,573 

68,000 

10 200? 


212,750,000 


3 150,000 


35 


Egypt,|i^^j^^^ij.g^ ^j.g., 


1,039 
3 


Sudan 


4 3,400,000 

5 2,796,000 
7 3,361,000 

8 198, 000 
1,027,000 
^300,000 
9 103, 000 


(?) 

5,337 

850 

200 

724 

(?) 

(?) 




11 


Usfanda . 


31 




194 


Nvasaland 


29 




4 


Bahrein Islands . . 


500? 






Total 


1,789,912 


23, 935, 000 


160, 000 


13 







1 According to L'Airiq^ue PranQaise (Juh-, 1920, supplement, p. 132, quoting Idea Nazionale, May 16. 
1920), Great Britajn has agreed to cede to Italy the territory west of 25° E., apparently between 100,000 and 
150,000 square miles. 

2 Census of 1917. 

3 The foreign population by the censiis of 1907 was 151,000, including 1,000 Persians and 5,000 of other 
nationalities not separately mentioned in the Statesman's Year-Book. 

4 Estimated, 1917. 

5 The area of Kenya ls given as 246,822 square miles, but about 38,500 of this has recently been ceded to 
Italy to carry out the treaty of London. The population of this territory in 1917 was 11,000, including 25 
Europeans. '(L'Afrique Ffangaise, July, 1920, supplement, p. 133.) 

6 Including 16,377 square miles of water. 
7 191 8^ 

8 1910. 

9 Estimated. 

10 The main island is 27 miles long and 10 miles broad. There are also several insignificant islets. 

Table 8. — Imports and exports of the colonies in Group 3, 1913 and 1918. 
[In thousands of pounds sterling.] 



Colonv. 



Egypt, 1918... 

Sudan, 1918 

East Africa, 1918-19 

Uganda, 1918-19 

Zanzibar, 1918 

Nvasaland. 1918-19 

Somaliland, 1918-19 

Bahrein Islands, 1918-19 

Total 



Imports. 



1913 



38,637 
2,198 

12,148 

1 i , 021 
1,103 
1209 
1249 

11,878 



47,443 



1918 or 
1918-19. 



53,060 
4,124 

3,398 

2,366 

2 648 

222 

1,350 



65,168 



Exports. 



1913 



44, 508 
1,488 
1 1,483 
1607 
1,049 
1266 
1225 
11,740 



51,366 



1918 or 
1918-19. 



46, 510 
4,022 
1,251 
1,247 
2,134 
2 505 
348 
1,318 



57,335 



1 Fiscal year ended Mar. 31, 1914. 



Excluding bullion and specie. 



Egypt deserves more extended consideration because of its im- 
portance both as a market for manufactured goods and as a supplier 
of raw materials. It is a relatively well developed country support- 
ing a very dense population. And while the rate of growth of its 
trade is less than that of many colonies whose development has only 
begun, the volume of its trade is so great that the annual increase 



BKITISH CEOWI^ COLOlSriES. 



301 



in absolute figures is greater than the total trade of many of the 
minor colonies. In the importance of its trade, Egypt ranks rather 
with the Dominions than with the Crown colonies, for its total is 
larger than that of New Zealand and roughly equal to that of South 
Africa. The recent growth of Egyptian trade is shown in Table 9. 

Table 9. — Trade of Egypt in selected years. 

[In thousands of Egyptian pounds.i] 



Year. 


Merchandise.2 


Specie. 


Imports. 


Exports. 


Imports. 


Exports. 


1910 . 


23,553 
27,865 
30, 887 

3 37,310 
47, 410 

101, 881 


28, 944 
31,662 
37, 462 
45, 370 

75, 888 
85, 467 


12,964 

9,796 

1,370 

611 


7,046 
11,138 


1913 


1916 . 


133 


1918 


5 


1919 4 




1920 5 















i£E. =$4.9431. 

2 Excluding reexports and transit trade. In 1918 the reexports were £E. 1,379,000 and the transit trade 
£E. 14, 312, 000. 

3 Excludingfrom the published figure (£E. 51,155,000) the item of bunker coal (£E. 13,845,000), which was 
Included in the total only in 1918. 

4 Commerce Reports, Apr. 28, 1920. 

5 B. T. J., Mar. 17, 1921, p. 301. 

Egypt owes its prosperity principally to the long-staple cotton, 
of which it has a monopoly.'^^ From this cotton are made the finest 
threads and the toughest cotton textiles. It is in great demand for 
the manufacture of tires, and the United States consumes large 
quantities. Cotton regularly forms about 80 per cent of Egypt's 
total export. Cotton seed is next in importance. Only enough 
of the seed is crushed locally to supply the home demand for oil, and 
normally the resultant oil cake is all exported.^"* Cotton is raised 
largely on a three-year rotation, and the area planted in anyone year 
never reaches one-third of the total area in cultivation. Maize, 
wheat, barley, millet, vegetables, rice, and sugar are the other chief 
crops, but Egypt is not self-supporting in f oodstuff s, and the Govern- 
ment in times of shortage restricts the cotton acreage. "^^ Egypt 
exports rice, onions and other vegetables, cereals and eggs, and 
imports flours, sugar, meats, and many other foodstuffs. After 
cotton and cotton seed the most important of the minor items of the 
export trade are cigarettes and hides and skins. The ^'Egyptian" 
cigarettes are made from imported Turkish (Greek) tobacco.'^ 
Cigarette making and crushing of cotton seed are Egypt's two chief 
industries.'^' 



7* A small quantity is grown in the West Indies and along the Atlantic coast and in the southwest of the 
United States. 

"'* During the war the oil cake was not exported and much was used for fuel; the price of coal reached 
$75 a ton. See Commerce Reports, Jan. 3, 1920. 

75 Otherrecent measures have been the exemption from duty of wheat and a restriction upon the number 
of eggs which may be exported. (Journal Officiel, Oct. 23, 1919. B. T. J., Dec. 11, 1919, p. 739.) The 
acreagenormallyin cottonis 1,700,000. Itisestimatedthatirrigationand drainage works may add 1,300,000 
acres, bringing the total to 3,000,000 acres annually in cotton. (Commerce Reports, Feb. 26, 1920.) For 
1921 the cotton planting has been limited to one-third of each holding. (The Times (London), Dec. 9, 
1920, Manchester Guardian, Dec. 18, 1920.) 

''^ In 1890 the cultivation of tobaccoin Egypt was prohibited. At the same time a Government monopoly 
was estaoJished in tombac (coarse Persian tobacco), but this monopoly expired June 30, 1919. (B. T. J., 
July24, 1919, p. 131.) 

" For recent information on the industries of Egypt see The Times Trade Supplement, Jan. 22, 1921, 
p. 433, Commerce Reports, May 11, 1921, and B. T. J., Sept. 29, 1921, p. 302. 



302 



COLONIAL TARIFF POLICIES. 



The principal imports and exports for the year 1919 are shown 
in Tables 10 and 11. 

Table 10. — Chief imports of Egypt during the calendar year 1919.^ 
[In thousands of Egyptian pounds.] 



Article. 


Value. 


Article. 


Value. 


Textiles: 

Cotton — 


11, C87 

1,395 

645 

861 

781 
519 

796 

756 

2 3, 001 

2,856 

1,426 

897 


Mineraloils: 

Kerosene 


1,711 


Piece goods 


Gasoline 


536 




Meats 


1,016 


Other manufactures. 


Paper and cardboard (excluding manu- 




Woolen cloth 


950 


Silk cloth 


Coffee 


811 




Wheat flour 


779 


Apparel (ready-made clothing and 

under-clothing) 

Hosiery 


Fruits, dried, and nuts. . 


683 


Jute sacks 


586 


Vegetable oils . . . 


593 


Coal 


Soap 


570 


Tobacco, leaf . . 


Ironmongery. . 


504 


Chemical and medical products and spe- 


Sugar 


495 


cialties: 


AU other articles 


13, 153 


Fertilizers artificial 


Total 




Medicinal preparations and special- 


47, 410 


ties and other chemical products. . 







1 From the official statistics. See also the Review of Egyptian Trade for Three Years, 1913, 1918, and 
1919. Commerce Reports, Feb. 7, 1921, pp. 744-749. 

2 Bunker coal to the value of £ E. 13,715,000 is included under transit trade. There is also a transit 
trade in gasoline and other oils, bringing the total for 1919 to £ E. 14,419,000. 

Table 11. — Chief exports of Egypt during the calendar year 1919. 
[In thousands of Egyptian pounds.] 



Article. 


Value. 


Value. 


Value. 


Raw cotton 


65, 442 
3,014 
1,032 
694 
655 
571 
551 
425 


Cottonseed cake 


412 


Cotton seed 


Gum arable 


359 


Cigarettes 


Eggs . 


282 






240 


Sugar 


All other articles . . . 


2,211 




Total 




Rice 


75, 888 


Onions 











Cotton is the predominant import of the United States from Egypt. 
The only other item deserving mention is gum arabic of which one- 
third (1918) is exported to the United States. The principal exports 
from the United States to Egypt are machinery, iron and steel manu- 
factures, leather and its manufactures, haberdashery and furnishing 
goods, toys, stationery, and notions. Tables 12 and 13 show the 
division of the import and export trade of Egypt among the larger 
commercial countries in the last two years and the amount of cotton 
sent directly from Egypt to the United States and other countries 
in recent years. 



BEITISH CEOWN COLONIES. 



303 



Table 12.— Distribution of the trade of Egypt in 1919 and 19W.^ 
[In thousands of Egyptian pounds.] 



Country. 


Import 


s from. 


Exports to. 


1920 


1919 


1920 


1919 


United Kingdom... • 


37, 894 

483 

3,338 

4,900 

244 

582 

1,322 


21, 840 
435 
2.347 
1; 848 
33 
598 
502 


36, 343 
167 
747 
91 
2 
94 
56 


40 222 


British Mediterranean possessions 


292 


British India 


587 


Australia and New Zealand 


48 


Canada 


1 


Other British possessions in Far East. . 


34 


British posessions in Africa 


26 






Total British Empire 


48, 763 

1,927 

2,057 

2,325 

6,104 

1, 186 

2,085 

649 

5, 705 

2,264 

784 

526 

871 

1.639 

324 

449 

722 

1,549 

1,174 

10, 751 

3,111 

6,916 


27, 603 

202 

1.098 

1:317 

2,390 

6 

1,893 

186 

2,512 

1,729 

744 


37, 500 

324 

6 

19 

8,069 

1,294 

413 

332 

3,303 

1,236 

568 

8 

1 

19 

1,299 

28 

528 

2,246 

358 

28, 469 

7 

1,440 


41,210 


Belgium 


207 


Chile 


5 


China.. 


25 


France 


5,871 


Germany . 


243 


Greece 


696 


Holland,. . . 


277 


Italy 


3,499 

1,864 


Japan 


Palestine 


744 


Roumania 


10 


Russia . 


25 

443 

265 

4 

367 

455 

631 

2,899 

25 

2,616 




Sweden 


56 


Spain . . 


822 


Servia 


34 


Syria . .... 


697 




1,811 


Turkey ; 


330 


United States of America 2 


16, 714 


Other countries in America .... 




Total other countries 


3,770 






Grand total 


101, 881 


47, 410 


85, 467 


78, 888 







1 B. T. J., Mar. 17, 1921, p. 301. 

2 Exports from the United States to Egypt were recorded in 1920 and 1919, respectively, as $38,123,000 
and $15,076,000. Imports from Egypt for the same periods were 397,015,000 and $39,629,000. (Commerce 
Reports, Feb. 14, 1921.) 



Table 13 


. — Expo 


rts of Egyptian cotton,^ 1912-1919. 






Country of destination. 


1912-13 


1913-14 


1914-15 


1915-16 


1916-17 


1917-18 


1918-19 


England 


Bales. 
426, 853 
124, 634 
87, 014 
77, 177 
53, 573 
75, 740 
36, 609 
36, 528 
21, 356 


Bales. 

437, 820 
89, 723 
88, 033 
99, 943 
52, 094 
78, 556 
35, 309 
35, 948 
20,391 


Bales. 
367, 774 
176, 974 
24, 412 


Bales. 
350, 144 
185, 497 
42,390 


Bales. 
346, 196 
134, 891 
. 28,063 


Bales. 

503, 196 
75, 865 
35, 819 


Bales. 
459,774 
95, 262 


United States 


France 


69, 620 


Germany... . 




Austria 












Russia 


45, 109 

111,436 

59, 537 

17, 353 


45, 834 
18, 193 
37,934 
25, 728 


32,446 
19, 456 
35, 270 

20,682 






Switzerland 


8,741 

140 

18,218 


23, 201 


Italy 


34, 994 


Japan. 


22 160 






Total 


958, 883 


970, 263 


832, 721 


728,319 


630, 610 


714, 1S2 


718,309 







1 Commerce Reports, Feb. 10, 1920. 



TAJUFFS, 



Treaty restrictions. — The similarity in the tariffs in the East African 
colonies may be due in part to the fact that Nyasaland, Kenya 
(British East Africa), Uganda, and Zanzibar are subject to the gen- 
eral act of the conference of Berlin, 1884-85, which, as amended at 
Brussels in 1890 and later, allows no import duties greater than 10 
per cent'^ ad valorem, except on arms and alcohol. On alcohol in 

^* See page 120 for the proposed revision of this treaty, omitting this hmitation. The restriction in the 
case of Zanzibar is contained also in the treaty of May 31, 1902, between the United States and Zanzibar. 
By a treaty of the following year (June 5, 1903) the light and harbor dues of Zanzibar are also limited to 
certain maximum rates. The text of these treaties may be found in Malloy: Treaties, Conventions, etc., 
Vol. I, pp. 784, 785. 



304 COLOXIAL TAEIFF POLICIES. 

these same territories and north as far as to include the chief ports 
of the Sudan, the minimum rate was fixed by the various treaties 
of Brussels. In Egypt the rate of duty is limited by old treaties 
which date before the English occupation. 

Imjport duties. — The import duties of this group consist of a single 
ad yalorem rate of from 5 per cent to 20 per cent which is applicable 
to all or most dutiable articles other than liquors. These general 
rates (see addenda on page 371) are as follows: 

Per cent. • Per cent. 

In Zanzibar. s^ 10 

In Nyasaland (British Central 

Afri^^, 8^15 

In Kenva and Uganda 20 



In Bahrein Islands 5 

In Somaliland 7 

InEffvpt 79 g 

InSudan s'^ 8 



The free lists differ greatly in extent. In Kenya, Uganda, and Nya- 
saland most commodities which relate to the deyelopment of agri- 
culture and transportation are admitted free. The total duties col- 
lected in British East Africa (now Kenya) according to the figures 
for the fiscal year 1913-14 came to only 5.4 per cent of the total trade, 
in spite of the general import rate, then 10 per cent, i. e., the free list 
covered about half of the total trade. For 1917-18 and 1918-19 
similar percentages were 5.6 and 4.6. In Zanzibar and Somaliland 
the exemptions are less numerous and in Egypt the only articles 
which enter free regardless of their destination or use are chemical 
fertilizers, books, and printed matter. But in all these colonies 
imports on behalf of the Government and the British Army are free 
and there are further exemptions for the benefit of consular and dip- 
lomatic functionaries, and in Egypt for certain members of the clergy, 
the Suez Canal Co., the Salt Co. of Rawaya, and the Societe des 
Eaux deCaire.®^ 

Export duties. — The export duties of this group are various. 
Kenya (including Uganda) and Somaliland have general rates, re- 
spectively, of 10 and 7 per cent, with a few specific rates, but planta- 
tion produce is generally free of duty.** Nyasaland has long had spe- 
cific rates on three valuable products, including gold and ivory, and 
recently duties have been imposed on plantation produce also;*^ the 
Sudan has a rate of 1 per cent both for exports and as a transit duty; 
Zanzibar has half a dozen items of 5 to 15 per cent and one of 25 per 
cent, while in Egypt a rate exceeding 1 per cent vvould be contrary 
to treaty.*^ 

Exceptions and special provisions. — Free ports. — Port Said, at the 
entrance of the Suez Canal, has a large free zone. The port of Zeyla 
in British Somaliland is practically a free port; except on alcoholic 
liquors it has no import duties higher than 5 per cent, and except for 

79 Ten per cent at place of shipment, increased by from 5 per cent to 25 per cent according to the kind of 
commodity and place of origin. (Kelly's Customs Tariffs of the World, 1920, p. 40.) 

so Valuations are given in tables agreed upon by the merchants and the Government, and are sometimes 
revised several times within the same year. 

81 Valuations are given in official tables. 

82 " The words 'ad valorem' shallbe taken to refer to the value of goods as they he at the port of shipment 
exclusive of trade discomits and of freight, insurance and other charges." 

83 Pegna, Enrico: Regime Douanier de TEgj^te et ses Reformer Possibles, L'Eg3mte Contemporaine, 
1917, pp. 425-466, (P. 442.) 

8* All export dutv of £1 per bale on cotton from Uganda was imposed for the year 1918-19, but was not 
renewed. The Times Trade Supplement (London), June 5, 1919. p. 414. 

85 By the governor's order of Mar. 31, 1920, effective the next day, cotton and tobacco are dutiable at 2d. 
per poimd and tea at id.; but ''if an exporter of cotton or tobacco gro^\'n bv the exporter can satisfy the 
customs officer * * * that the total quantity of the product exported grown by him in year of export 
does not exceed 5 tons, duty on that product shall be charged at half the above-melitioned fate." 

86 A protocol of Aug. 10, 1921, contains the assent of Belgium to an export rate of 2 per cent. 



BRITISH CEOWIs^ COLOI^IES. 305 

the specific rates, on animals it has on exports only a general rate of 
1 per cent. On the textiles most commonly imported the rate is 
only 2 per cent. This is also the rate on wines and malt and alco- 
holic liquors bound for Harrar in Abyssinia. Goods sent from 
Zeyla to other customs ports of Somaliland pay there the difference 
in the rates of duty, 

Egypt. — The very limited free list found in the tariff schedule of 
Egypt" is accounted for by the financial straits of its Government. 
As it has not been feasible to introduce many varieties of taxation 
and as the import duties are limited by treaty to 8 per cent ad valo- 
rem, fiscal necessity has compelled the exaction of this rate upon the 
greatest possible amount of commerce. In 1905 a fiscal concession 
was, however, made by the reduction to 4 per cent of the rate upon 
fuels, building timber, and some live stock. The continuance of this 
concession was rendered impossible by the war. In 1915 advantage 
was taken of modification of Egyptian treaty obligations to increase 
the rate on alcoholic liquors to 10 per cent ad valorem.*^ About 50 
per cent of the total customs revenue of Egypt is obtained from the 
duties on tobacco. ^^ The present rate (decree of October 4, 1921) 
on leaf tobacco is 800 milliemes per kilogram or 900 milliemes for 
leaves stripped of their stems, stalks, or median ribs.^^ There is an 
additional 20 milliemes in case it comes from a country which has 
made no special arrangement with Egypt, the difference amounting 
to over 4i cents a pound. (See p. 371.) 

Imports into Egypt pay an additional duty of one-half per cent as 
a municipal tax and there is a further one-half per cent on imports at 
Alexandria. (See p. 371.) 

Sudan. — In the import tariff schedules of the Sudan the uniformity 
of the 8 per cent rate is broken by several exceptions as follows : 

Spirits and liqueurs per cent. . 40 

Champagne and sparkling wines do 25 

All other wines do 15 

Beer and stout. do 10 

Coal, charcoal, firewood, and petroleum do 4 

Unwi'ought timber, except mahogany and other rare woods. do 4 

Oxen, cows, sheep, and goats and the fresh meat of these animals do 4 

Tobacco and tombac in the leaf milliemes per kilo. . 500 

Tobacco and tombac, stripped, cut, or manufactured; cigars and cigarettes. do 600 

The Sudan admits products of the neighboring territories at special 
rates. Imports from Egypt enter free; likewise exports from the 
Sudan are free if destined for consumption in Egypt. Products of 
Uganda, Italian Eritrea, and the French or Belgian Congos, intended 
for consumption in the Sudan, enter upon payment of 5 per cent ad 
valorem. Products of Abyssinia enter upon payment of 6 per cent 
ad valorem. ^*^ Products of all the places named, however, pay 
duties equivalent to any royalty taxes paid by like articles the prod- 
uct of the Sudan, in case the royalty is greater than the duty other- 
s' A like increase in the rate on sugar was agreed to by the countries other than Russia, whose treaties 
limit the Egyptian tariff. This treaty with Riossia was effective from the 20th of June, 1909, mitil the 31st 
of December, 1918, and since that time has been terminable on 12 months' notice from either party. (Brit, 
and For. State Papers, vol. 102, pp. 97&-1011.) Specific duties on alcoholic liquors, except wines and beer, 
were decreed from June 27, 1921, (B. T. J., July 21, 1921.) 

83 See the article by Enrico Pegna previously cited, p. 463. The revenue obtained from tobacco was in 
1890 £ E. 765,000, in 1916 £ E. 2,116,000. Though the bulk of the imports were dutiable at only 8 per cent, 
the revenue collected on all imports was in 1913, 13.9 per cent and in 1917, 16 per cent of the value of the 
merchandise imported. 

89 A millieme is one-tenth of a piaster or one-thousandth of an Egyptian gold poimd (£ E. 1) and is there- 
fore almost equivalent to one-half of a cent. Cigars are dutiable at 700 milUemes. The drawback on the 
tobacco in exported cigarettes is 400 milliemes. 
»o Special Consular Reports, No. 81, Abyssinia, p. 65. 



306 



COLOXIAI. TARIFF POLICIES. 



wise leviable. According to an ordinance of 1904 these royalty 
duties are leviable upon gum, ostrich feathers, india rubber, and 
gutta-percha at the rate of 20 per cent ad valorem and on ivory and 
rhinoceros horn at 15 per cent. The governor general was authorized 
to modify these rates but in no case should they be less than 10 per 
cent or exceed 20 per cent.^^ 

Zanzibar, — Zanzibar includes in its free list dairy products. By a 
customs ruling of November 10, 1911, '^ dairy produce" was held to 
mean fresh dairy produce of East Africa. ^^ 

GROUP 4. COLOXIES WHICH IMPOSE AD VALOREM AXD SPECIFIC 

IMPORT DUTIES AXD SOME EXPORT DUTIES IX WEST AFRICA: 

GAMBIA, SIERRA LEOXE, GOLD COAST, XIGERIA; IX OCEAXIA ! XEW 
HEBRIDES, SOLOMOX ISLA.XDS, TOXGA OR FRIEXDLY ISLAXDS. 

WEST AFRICA. 

The British possessions on the west coast of Africa are, from west 
to east and from the smallest to the largest, Gambia, Sierra Leone, 
the Gold Coast, and Nigeria. Gambia, the oldest of these possessions, 
is a mere strip along the river of the same name, extending some 250 
miles into French West Africa. Its average breadth is only 16 miles. 
Though the river is practically the only means of communication, 
the colony is better provided than many others, for the river is navi- 
gable by light ocean-going vessels for 150 miles and by river boats 
for 200 miles farther. The other three colonies as may be seen from 
Table 14 are of substantial size. 

Table 14. — Area and j)opulation of the West African coloniis.^ 



Colony. 


Area 
(sqiiare 
miles). 


Population. 


Popula- 
tion per 


Total. ' White. 


square 
mile. 


Nigeria . . 


332, 000 
80,000 
31,000 
4,500 


16,750,000 

2 1,50:3,000 

1,403,000 

^ 208; 000 


2,700 

3 2,206 

2 702 

■>150 


50 


Gold Coast 


19 


Bierra Leone 


45 


Gambia .... 


46 






Total 


447, 500 


19, 864, 000 


5, 758 


44 







1 Statesman's Year-Book, 1920. The areas and populations of these colonies have not been definitely 
determined. For instance, the Colonial Office List gives the area of Gambia as 4,000 square males, and the 
population of Isigeria is sometimes set at 17,500,0Q0. 

2 1911. 

3 1915. 

< Colony, 8,000: protectorate estimated at 200,000 (Colonial Office List, 152,000). 
£ Ladd," Diirant Person: Trade and Shipping in West Africa, 1920. 

The West African coast is generally low and the Gold Coast has 
been called the white man's grave. Officials and traders usually 
remain not longer than a year at a time. The country does not rise 
to a plateau ®^ as does eastern and southern Africa, but as it approaches 
the Sahara it becomes higher and drier and the tropical forests of 
the coast are replaced by rolling savannahs and even by stretches of 



ei Kelly's Customs Tariffs of the World, 1920, p. 142. 

w In the Colonial Import Duties, 1911, the expression is East Africa and Uganda. Since Zanzibar had 
adhered to the general act of the conference of Berlin and was therefore debarred from levying discrimina- 
tory duties It would appear that the term East Africa muse in this case apply to the East African coast 
generally. 

>3 Except the Bauchi Plateau in northern Nigeria, which reaches an elevation of 5,000 to 5,500 feet. 



BKITISH CKOWN COLONIES. 307 

sand. The northern lands of the Gold Coast and of Nigeria are 
agricultural and pastoral. Nigeria has the possibility of becoming 
one of the world's great • colonies. It has an area equal to that of 
the United Kingdom and France combined, and its people are in 
large part intelligent Hausas who have been organized by their Fulani 
rulers into stable native States of considerable economic development. 
The Fulanis — an olive-skinned people of uncertain origin — are horse- 
men and raisers of cattle.- The Hausas are agriculturalists, craftsmen, 
and traders. The largest of the native States is Kano. This centers 
around a walled city of 40,000 inhabitants, now the terminus of the 
railway from Lagos and the center of the groundnut (peanut) trade, 
but long prosperous as a manufacturing city as well as through its 
commerce by caravan. The native craftsmen are skilled in making 
cotton cloth, leather,^^ pottery, and iron and copper tools and utensils 
such as the ^^Hausa hoes.'' 

Resources and trade. — The British West African colonies are pri- 
marily agricultural, although Nigeria and the Gold Coast have im- 
portant mineral resources. In northern Nigeria about 200 Europeans 
and some 22,000 natives are engaged in tin mining. The output of 
coal at Udi (the present terminus of the railway from Port Harcourt) 
is about 400 tons daily. ^^ Alluvial gold is worked, and potash, lead, 
silver, and manganese have been located. The Gold Coast has long 
produced considerable quantities of gold and has large resources in 
manganese and bauxite (aluminum ore). During the war manganese 
was shipped from the Gold Coast to Great Britain. Other resources 
of West Africa are the cattle of northern Nigeria, estimated at 
3,000,000 head, and the timber of the coast regions of which the 
mahogan^^ of the Gold Coast has been chiefly exploited. 

Agriculture in West Africa is wholly in the hands of the natives. 
There are no European plantations, though numerous experiment 
farms are maintained by the Governments. Some of the chief 
products grow wild and receive little if any care — oil palms, rubber, 
and shea nut trees; but the groundnuts, cocoa, and cotton are culti- 
vated crops. The development of cocoa raising in the Gold Coast has 
been most remarkable. Cocoa was introduced about 1890 and made 
no great progress for a number of years. In the last 20 years, how- 
ever, the development has been very rapid, and the quantity produced 
in 1919 is estimated at one-half of the world's total. The quality is 
inferior but the price received has been sufficient to cause the native 
to neglect other crops and to rely increasingly upon imported food- 
stuffs. The colony has 160 miles of railway and about 450 miles of 
improved road. Transportation by motor truck is replacing carriage 
on the head and barrel rolling. The success of cocoa in the Gold 
Coast led to its introduction in Nigeria where its cultivation is spread- 
ing. The raising of groundnuts is also an innovation in Nigeria, 
where the exports have increased from 2,500 tons in 1912 to 57,500 
tons in 1918. Cotton growing has been long practiced in northern 
Nigeria, but it is only recently that the encouragement of the British 
Cotton Growers' Association has led to an export trade. This 
association has introduced new varieties and better methods of 
cultivation, has erected ginneries at several points, and guarantees 
at the beginning of the season a fixed price for the whole crop. The 

9< E. g., the red Niger leather. 

95 Ladd, Durant Ferson: Op. cit., p. 68. 



808 



COLOI^IAL TAKIFF POLICIES. 



chief exports of the British West African colonies for 1918 are shown 
m Table 15. 

Table 15, — Chief exports of the British West -African colonies, 1918. 
[In thousands of pounds sterling.] 



Commodity. 


Nigeria. 


Gold 
Coast. 


Sierra 
Leone. 


Gambia. 




: 3,226 


153 


883 
34 


10 


Palm oil 


1 2,610 




Tin ore 


' 1,770 




Groundnuts 


1 920 

293 

236 







800 


Hides and skins 




3 


52 


Cocoa 


1,796 




Cotton 


97 






Gold 


^'^262 
138 

152 






Kola nu^s 


1 


398 






'■ 68 




Specie . ... 


53 




217 


Rubber 


20 






All other 


272 ' 


399 


21 



Total. 



9, 565 i 2 2, 642 



1,517 



1,100 



1 Figures relating to gold and specie were frequently kept secret during the war, and these figures are omit- 
ted from the annual report on the colony. 

2 Excludmg specie, gold and auriferous by-products. Exports of gold and auriferous bv-products from 
the Gold Coast were valued in 1913 at £1,656,000, and in 1915 at £1.783.000: and in 1917 (gold and gold dust) 
at £1,718,000. In 1917, including gold and specie, the exports of the Gold Coast were £6,365,000. 

The steady growth in the trade of British West Africa was checked 
by the war, chiefly, at first by the cutting off of the German market for 
palm kernels, and later by the shortage of shipping. As may be seen 
from Table 16, the trade of the British West African colonies, which 
had increased fivefold in the previous 13 years, must be considered to 
have decreased during the war if even a moderate deduction be made 
to offset the fall in the value of money. The total trade of the four 
colonies rose only from $148,000,000 in 1913 to $157,000,000 in 1918. 

Table 16. — Commerce of the British West African colonies, 1913 and 1918. 
[In thousands of pounds sterling.] 



Colony. 


Imports. 


Exports. 


1913 : 1918 


1913 


1918 


Nigeria 


7, 307 8, 318 
4, 952 1 2. 920 


7,352 

5,427 
1,731 

867 


9,565 


G old Coast 


5,819 




1,750 


1,680 
1,458 


1, 517 
1,100 


Gambia . . 


1,091 






Total 


15, 100 


14, 376 


15,377 \ 18.001 









1 Excluding bullion and specie. Imports including buUion, 1920, £15,152,000; exports, £12,352,000. 

The imports of West Africa are the usual articles of colonial trade 
with a few local variations. Much the largest item is cotton piece 
goods which forms nearly one-third of the total in Gambia and 
Nigeria. Other items of importance are hardware, machinery (in- 
cluding in the Gold Coast and Nigeria automobiles), lumber and other 
building materials, kerosene, salt, soap, perfumery, tobacco, and 
spirits. Spirits, however, are now a minor item compared to what 
they were a few years ago,^® In Gambia kola nuts and rice ranked 
second and third among the imports of 1917. 



»6 For a further account of the trade see Ladd, Durant Ferson: Op. cit.,and Commerce Reports, Supple- 
ment 67a, Dec. 17, 1919. Both of these publications, however, ignore Sierra Leone. 



BRITISH CROWN COLONIES. 



809 



Great Britain has the dominant share in the trade of the British 
West African colonies, and during the v/ar this share was materially 
increased. The increase was due chiefly to the establishment in 
Great Britain of the business of crushing palm kernels and the conse- 
quent importation of these kernels of which before the war three- 
fourths had gone to Germany, An even more complete diversion 
of the groundnut trade of Gambia from France to Great Britain took 
place, apparently because of the shipping situation. Direct com- 
munication with the United States was established and led to an 
increase in trade, though part of the increase shown by the figures is 
only a change from indirect to direct trade. This increase is shown 
in Table 17 which gives the percentages of the import and export 
trade held by the leading countries. 

Table 17. — Trade of British West Africa — percentage of imports from and exports to the 
leading countries, 1912 to 1919. 

IMPORTS.' 



Country. 


Year 


Nigeria. 2 


Gold 
Coast. 3 


Sierra 
Leone. 


Gambia. 


Great Britain. o ...... . 


1912 
1913 
1917 
1918 
1919 

1912 
1913 
1917 
1918 
1919 

1912 
1913 
1919 

1912 
1913 
1917 
1918 
1919 


Per cent. 

68 
61 
83 
84 


Per cent. 
65 
70 
69 
73 
74 

1 
1 
2 


Per cent. 
64 
65 

88 
60 


Per cent. 
33 




35 

77 
58 


France- - 


2 
2 


1 
1 


41 




43 

u 








7 






1 

9 

8 






Grennany , 


11 
11 


12 

10 


8 




6 


United States..... 


4 
4 

12 
12 
13 


6 
5 

22 
21 
21 


2 
3 


1 




7 




16 


15 









EXPORTS.' 



Great B ritain 


1912 
1913 
1917 
1918 
1919 

1912 
1913 
1917 
1918 
1919 

1912 
1913 

1912 
1913 
1917 
1918 
1919 


47 
51 
83 
91 


62 
68 
65 
65 
41 

I 

12 
3 
15 

11 

2 
2 

18 
24 
32 


18 
13 
61 


7 




7 

79 
94 






91 


France » 


. . 




68 




i 

3 

1 




49 






18 






3 








Germany 


42 
42 


44 
•47 


3 


United States 


19 












13 

6 

12 

























1 Including specie and bullion. 

« In 1912 and 1913 the figures are given for the colony and protectorate of Southern Nigeria. 

8 Excluding specie and bullion (gold and gold dust and auriferous by-products)in 1918. 



310 



COLONIAL TAEIFF POLICIES. 



The Tonga and the Solomon Islands are under British protection 
and the New Hebrides are under the condominium of France and 
Great Britain. All three, as well as the other British possessions in 
Oceania, except Fiji, are under the high commissioner of the western 
Pacific. The British high commissioner '^has civil and criminal iuris- 



diction over the subjects of foreign powers 



an 



d the 



supervision of finance administration, " ^'' The Solomon islanders 
formerly were taken as contract laborers to Fiji and other points, 
but more recently omng to the shortage of labor at home their 
emigration has been prohibited. Copra is the chief export but maize, 
rubber, coffee, cocoa, cotton, vanilla, bananas, pineapples, and other 
tropical and semitropical products can be grown; and tortoise shell 
and sea shells are exported. 

Table 18 shows the area, population, and trade of these colonies. 

Table 18. — Area, population, and trade of the South Pacific colonies in Group 4-^ 



ColoBy. 


Area 
(square 
mdies). 


Population. 


Popula- 
tion 
per 

square 
mile. 


Trade, 1918-19 or 

1919 (in thousands 

of doUars). 




Total 


Euro- 
pean. 


Imports. 


Exports. 




385 
11, 000 
5,100 


24,000 
150,000 
3 70, 000 


347 

660 

1,100 


62 
14 
14 


797 

848 
578 


>764 


Solomon Islands .... 


766 


New Hebrides ; 


<749 






Total 


16, 485 


244,000 


2,107 


15 


2,223 


2,279 



1 Figures for area and population from the Statesman's Year-Book, 1920; for trade, from Comxnerce 
Reports, Sept. 8, 1920. 

2 Copra, £122,000. 

3 "The population has been estimated at from 100,000 to 140,000, but the mission returns place it at only 
50,000. " (Civil Office List. 1920, p. 430.) 

* In _ 312 copra was £160,000 out of £164,000. 

TARIFFS — BRITISH WEST AFRICA, 

Treaty ohligatiGns. — In the Gold Coast and Nigeria, equal treat- 
ment of imports from Great Britain and France is guaranteed for 
30 years from the ratification of the treaty ^^dth France in 1899. 
(See p. 144.) In the South Pacific islands equal treatment of 
British and German goods was provided for, without limit as to 
time, in the declarations exchanged in April, 1886, and, relating 
particularly to Tonga, in November, 1899.°^ Equal treatment of 
British and French trade in the New Hebrides is guaranteed in a 
treaty of 1906. (See p. 222.) 

Import duties. — The tariffs of these colonies are not as simple as 
those of eastern Africa, but they are not complicated. They are 
characterized by general ad valorem rates, but the specific rates are 

" statesman's Year-Book, 1920, p. 434. in reference to the Tongan Islands. According to a witness 
before the interstate commission of Australia "the resident commissioner [of the Solomon Islands] said he 
was there to protect the natives solely, not to encourage settlement or development." Interstate com- 
mission of Australia: Report on British and AustraUan Trade in the South Pacific, 1915, p. 111. 

28 See pp. 240, 241. But note art. 289 of the peace treaty of Versailles, two paragraphs of which read as 
f oUows : 

"Each of the allied or associated powers, being guided by the general principles or special provisions of 
the present treaty, shaU notify to Germany the bilateral treaties or conventions which such allied or asso- 
ciated power wishes to re^-ive with Germany. " 

" Only those bilateral treaties and conventions which have been the subject of such a notification shaU 
be revived between the allied and associated powers and Germany; aU the others are and shall remain 
abrogated." 




Ac! , 

r - rFANNir-IO I 

Ns /a ;=^'/v 

_ / I Christmas I 



vS» ; % Walden 

i. Stsrbuck 



Tongarc^fa / ,'* 

'* Carolme / » » « , 

MANAHIK! 15 , • /MARQUESAS I*., 

Flmt* / 



' 






SOCIETY iS ."'e^ , 
•^ \ (Fr) Tahiti 




(N2f) «. ; - 

, TUBUAI "*or. 
* 1 AUSTRAL IS 
1 (Fr) 



■T u 






> 

r.^. 



! 



I ,Oeno 

I <, fBr)D.cie* 

PITCAIRN 



,Rapa 



— 1/ 



185 766— 2 .'. ( To face page 310 . 



BRITISH CEOWN COLONIES. 311 

somewhat more numerous than in eastern Africa, and there are long 
free lists, much like the longest found there. Because of the increased 
need of revenue, due partly to decreased importations of liquors, these 
tariffs have all been increased materially during and since the war. 
The specific duties have practically all been increased,"^ in a few cases 
quadrupled, additions have been made to the dutiable lists, the gen- 
eral ad valorem rates have been raised and export duties have been 
imposed. Since the war, however, there have been a few reductions.* 
The general ad valorem rates, levied on all articles not otherwise 
dutiable' and not on the free list, have been increased as follows : 



Colony. 


Before 
the war. 


1921 


Nigeria '^ 


Per cent. 

10 

10 

10 

5 


Per cent. 

m 

2 20 


Gold Coast 


Sierra Leone 


3 25 


Gambia 


^7i 





'^ Nigeria has no class "all other articles" but all imports dutiable on an ad valorem basis pay 12J per cent — 
aU woven goods other than gray baft, wearing apparel, hosiery and underclothing, thread and yarn, furni- 
ture, earthenware, enamel ware, and hardware, including cutlery and ail minor metal articles and domestic 
and kitchen utensils not elsewhere specified. 

2 The rate upon provisions was increased only to 12.^ per cent, and fresh provisions including fruit and 
meats, remained free. Flour, rice, ship's bread, sugar, tea, and wet salted beef and pork were dutiable 
at specific rates until all provisions Were put on the free list by order of June 15, 1920. 

3 In 1915 this rate was raised from 10 to 15 per cent; and in 1921 to 20, and then (July 13) to 25 per cent. 
(B. T. J., Aug. 26, 1921.) 

< The only ad valorem rates other than the general rate on articles not enumerated are: Boots and shoes, 
jewelry, and perfumery, 10 per cent; and since Nov. 5, 1920, cotton goods, 10 per cent. Foodstuffs, formerly 
dutiable at 5 per cent." and rice, sugar, and edible oils, formerly dutiable at specific rates, were put on the 
free list when the duty on cotton was increased. 

The articles which are preferred for specific duties are alcoholic bev- 
erages, tobacco, firearms, swords, cartridges and gunpowder, salt, 
matches, and kerosene.^ 

There is no more uniformity in the specific duties than in the ad 
valorem duties. For instance, gunpowder pays from less than 1 
penny to 1 shilling 3 pence per pound; cartridges, from 2 shillings 6 
pence to 10 shillings per hundred; still wines, from 1 shilling to 2 
shillings 6 pence per gallon. 

In Nigeria all the dutiable articles are enumerated; the other colo- 
nies have long free lists. Machinery, whether agricultural, electrical, 
industrial, manufacturing, marine, or mining, is free, as are also live 
stock, fertilizers, seeds, insecticides, and fencing; printed matter and 
educational apparatus; coal, ice, and refrigerators; fresh fruit, vege- 
tables, and fish; and bona fide produce of West Africa, including 
goods manufactured in West Africa of West African produce.^ 

While the articles enumerated for specific duties are few they 
include important items of the import trade and amount to a con- 

S9 A notable exception is that gray baft remains dutiable m Nigeria at Id. per poimd. 

1 E . g., A temporary return of the ad valorem rate in Sierra Leone from 15 to 10 per cent, the exemption of 
provisions entering the Gold Coast, and the reduction on May 12, 1920, of the Nigerian rates on wme— on 
still wmes from 6s. to 2s. 6d., and on sparkling wines from 7s. 6d. to Is. per imperial gallon. 

2 other articles dutiable at specific rates are as follows: In the Gold Coast, candles, cordage, laundry soap, 
and cement; in Gambia, paint, and motor cars and cycles; in Sierra Leone, lumber, turpentine and other 
nonedible oils; in Nigeria, beads, coral, soap, lead, spring traps, kola nuts, umbrellas, and gray baft. 

3 The form of the provision regarding West African produce is not uniform. It is absent in Nigeria where 
all dutiable articles are enumerated, including kola nuts, which are imported in large quantities from the 
Gold Coast. In Gambia, by exception, rice, kola nuts, salt, and starch of West Africa production are 
dutiable. In Sierra Leone manufactures are admitted free if made substantially, but not entirely of West 
African produce. 

In the Gold Coast, coffee not of West African production was scheduled at 2d. a pound, then exempted 
from June 15, 1920, and dutiable at 4d. from Jan. 22, 1921. In Sierra Leone such coffee pays the general 
ad valorem rate. 



312 



COLOITIAL TAEIFF. POLICIES, 



siderable part of the total. Until the last two or three years, alco- 
holic beverages were the most important single class, especially 
from the point of view of revenue, for they were imported in large 
quantities and their rates, reduced to an ad valorem basis, ran as 
high as 240 per cent.- The other articles listed for specific duties also 
generally have rates higher than the ad valorem duties — e. g., 3 to 7^ 
pence a gallon on kerosene ^ and 2 pence to 6 shillings 3 pence per 
hundred on cartridges. In the Gold Coast where the articles listed for 
specific duties have been ^ more numerous than in the other British 
West African colonies they constituted from one-third to one-half 
of the total dutiable imports and in 1915, even omitting alcoholic 
beverages, they yielded a greater customs revenue than those dutiable 
at the ad valorem rate of 10 per cent. The following figures for the 
trade of the Gold Coast for 1915 and 1916 show the importance of 
the free list in comparison with the dutiable trade, and the relative 
totals upon which specific duties and ad valorem duties were levied. 
The figures show further that in 1915, 62.2 per cent of the total 
customs revenue was received from liquors/ and that the average 
of all the other specific duties, excluding those on alcoholic bever- 
ages, when reduced to an ad valorem basis, was 29 per cent. One- 
fifth of the total imports came in free and two-fifths paid only 10 
per cent, but liquors paid such high duties that the total customs 
collected were 31 per cent of the total imports. 

Table 19.— Imports into the Gold Coast, 1915 and 1916. 
[In pounds sterling.] 





1915 


1916 


Articles. 


Revenue 
Value. col- 
I lected. 

i 


Average 
rate 
paid. 


Value. 


Articles on the free list 


579, 000 
1,144,000 

216, 000 
694, 000 




Per cent. 


1 901, 000 
2,438,000 

} 1,273,000 


Articles subject to ad valorem duty 


114, 000 

514, 000 
200, 000 


10 

240 
29 


Articles subject to specific duties: 

Liquors 


other articles 




Total. 


2,633,000 


828, 000 


31.4 


4,612,000 





1 Estimated. Figures for free imports are usually taken with less care than those for dutiable goods, 
but the particular reason for calUng this an estimate, as the annual colonial report does, is that there is a 
"very considerable trade" in free goods across the land frontier for which the statistics are not "complete 
and trustworthy." The recorded dutiable trade across the land frontier was less than £13,000 in 1916. 

In the other colonies the rates on distilled liquors before the war 
were approximately in Gambia 100 per cent, in Sierra Leone 150 per 
cent, and in Nigeria 250 per cent. Since 1914 the specific rates have 
been increased but not sufficiently to keep pace with the increase of 



< Since Apr. 25, 1921, spirits of 50° of alcoholic strength have been dutiable in Nigeria at £1 5s. per im- 
perial gallon. 

5 In 1915 3d. per gallon was approximately 50 per cent of the value of the petroleum oil imported into the 
Gold Coast, but v/hen the general ad valorem rate was raised to 20 per cent, with no increase in the specific 
rate on kerosene in spite of the trebled price in this colony, the specific duty became in 1918 lower than the 
ad valorem rate. No doubt other items could be picked out which would show a like change in the rela- 
tive weight of the specific duties. 

6 Until all provisions were made duty free in June, 1920. From Jan. 22, 1921, flour, fish, lard, rice, tea 
and sugar again became dutiable. 

7 Compare Southern Nigeria where the percentage of customs revenue received from liquors was as 
follows: 

1911 67.8 

1913 64.8 

1915 47.8 



BEITISH CKOWN COLOI^IES. 



313 



g rices. Since that year also, through interruption of trade with 
rermany and Holland, the chief suppliers of trade spirits, and 
through the rise of prices and the increase of duty the quantities im- 
ported into West Africa have decreased strikingly, as may be seen in 
the following figures for the Gold Coast: 

Table 20. — Imports of alcoholic beverages into the Gold Coast, 1913 to 1919. 

[In thousands of gallons.] 



Year. 


Gin. 


Rum. 


other 
spirits. 


Still 
wines. 


Sparkling 
wines. 


Ale, beer, 

and 

porter. 




559 
574 

502 

490 

121 

71 

10 


1,153 
1,095 

989 
1,214 
772 
335 
621 


51 
54 

44 
82 
25 
32 
41 






1913 


71 
67 


149 


1914 


151 






1915 


37 
54 
25 
12 
31 


2 
5 
3 
1 
3 


120 


1916 


148 


1917 


28 


1918. o 


59 


1919. . 


77 











The importation of spirits into large parts of Nigeria had long been 
prohibited in accordance with the principles laid down in the treaty 
of Brussels (1890) and in 1919 the drastic policy was adopted of pro- 
hibiting the importation of trade spirits into the British West African 
possessions. (See p. 122.) Trade spirits are defined in Nigeria as 
''spirits imported for sale to natives and not generally consumed by 
Europeans.''^ The importation of distilling apparatus is included in 
the prohibition in the colony of Gambia. 

Export duties. — There was an old export duty in Gambia of 6 shil- 
ling 8 pence per long ton on groundnuts, which was increased in No- 
vember, 1920, to £ 1 ; and the war, together with the lessened importa- 
tion of trade spirits, has caused the imposition of export duties in the 
other colonies as follows : ^ 



Commodity. 


Nigeria. 


Sierra Leone. 


Gold Coast. 


Pjilm Vfimfils.. 


Oct., 1916,6 £1 2s. 6d.... 
Feb. 1, 1920, £2 


Jan. 1, 1918, 10s 




per long ton. . 






June 11, 1919, £1 2s. 6d.. 






Oct., 1916, £2 


Jan. 1, 1920, £2, 5s 






May 1, 1920, £2 10s 






June 11, 1920, £2 15$ 






July 1, 1920, £3 




Palm oil per pound . . 


Jan. 1, 1918, 10s. 5d 




Feb. 1, 1920, £3 


June 11, 1919, £2 Is. 8d 






Oct., 1916, £2 6s. 8d 


Jan. 1, 1920, £4 3s.4d.... 








Ofit. 1, 1916, £2 6s. 8d. 


Kola nuts 




Jan. 1, 1918, 4s. 8d.. .... 


July 5, 1919, £4 13s. 4d. 


per hundredweight . . 




Groundnuts, -per long ton. 


Jan. 1, 1918, 10s .. 






Feb. 1, 1920, £1 






Untanned hides and 
skins . . .per pound. . 


1 
Jan. 1, 1918, 2d 




Tanned hides and skins.. 
per pound 


Jan. 1, 1918, 3d 











a Goods in transit by sea, or inland navigation, are exempt from the export duties of the Nigerian Ex- 
port Ordinance of 1916. (B. T. J., Aug. 4, 1921.) 

b Shortly after the proclamation of the first export duties in Nigeria, it was announced that only half of 
the rates quoted would be levied until Mar. 31, 1917. The rate of £2 6s. 8d. per ton is one farthing (one-half 
cent) a poimd. The dates are either those of the laws or orders, or of the days when they became effective . 

8 lu Gambia trade spirits "means spirits of a low grade in value which in the opinion of the receiver gen- 
eral, subject to any direction of the Governor, are imported mainly for native consumption." (B. T, J., 
May 8, 1919, p. 618. Ordinance of Gambia, Apr. 23, 1919, and of Sierra Leone, Aug. 16, 1919.) 



314 COLONIAL TAEIFF POLICIES. 

Nigeria also levies royalties ''which are collected on exportation in 
the form of an export duty." The royalty on tm ore or metallic tin 
is based on a sliding scale beginning with 2 per cent ad valorem when 
the London price of tin is less than £130 per ton and increasing to 
74 per cent if the London price reaches or exceeds £180 per ton. 
The ore is deemed to contain 70 per cent of metallic tin. There is a 
similar sliding scale on wolfram and there are rates not exceeding 
3 per cent on iron and lead or their ores and on lead ore containing 
silver. On gold the royalty is 4 shillings per ounce Troy and on other 
precious metals 5 per cent ad valorem. As usual these export 
duties are found to fall on the most important products exported, 
and they produce considerable sums of revenue. Nigeria has been 
exporting from 150,000 to 200,000 tons of palm kernels and has 
exported greater quantities of cocoa. The export duties in 1919 
yielded 4.6 per cent of the value of the native products exported. 

Preferential duties and restrictions. — The special restrictions on 
trade during the period of hostilities may be passed over. Since 
that period one discriminatory import restriction has been in force 
and two discriminatory export duties. The import restriction is 
that found in many British colonies prohibiting the importation of 
dyestuffs except as licensed by the governor. '^ (See p. 361.) 

The preferential export duties are those upon palm kernels and tin 
ore. Upon palm kernels the duty is an additional £2 per ton unless 
a bond is given that the kernels will be crushed within the British 
Empire. Likewise there is an additional 3| per cent ad valorem 
upon tin ore which is not to be smelted in the United Kingdom or 
British possessions. Further discussion of these differential duties 
will be found on pages 339 and 340. 

TARIPFS OCEANIA, 

Three groups of Oceania have tariffs similar to those just dis- 
cussed — the New Hebrides, the Solomon Islands, and Tonga (the 
Friendly Islands). In the tariffs of these colonies, the general rate 
is 10 per cent in the first two named and 12 J per cent in Tonga; 
specific rates are the rule for alcoholic beverages, tobacco, arms, and 
munitions, and oils; otherwise the lists are restricted, in the New 
Hebrides^° to spices, and in the others to galvanized iron and some 
forms of wood or timber. Before the war, the Solomon Islands had 
no general tariff rate; the tariff system which was then in force 
would have fallen in the class of those listed in Group 2. Tonga 
had a general rate of 10 per cent instead of 12^ per cent. The general 

9 The prohibition upon the exportation of oleaginous products, except palm oil, to destinations other than 
the British Empire, France, and Italy, was also in no wise pecuUar to British West Africa. In Nigeria this 
prohibition weiit into effect on Feb. 2, 1919, and was repealed on Dec. 6 of the same year. While it was not 
in force during the period of hostilities this regulation was essentially a war measure and it is believed that 
it is no longer in force in any of the British colonies. 

The government of the Gold Coast has announced another discriminatory measure to operate from Jan. 
1, 1922. From that date the importation of left-hand-driven motor vehicles is to be prohibited. (Board 
of Trade Journal, Mar. 31, 1921.) This legislation is due to the British rule that drivers keep to the left of 
the road, and the consequent practice of British manufacturers of maldng vehicles to be driven from the 
right side. It may be noted that after a careful consideration of the subject in Great Britain, the adoption 
of such a measure as that announced for the Gold Coast was not judged necessary for the avoidance of 
accidents. That the government of the Gold Coast has given almost a year's notice of the application of 
the measure may be looked upon as an admission that the measure is not \'iially necessary to public safety, 
but the government may have considered it important to give manufacturers other than Bntish a long 
period of grace in the matter. 

w For a full description of the tarifi of the New Hebrides, see pp. 222 and S06. Preferences are granted 
by France and Australia to certain products of the New Hebrides raised by planters of French and British 
nationality, respectively. 



BRITISH CEOWN COLONIES. 315 

ra^te in the New Hebrides was raised shortly before the war from an 
earUer 5 per cent to 10 per cent. In the New Hebrides, the rates on 
spices are those of the French tariff, imposed to protect France, 
since that country admits these spices of the New Hebrides, if grown 
by French interests, free; there is a rate of 100 per cent on detona- 
tors and on guns other than rifles and revolvers, and on ammunition. 
In Tonga there is a rate of 25 per cent on arms, wax vestas, and 
watches and other jewelry. Formerly, the only export duty in any 
of the three was one of 2 J per cent in Tonga on exportation of coin; 
but in 1917 Tonga levied a duty of 15 shillings per ton on copra, 
and in 1918 there was imposed in the New Hebrides a duty of £4 per 
ton on the exportation of rosewood and sandalv/ood. 

GROUP 5. — COLONIES WHICH IMPOSE SPECIFIC AND AD VALOREM 
DUTIES ON ARTICLES OF CONSUMPTION AND SOME EXPORT DUTIES — 
BRITISH WEST INDIES; THE SEYCHELLES. 

THE WEST INDIES. 

The 16 tariffs of the British possessions in and about the Carib- 
bean may be grouped together. These possessions include British 
Guiana and British Honduras on the mainland, Bermuda, Trinidad, 
and the British West Indies in the narrower sense — Jamaica, Bar- 
bados, the Bahamas, the five Leeward Islands, the three Windward 
Islands, and Turks and Caicos Islands. 

As may be seen from Table 21, British Guiana alone of these colo- 
nies has a considerable area — approximately equal to that of the 
States of New York and Pennsylvania combined, while the largest 
of the island groups is smaller than Connecticut. Jamaica's ipopu- 
lation approaches a million, and the populations of Guiana, Trinidad, 
and Barbados are in the neighborhood of 200,000 or 300,000, but 
none of the others exceeded 60,000 in 1911. British Guiana has 
only about 3 persons to the square mile, Honduras, 5, and the 
Bahamas, 14; but in the other colonies, the populations, although 
small, are large compared with the size of the islands. Bermuda 
and Barbados, with 1,100 persons to the square mile, rank with 
Egypt among the world's most densely popiilated territories;^^ the 
others have from 100 to 500 per square mile. Bermuda also annually 
accommodates visitors to a number in excess of her resident popula- 
tion. The expenditures of these visitors explain the striking dis- 
crepancy between the values of Bermuda's imports and exports — 
in 1913, imports of £571,000, as against exports of £105,000. The 
total trade of all these colonies, including transit trade and specie, 
was in 1913, about £29,000,000, which indicates a commercial im- 
portance only about one-tenth as great as that of Canada. 

11 But the population of Malta exceeds 1,800 to the square mile. 
185766°— 22 21 



316 COLONIAL TAEIFF POLICIES. 

Table 21. — Area and population of the colonies in Group 5.^ 



Colony 


Area 
(square 
miles). 


Population. 


Popula- 
tion per 


Total, 1917. 


White. 


square 
mile. 


Trinidad and Tobsigo . ^ 


1,974 
89, 500 

4,296 
165 
715 
516 

8,598 

4,404 

19 

224 


377,000 
314,000 
S99, 400 
187, 000 
128,000 
178, 000 
43,000 
€0,000 
22, 000 
5,600 


2 19,000? 

3 18, 400 

4 15,605 


191 


British Guiana 


3 




299 


Barbados ~ 


1 127 


Leeward Islands 3 




179 






345 


British Honduras.. . . . 


2,600 


5 


Bahamas 


14 


Bermuda 


7, .393 
S2S6 


1,158 


Turks and Caieos Islands ^ . . . 


25 






Total West Indies.. .. . 


110,412 
156 


2,214,000 
25,000 


. . 


20 


Se>ycheUes 




160 










1 statesman's Year-Book, 1919. 

2 In Commerce Reports, Supplement 25a, Mar. 11, 1920, appears the statement that probably not over 
5 per cent are white. 

3 Portuguese 9,766, other Europeans 3,639. The larger part of the country is inhabited only by the 
aboriginal Indians and no estimate of their population has been made. In the settled area there are about 
7,000 of these Indians, 138,000 East Indians, 2,800 Chinese, and 153,000 Negroes and mixed blood. (Colonial 
Office List, 1919.) 

•* J.911. Jamaica only, it is said that a majority of the 5,400 inhabitants of the Caymans are white. 
^ Antigua, Montserrat, St. Christoi^her-Nevis, Dominica, and the Virgin Island?. 

6 St. Lucia, St. Vincent, and Grenada. 

7 Turks and Caieos Islands are a dep-endency of Jamaica but the figures axe given separately because 
they have a separate tariff. Most of the names cover groups rather than single islands. Even Bermuda, 
with only 19.3 square miles, consists of 20 inhabited and hundreds of uninhabitrd islands. The most 
important of the subsidiary islands are Tobago (114 square nailes) attached to Trinidad, Barbuda (62 square 
miles) attached to Antigua, and Anguilla (35 sciuare miles) attached to St. Christopher-Nevis. St. Christo- 
pher is commonly called St. Kitts. 

8 1911. 

The population of the Britisli West Indies is varied not only in 
nationality but in race. Only a small fraction is of English descent. 
The original inhabitants of the islandS; the Caribs^ were practically 
exter mi nated, but a few hundreds of pure descent survive in 
Dominica. On the mainland the Indian population survives in 
greater numbers in Guiana and Honduras. When the Caribs failed 
to survive the slavery to which they were subjected^ their places 
were taken by Africans, and the major part of the population is now 
black or of mixed blood. In recent decades East Indians have be^n 
brought in and they and their descendants now form 43 per cent 
of the population of Guiana and about one-third of that of Trinidad. 
In Jamaica there are about 17,000 East Indians and 2^000 Chinese. 
Jamaica, Barbados^ and the Bahamas, however, have not felt the 
same shortage of labor as Guiana and Trinidad and many thousands 
of their inhabitants have mig rated to the Canal Zone, Cuba, and 
Central or North America. Ci Trinidad '* the remaining two-thirds 
[i. e., who are not East Indians] are mostly mixed African and 
European blood, the oldest European elements being French and 
Spanish. A French patois is spoken and in some places Spanish, 
but these are in general confined to the cocoa planting districts." ^^ 
In St. Lucia also a French patois is spoken. Dutch elements are 
also found and three-fourths of the Europeans in Guiana are 
Portuguese. 

As British Guiana extends almost to the Equator while Bermuda 
lies 2,000 miles to the north opposite North Carolina, and as an 

12 statesman's Year-Book, 1918, p. 337. 




(185766-22. (To [ace page 316.) 



BRITISH CROWN COLONIES. 317 

almost equal distance separates Barbados from British Honduras, 
it is not surprising that there is a considerable difference in their 
chief products. Historically, sugar has been the great crop of the 
West Indies, but with the decline of that industry (see p. 697 fn.), the 
planters turned to other products, so that before the war sugar was 
only a small part of the total exportation and cocoa exceeded it in 
value. But the diversity of products is that of the v/hole group; 
each colony has some one product which constitutes in value at least 
one-third of its total export. The diversity is seen in the fact that, 
taking the Leeward Islands as a unit, and the other colonies sepa- 
rately, there were in 1913 nine different dominant products in the 
12 divisions, while the inclusion of the products second in importance 
adds four more commodities to the list. Three-fourths by value of 
the total exportation of Grenada was cocoa; of British Honduras, 
wood and. chicle; of St. Vincent, arrowroot and cotton; of Turks 
and Caicos, salt; two-thirds of Bermuda's export was vegetables 
and the same proportion for the Bahamas was sponges and hemp. 
Guiana, the Leeward Islands, and St. Lucia exported sugar to a value 
of one-half their respective totals. St. Lucia also exported cocoa 
(two-fifths); Guiana exported rum, balata gum, and rice, and the 
Leeward Islands, cotton and limes. One-half of the exportation of 
Barbados was molasses, and there was some sugar, cotton, and 
rice. Cocoa was the most important export of Trinidad (one-third), 
followed by sugar and asphalt. Bananas were the chief export of 
Jamaica (two-fifths), and their value was approximately equaled by 
the total of the logwood extract, coffee, coconuts, cocoa, dye woods, 
and rum.^^ 

These colonies are almost ¥/holly agricultural. Mineral products 
are important only in Trinidad (oil and asphalt) and in Guiana (gold, 
diamonds, and bauxite). Products of the sea receive minor atten- 
tion and some boats are built. Bermuda and the Bahamas are 
winter resorts. Jamaica and Trinidad have some transit trade 
which adds to their commercial importance. Oil is refined in Trini» 
dad, and in Jamaica there are three factories for extracting logwood 
dyes, but otherwise the West Indian colonies have only a few small 
mills or factories chiefly for operations essential to the utilization of 
agricultural products — cotton gins, mills for crushing sugar cane, 
and factories for preserving fruit.^* 

Bermuda and Barbados are cultivated intensively. The other 
islands are capable of much further development, though a con- 
siderable part of the surface is mountainous, rocky, or sandy. The 
tv/o largest colonies, Guiana and Honduras, have scarcely been 
touched — the cultivated area remains less than 1 per cent. In 1916 
the Indian government prohibited the migration of contract laborers 
to Guiana. It is now reported that an agreement on this subject 
has been reached and this labor will again become available. With 

13 These figures, being based on values in a single year are merely illustrative of the diversity of chief 
products in the West Indies. Higher prices for certain commodities, e. g., sugar, or the failure Of certain 
crops might make numerous changes in the list. Cf. B. T, J., Sept, 29, 1921, p, 320. 

i< There are about 20 sugar factories in Trinidad, from a few of small capacity up to the largest v/ith about 
20,000 tons capacity. In addition there are several large oil refineries, one furniture factory, two tobacco 
arid cigarette factories, two tanneries, one brewery, one factory for m.aking matches, one for soap, two for 
aerated water, four for making ice, four for making chocolate, 'four for lime Juice, four for making coconut 
oil, two for rice milling, two for making coconut fiber, three iron foundries, one floating dock, several saw- 
mills, one biscuit' factory, two dyeworks, six printing works, two carriage factories, eight garages, and a 
factory for the manufacture of Angostura bitters. (Commerce Reports, Supplement 25a, Mar. 11, 1920^ 
p. 12.) 



318 



COLONIAL TARIFF POLICIES. 



a sufficient labor supply the colony can increase enormously its 
crops of sugar, cocoa, and other tropical products. 



THE SEYCHELLES. 



The Seychelles, some 90 in number, lie in the Indian Ocean 600 
miles northeast of Madagascar. Copra is the chief export. Others 
are vanilla, essential oils, guano, cinnamon, soap, tortoise shell, 
and calipee. The trade is largely with India. 

TRADE OF COLOXIES IX GROUP 5. 

The value of the trade of these colonies in 1913 and 1917-18 is 
shown in Table 22. 

Table 22. — Imports and exports of the colonics in Group 5, WIS and 1917-18. 
[In thousands of pounds sterling.] 





Colony. 


Imports. 


Exports. 




1913 


1917-18 


1913^ 


1917-18 


Trinidad and Tobago. . . 




4,968 

1,611 

2^862 

1,3.53 

588 

2,047 

055 

404 

571 

30 


4,790 

3.271 

1 3, 327 

2.285 

'902 

893 

575 

494 

674 

35 


5,206 i 

2,110 j 

2,440 j 

2 761 ' 

564 ! 

1,376 i 

643 

264 

105 

.28 1 


5 309 






4,316 


Jamaica and Cayinan Islands 


1 2 4S7 


Barbados 




2,190 
1,095 




Windward Islands ... 


922 


Britisii Honduras 


550 


Bahamas 




402 






208 


Turks and Caicos Islands.. 




42 








Total West Indies.. . 


15, 089 
83 


17, 246 

88 


13,497 1 
166 


17, 521 
90 


SevcheUes 











1 Excluding buUion and specie for Jamaica. 

2 Excluding bunker coal. 



Ijnport duties. — The import tariff schedules of this group contain 
from 50 to 120 classifications, ^^ for the most part of specific rates, 
but with some ad valorem rates and ending with ad valorem rates 
of from 10 to 20 per cent on all articles not enumerated and not on 
the free list. This last rate is 20 per cent in British Guiana,^^ Brit- 
ish Honduras,^^ Trinidad, ^^ and Barbados, 16§ per cent in Jamaica, ^^^ 
15 per cent in St. Vincent,^^ Grenada,^^ St. Lucia, Antigua, St. 
Christopher-Nevis, Montserrat, and the Seychelles, ^^ 12^ per cent 
in Dominica and the Bahamas, ^^ 11 per cent in Bermuda, ^^ and 
10 per cent in the other two. The articles selected for enumeration at 
specific rates are chiefly foodstuffs, including liquors and tobacco; and 

^ Turks and Caicos has only 28 specifications in its tariff, while Trinidad has about 200. Most of the 
rates in British Honduras are ad valorem. 

16 The rate on non-British goods was raised from 15 to 20 per cent when the Canada-West Indies agree- 
ment was made effective; the rate on British goods was reduced to 10 per cent. 

17 Rate increased from 10 to 15 per cent, bv ordinance assented to on Sept. 20, 1919, and to 20 per cent 
from Aug. 23, 1921. Rate on British goods reduced to 10 per cent on Oct. 12, 192,0. 

17a A government bill introduced Dec. 7, 1921, proppses 20 percent. .-ok, 

18 The rate on non-British goods was raised from 10 to 15 per cent when the Canada- West Indies ■ajree-;^^ 
ment of 1920 was made effective (see p. 364); and 20 per cent in April, 1921. "' v/j r 

13 Increased from 12^ per cent in 1920. (The Times Trade Sunplement, Mar. 27, 1920.) 

20 Mar. 11, 1920. The rate in 1919 was 25 per cent and in 1918, 20 per cent. The schedule for 1920 reduces 

by half the specific rates except on tobacco, wines and spirits. (Commerce Reports, May 1, 1920.) 
'21 Schedules for the calendar years 1920 and 1921. The 11 per cent is made up of a regular duty of 10^ 

per cent and a surtax applicable ahke to specific and ad valorem duties of 10 per cent of the duty paid. 



BRITISH CROWN COLONIES. 



319 



tallows and oils, soap, matches, cement and wood, arms and am- 
munition. This practically exhausts the list of enumerated articles 
in the majority of the colonies, but the schedules of Guiana, Trinidad, 
Barbados and St, Vincent list about 30 classes of manufactured 
articles at ad valorem duties, the rate being usually the same or 
about the same as that on unenumerated articles. -^ Obviously, 
most of the duties can not protect local industries, though in certain 
cases the duties on foodstuffs and lumber may have that effect, 
particularly the duties on sugar, coffee, cocoa, and other semi- 
tropical products. ^3 The wide range of duties upon manufactured 
products becomes of special importance in view of the conversion 
of the West Indies to the policy of preferential tariffs in favor of 
Great Britain and Canada. This phase of the situation is dealt 
with on pages 362-367. 

The height of these tariffs previous to the recent increases is 
indicated by the following figures, showing the average rate paid 
upon all imports; or where the revenue obtained from import duties 
is not distinguishable from that obtained from export duties, the av- 
erage rate of all duties paid upon the total trade. 



Country. 


Year. 


Average rate of 

import duty paid 

upon— 




All 
imports. 


Dutiable 
imports. 


Jamaica 


1914 

1913 

1913 

1919 

1914-15 

1918-19 

1918 

1918 

1913-14 

1919 

1913-14 

1920 


Per cent. 
15. 5 - 
7.8 
21.3 
14.3 
117.2 
111.6 
11 
10 
9.1 
12.1 
13.1 
14.4 


Per cent. 


Trinidad 


9.9 


Bahamas . 




Barbados 


15.8 






Guiana . 




Bermuda 




Honduras 


13 2 






Turks and Caicos 




Seychelles 









1 Percentage reckoned on imports including specie. 

The extensive free lists frequently include various foodstuffs, but 
are composed chiefly of articles expected to promote the develop- 
ment of the agriculture and industry of the colony. Long enumera- 
tions of the kinds of machinery exempt from duty are common, and 
packing materials, railway and telegraph equipment, fire engines, 
and printed matter are generally free, or free on the preferential 
schedule and dutiable at a low rate on the general schedule. In , 
Jamaica — ( 

Whenever it shall appear to the governor in privy council, that the interests of 
this island will be advanced thereby, he is hereby authorized to exempt from duty , 
or to admit at a modified rate of duty any articles which may be required for use in 

22 other ad valorem rates are found: e. g. in Bermuda, 20 per cent on patent medicines and cosmetics, 
and ,25^er cent on wine; in Honduras, 25 per cent on jewelry, clocks, and watches, tea, cigarettes and 
wine, "and 30 per cent on perfumery and medicinal spirits; in Dominica, 37^ per cent on wines other than 
clarets; in Trimdad and Grenada, 30 per cent on jewelry, perfumery and motor cars. Trinidad and Bar- 
bados have the low rate of 2^ per cent on 7 and 9 classffications of machinery (free in Trinidad until De- 
cember, 1917, and now free under the preferential schedule). 

23 There are no doubt many minor instances such as matches and soap (see footnote on p. 317 for the 
minor industries of Trinidad.) In Bermuda bananas are dutiable from May to December, inclusive, and 
turnips from December to July, inclusive. 



320 



COLOXIAL TARIFF POLICIES. 



connection with local industries, or in tlie preparation of native products, subject 
to such regulations and conditions, and for such periods as he may see fit.^ 

Including, as they do, many provisions for the exemption of govern- 
ment stores, certain property of soldiers, consuls, gun clubs, or 
others, and articles for particular uses, such as religious and educa- 
tional, these exemption lists are often long enough to cover several 
pages of an ordinary book. The following percentages of the total 
imports entered free in the colonies and years named: 

Percent. 

British Honduras 1916 30. 3 

Jamaica 1919 19. 8 

Trinidad 1918 20. 7 

Bahamas 1919 9.5 

Export duties. — Trinidad, Jamaica, Honduras, Grenada, St. Vin- 
cent, Guiana, and the Leeward Islands with the exception of Antigua 
have export duties on from five to a score or more of the chief ex- 
portable products. These duties are all specific. ^^ Export duties 
expired or were repealed in the years preceding the war in Trinidad, 
Barbados, Jamaica, and Turks and Caicos, but have been tempo- 
rarily reimposed in Jamaica from December, 191 8. ^^ The rates levied 
upon agricultural produce in Trinidad in 1919 and 1920 are as 
follows : ^"^ 



Article. 



Export duty. 



1920 



Additional duty 

in aid of 

agriculture. 



1920 



Sugar, per 1,000 pounds 

Rum, per gallon 

Molasses, per gallon 

Cocoa, per 100 pounds. . 
Coconuts, per 1,000 nuts 
Copra, per 100 pounds. . 
Cedar, per cubic foot . . . 



$0.48 


SO. 72 


.04 


.06 


.01 


.011 


.14 


.21 


4.00 


2.10 


1.20 


7.00 


.04 


.00 



$0.06 



.01 

.03 
.08 



$0.10 



.Oli 
.05 
.15 



The rates of the export duties are all low. In Honduras the 
average rate paid in 1913-14 was 1.1 per cent upon all dutiable 
exports. In Guiana, in addition to the war duties on sugar, rum, 
rice, balata, charcoal, and firewood, there is an "invoice, shipping 
bill, or specification tax" of IJ per cent ad valorem upon all prod- 
uce exported, and a colonization tax of 1 per cent upon all prod- 
uce except sugar. In Grenada the export duties collected in 1919 
were 1.36 per cent of the total value of the exports or 1.39 per 
cent of the dutiable products exported. ^^ 



2^ Law 17 of 1920. other islands have similar lavrs. 

25 British Honduras levied 20 percent ad val. on the liquors exported in 1919-20, but for 1921 the rate is 
10 per cent. The tariff of July 1, 1919, in the Bahamas levied an ad valorem duty of 5 per cent on sponges, 
but the act approved June 6, 1921, removed the duty on sponges and sisal. Older export duties in the 
Ba h amas were on minor items of trade— wrecked goods, sisal and pineapple shps, guano and cave 
earths. Turks and Caicos has a specific duty on the export of sisal plants. The duties of St. Christo- 
pher-Nevis and Antigua are on sliding scales. The Seychelles have export duties of 1 rupee a ton on 
guano, phosphate rock, prepared fertilizer, and mangrove bark: 1 rupee per hectoliter on whale oil and 

2 rupees a ton on cinnamon bark. These are aU minor items of the export trade. 

26 The repeal of certain of Jamaica's export duties is forecast in The Times Trade Supplement, Apr^ 
23, 1921. ;. ;. 

27 Commerce Reports, Mar. 8. 1920. The rates on sugar have been increased to S shillings plus 3 shill- 
ings. (B. T. J., Jan. 13, 1921.) Trinidad has also a duty on asphalt. 

28 Additional duties have been levied for 1921, e. g., 1 shilUng per hundredweight, in addition to 1 shilling 

3 pence, or 7J pence, according as the London price exceeds or does not exceed 50 shillings per hundred- 
weight. 



BRITISH CROWN COLONIES. 321 

PREFERENCES. 

Much more important than the sporadic preferences heretofore 
referred to, granted on occasional items in various colonies, are 
those which constitute an organized system in the West Indian 
colonies. This system is summarized on pages 362-367 and its origin 
is described on pages 696 ff. A remnant of a preference which 
dates back probably to the old colonial system is seen in the preferen- 
tial duty on coffee imported into Jamaica. By a law at least as 
early as 1867 coffee from non-British sources was entirely pro- 
hibited and a rate of 1 pound sterling per hundred pounds on raw 
coffee and of 2 pounds sterling on roasted coffee was imposed on 
British colonial coffee. The rate has remained unchanged; likewise 
the prohibition.^® 

In the Seychelles dogs where imported from the United Kingdom 
pay only 3 rupees per head, while from any other source they pay 8. 

GROUP 6. — COLONIES WHICH IMPOSE IMPORT DUTIES, SPECIFIC OR 
AD VALOREM, ON MOST ARTICLES, AND USUALLY EXPORT DUTIES — 
MALTA AND CYPRUS, CEYLON, MAURITIUS, BRITISH NORTH BORNEO, 
BRUNEI, AND FIJI ISLANDS. 

This group includes the possessions not elsewhere classified with 
the exception of India; it is not, however, a miscellaneous group; the 
tariffs of the colonies here named have a community of character- 
istics. The island of Borneo is divided between the British and 
the Dutch, the major part of its area being Dutch. The British 
portion on the north is divided from northeast to southwest into 
the territory of the British North Borneo Co. and the protectorates 
over the native States of Brunei and Sarawak, the last named, how- 
ever, having an English rajah. Brunei is under the jurisdiction 
of the governor of the Straits Settlements, who is high commissioner 
for all the Malay States federated or nonfederated. Mauritius lies 
east of Madagascar; Malta, south of Sicily; Ceylon, south of India. 
Cyprus, off the coast of Asia Minor, was annexed in November of 
1914, having previously been administered on behalf of Turkey 
under the convention of June 4, 1878. 

As these scattered colonies have been grouped only because of the 
similarity of their tariffs it is not surprismg that they illustrate 
imusually well the diversity of the British Empire. Most of the 
Cypriotes are Greeks, but Ottoman Turks constitute one-fifth of the 
population. The new constitution of Malta (1920) recognizes 
English, Italian^ and Maltese as the languages which may be used 
in parliamentary debates and Italian will continue to be the official 
language of record in the law courts.^^ In Mauritius French is 
spoken even by the British residents ;^^ two-thirds of the popula- 

29 A similar provision in regard to rum, apparently equally old, was dropped in 1899 after the rate had 
been raised in 1894. A preference in which the United States shared was dropped by the act of Mar. 22, 
1916, the act which increased the general ad valorem rate to 16| per cent and removed 30 iten).s from tlie 
free Ust. Jamaica levies a duty of £2 per head on cattle and other rates on other animals, but for some 
years prior to 1916 dairy cows and heifers bred in and imported from the United Kingdom, British posses- 
sions, India, and the United States, and pure-bred horses, cattle, pigs, sheep, goats, and rabbits imported 
specially for breeding purposes from the countries named were admitted free. 

80 The Times (London), June 15, 1920. "The new constitution wiU put Malta on the same footing as 
the self-governing Dominions of tbe Empire." This is aa overstatement, since the governor may legislate 
on the subjects of defense, external trade, immigration, coinage, and foreign relations. (See also The 
Times, Nov. 1.1921.) 

81 The Times, Empire edition. May 25, 1920. 



322 



COLONIAL TARIFF POLICIES. 



tion, however, are now East Indian, and there are also numbers of 
Chinese, Negroes, and Malagasys. Brunei and North Borneo are 
inhabited by Malays and Dyaks and several less civilized peoples. 
The original Melanesians still constitute the numerical majority of 
the population of the Fiji Islands, but the labor market is con- 
trolled by the East Indians and the Chinese are an important factor 
in trade.^^ The area and pop>uiation of these colonies and the value 
of their imports and exports in 1913 and 1918 or 1918-19 are shown 
in Tables 23 and 24. 

Table 23. — Area and ijopulation of the colonies in Group 6.^ 



Colony. 


Area 
(square 
miles). 


Population. 


Popula- 
tion per 


Total. White. 


square 
mile. 


Ceylon 


25,481 
809 
7,083 
31,106 
4,000 
118 
3,584 


2 4,502,000 

385,000 

063,000 

6 208,000 

32,000 

225,000 

311,000 


7,300 


184 


Mauritius * 


476 


Fiji . . 


5 3,707 
6 355 


23 




7 


Brunei- . . . . . 


8 






1,883 
87 


Cyprus 










Total 


72, 181 


5,826,000 




83 









1 statesman's Year-Book, 1920. 

2 Census of 1921, provisional figure. Sinhalese estimated (1918) at 2,989,000; Tamils, at 1,352,000. 

3 Mauritius and dependencies. Mauritius has an area of 720 square miles. The Island of Rodriguez, 
345 miles distant, is the chief of the dependencies. Its area is 40 square miles; population in 1911, 4,829; 
total trade in 1917, £44,000. 

* Fijians estimated at 88,000 and East Indians at 62,000. 

6 1911 census. 

e 1911. Chinese 26,000; East Indians 5,500; Filipinos 5,700. 

Table 24. — Total imports and exports of the colonies in Group 6, 1913 and 1918. 
[In thousands of pounds sterling.] 





Imports. 


Exports. 


Colony. 


1913 or 
1913-14 


1918 or 
1918-19 


1913 or 
1913-14 


1918 or 
1918-19 


Ceylon . 


13,309 

2.493 

'904 

035 

15 

2,589 

676 


11,849 
2,861 
1,166 
761 
42 
2,864 
1,014 


15,658 

2,262 

1,426 

863 

51 

1,1.54 

700 


14 209 




3' 715 


Fiji 


1,'656 
1 019 


British North Borneo. . 




'121 


Malta 


780 




862 






Total 


20,621 


20,557 


22, 114 


22,362 





Ceylon is easily the most important colony of the group. Coco- 
nuts, tea, rice, and rubber in descending scale occupy the largest 
acreages but Ceylon imports rice. Tea and coconut products had 
been the leading exports until in 1917, when the rapidly increasing 
rubber plantations gave the first place to rubber. -"^^ In 1919, 106,- 
000,000 pounds of rubber v/ere exported of which 71, 000,000 pouncis 

82 Commerce Reports, Dec. 8, 1919, quoting the Board of Trade Journal. ' ' 

33 In 1918 the quantity of rubber exported was one-third less than in the previous year and the value 
only one-half as great. 



BKITISH CROWN COLONIES. 



323 



were sent to the United States.^'^ Other exports are plumbago, 
areca nuts, cocoa, cinnamon, and oil of citronella. Table 25 shows 
the values of the chief imports and exports for 1917. 



Table 25. 



IMPORTS. 

Rice 

Cotton manufactures 

Coal and coke 

Sugar, ray and refined 

Fertilizers 

Spirits 

Bullion and specie. 



-Chief imports and exports of Ceylon, 1917. 
I in thousands of pounds sterling.] 

EXPORTS. 



3,959 
980 
672 
494 
335 
76 
75 



Another 5,639 

Total 12,230 



Rubber 

Tea 

Coconuts and products . 

Copra 

Coconut oil 

Coconut, desiccated. 
Coir (and manufactures). 



8,731 
6,378 
2,252 



881 

672 

624 

54 

Coconut, fresh 21 

Plumbago 

Areca nuts 

Cocoa 

Citronella oil 

Cinnamon 

A 1 1 other 



Total. 



The distribution of Ceylon's trade in 1913, 1918, and 191 
shown in Table 26. 



1,453 

197 

120 

78 

65 

1,500 


20,774 

19 is 



Table 26. — Distribution of the trade of Ceylon, 1913, 1918, and 1919.^ 



Country. 


Imports. 


Exports. 


1913 1918 


1919 


1913 


1918 


1919 




Per cent. 

44.62 

29.20 

6.12 

2.20 

1.28 


Per cent. 
57.59 
16.11 
3.83 
5.14 
3.17 


Per cent. 
54.31 
14.16 
3.80 
3.50 
3.36 


Per cent. 
2.35 

45.54 


Per cent. 
10.00 
44.72 


Per cent. 
6.83 


United Kingdom .. 


42 13 


Straits Settlements 




Japan 


.03 
16.63 






United States 


17.78 


33.52 







1 Supplement to Commerce Reports, No. 54a, Dec. 6, 1920. The figures for imports do not include gov- 
ernment stores. Their value in 1918 was $3,532,000 (6.1 per cent of the value of the merchandise imported). 
The bulk came from the United Kingdom, but Japan supplied $274,000 and the United States $132,000 
(ib., p. 8). 

The increasing percentage of exports to the United States is due 
largely to the development of rubber plantations. The quantities 
and values of the chief articles exported to the United States in 1919 
are shown in Table 27, in which the rupee has been converted at 
$0.40, which was approximately its average value during the year. 

Table 27. — Exports of Ceylon to the United States, 1919.^^ 



Article. 



Rubber pounds . . 

Coconut, desiccated, -do. . 

Oil, coconut do. . 

Tea do.. 

Tea waste do. . 

Plumbago tons. . 

Cocoa pounds . . 



Quantity. Value 



71,386,000 
36,169,000 
16,732,000 
17,963,000 

2,562,000 
4,000 

1,493,000 



S24,892,000 

4,036,000 

1,941,000 

3,970,000 

120,000 

013,000 

37^000 



1919 



Article. 



Cinnamon pounds . 

Citronella oil do. 

Precious stones 

Cardamoms pounds . 

Another 



Total. 



Quantity. 



1,530,000 
378,000 



67,000 



Value. 



$287,000 
101,000 
86,000 
35,000 
67.000 



,520.000 



a Supplement to Commerce Reports, No. 54a, Dec. 6, 1920. 
84 Commerce Reports, Aug. 28, 1920. 



824 C0L.01<7IAL TAEIFF POLICIES. 

Mauritius ^^ and Fiji are sugar colonies; the former exports minor 
quantities of coconut oil and aloe fiber; the latter, copra, fruit, and 
cattle. The development of North Borneo has only begun. There 
are a few rubber plantations and rubber is already the leading export. 
Other exports are tobacco and timber. Brunei exports coal, cutch, 
and rubber. Malta and Cyprus are in a state of high cultivation, 
particularly the former. Malta's population of over 1,800 to the 
square mile maintains itself not by manufacture but by the intensive 
cultivation of small patches of ground, the crops which yield the 
largest surplus for exportation being |3otatoes, oranges, lemons, 
onions, and corn. Manufacturing industries are of minor importance 
and include little other than cottons, filigree work, and cigars. The 
largest item of export trade in Cyprus is carobs (locust beans) ; other 
exports are fruits and cereals, raisins and wine, and animals. 



Import duties. — The tariffs in this group are set forth in schedules 
having up to about 200 classifications; \\4iere the number is consid- 
erably less, the use of general terms makes up the deficiency. Brunei, 
which has the shortest list, has items such as iron and ironware, in- 
cluding agricultural implements; spices; tinned or preserved provi- 
sions of all kinds; fancy goods, including watches, clocks, cameras, 
jewelry, and sporting goods. In this case there is no catch-all class 
for goods not specified and no free list; elsewhere there is an ad valo- 
rem rate on articles not enumerated and not on the free list — 5 per 
cent in North Borneo, 7J per cent in Malta and Ceylon,^^ 8 per cent in 
Cyprus, 12 per cent in Mauritius, and 12^ per cent in the Fiji Islands. 
The extensive schedules of these taiifis, however, render these general 
rates for unenumerated articles of little significance. The character- 
istic rate in Cyprus, North Borneo, and Papua is 10 per cent, which 
appears for most of the classes of manufactured articles. All of these 
tariff's except that of Mauritius have numerous ad valorem rates; 
generally the rates on foodstuffs, liquors, and tobaccos and some 
others are specific, and those on manufactured articles are ad valo- 
rem. In Brunei the ad valorem rates are 5 or 10 per cent, roughly, 
according as the articles are regarded as necessities or as luxuries; in 
Malta similar rates have been scaled up to reach 20 per cent ad valo- 
rem. ^^ Elsewhere the ad valorem rates are usually the same as those 
on articles not specified, but a few higher rates appear,-^ and some 
are lower, e. g., metals in Ceylon, 2^ per cent; and certain railway 
material in the Fiji Islands, 7 J per cent. (But see p. 371.) 

8= See Commerce Reports, July 9, 1920, p. 164, for the recent prosperity of this colony. 

85 The rate in Ceylon was raised from SJ to 7i per cent in June, 1917. 

«7 In Malta before the war the dutiable list was confined to alcoholic beverages, tobacco, sugar, grains 
and pulse, potatoes, oliveand cottonseed oils, animals and meats. The ad valorem rates introduced durmg 
the war were at first limited to 5 per cent; this rate was extended early in 191S to all unenumerated articles 
and at the same time selected articles were raised to 10 per cent; the schedule of Nov. 19, 1920. scales many, 
of these rates up to 7^, 10, 15,. or 20 per cent, and creseribes that in converting foreign currencies for the 
assessment of ad valorem duties, current rates of"exchange shall be used. 

3« During the war Ceylon's rate on motor cars reached 100 per cent (February, 1917). The number im- 
ported in 1916 was 570; in 191S, 10, On Mar. 7, 1919, the rate of duty was reduced to the normal 1\. Cy- 
prus levies 25 per cent on arms and 20 per cent on cartridges and perfumery. The minor importance of the 
ad valorem duties in Ceylon may be seen in the fact thatln 1913 when the common ad valorem rate was.SJ 
per cent the average duty collected on all imports vras 7.52 per cent, but in spite of the increase to 7-| per 
cent of the common ad valorem rate (June, 1917) the average duty collected fell in 1917 to 7.03 per cent and 
in the following year to 6.24 per cent of the value of the total imports. 



BRITISH CROWN COLONIES. 325 

The free lists are extensive^ though not so long as in the West 
Indies. Ceylon enumerates 23 kinds of machinery which enter free.'^ 
The Fiji Islands have the smallest list and Papua the greatest. The 
articles which appear generally on these lists are much the same as 
those mentioned in previous lists. 

The figures for the trade and for the customs revenue of Ceylon 
show that in 1914 the average ad valorem rate of duty on all imports 
and exports was 3 J per cent. Before June, 1917, however, the gen- 
eral import rate in Ceylon (including that on motor cars) was 6J 
instead of 7J per cent, cottons paid 4 instead of 5J per cent, and 
metals were free. Figures available for the Fiji Islands show that 
duty-free imports decreased as follows: 1908, 18 per cent; 1912, 16 
per cent; 19l6, 15 per cent; 1918, 11 per cent. Separate figures for 
revenue from import and export duties in 1915 show that the export 
duties on bananas, the only duty in force then, yielded only £4,000, 
while the import duties yielded £145,500. In the Fiji Islands the 
value of exports normally exceeds that of imports, and the exports 
increased rapidly in the years before 1916, while the imports remained 
practically stationary. The average rate of import duty upon all 
miports was in 1913, 16.6 per cent; in 1915, 16.4 per cent; and in 
1919, 14.5 per cent. 

Export duties. — With the exception of Malta, which levies no ex- 
port duties, these colonies have more or less extensive schedules. 
These duties are specific, except that about one-half of British North 
Borneo's 40 items pay 10 per cent ad valorem, Brunei has 15 items; 
the others not so many.*^ In general all the more important exports *^ 
are taxed, but in North Borneo cultivated rubber, coffee, and some 
other items are free. Rubber constituted in 1914 one-fourth, in 1916 
one-half, and in 1918 two- thirds of the total exports. 

In Cyprus one-half of the duties are 'Hi the dues" levied upon ex- 
portation in lieu of older agricultural taxes, but there is an 'export 
duty" on wine, spirits, and vinegar, and royalties on all minerals. 
In the Fiji Islands the previous export duty on bananas was doubled 
from January 1, 1913, and the duties on copra, sugar, and green fruit 
were imposed in 1916. The rates are very low. North Borneo has 
much increased its list of export duties since 1908, and in Ceylon and 
elsewhere the same tendency is seen. 

Preferential tariff of Cyprus. — In Cyprus a differential tariff was 
introduced in 1920. The preference is granted to all dutiable articles 
produced in and consigned from any part of the British Empire, but 
the differential exceeds 3 J per cent only for a few articles. See page 
360 for a full description of the rates, and for the short-lived prefer- 
ential tariff of Malta. For the differential tariff of Fiji see page 371. 

V. The Tariff of India. 

The tariff of India, although it does not differ greatly from those 
of Group 6, calls for separate consideration because of the commercial 
importance of India. The total foreign trade of India in 1913-14 

.89 In Mauritius machinery, fertilizers, disinfectants, insecticides, and chemicals for use in industry are 
dutiable, but the rates come only to 1^ cents or less per 100 pounds. 

■*" Cyprus has 19 items, including " tithe dues" and " royalties." 

<i In 1918 Ceylon's export duty on rubber was temporarily reduced from 2.4 cents a pound to 0.9 cent, 
because of the fall in prices. The export duties on copra and coconut oil were suspended through 1918. In 
1917 the export duties yielded 2.94 per cent of the value of total exports. The rate on plumbago is 3 per 
cent ad valorem. 



326 



COLOXIAL TARIFF POLICIES. 



exceeded $1,700,000,000, i. e., it was roughly two-fifths that of the 
United States for the sarae year. From the commercial point of 
view, India was before the war easily the greatest dependency in the 
world. Its foreign trade was much greater than that of Canada, 
about three times that of the whole French colonial empire, and 
excluding the British self-governmg Dominions, greater than the 
combined trade of all the other colonies of the world. Durmg the 
war, however, the trade of India remained stationar}^ in value while 
that of Canada and of many other colonies vastly increased. 

POPULATION AXD COMMERCE. 

AREA AXD POPULATION. 

The Empire of India consists of British India, which is under the 
direct administration of the English, and of Xative States which are 
administered by Indian princes under greater or less supervision of 
British officials. India may well claim the title of Empire, not only 
by reason of area and population but because there are no less than 
700 of these Native States under its government, not including looser 
relations, such as those of Baluchistan, Nepal, and Bhutan. Though 
over 300,000 of the population speak English, there are 33 languages 
more widely spoken, of which 11 are used by from 10,000,000 to 
82,000,000 persons each. The area and population of this empire 
and of the chief Provinces and the largest Native States are shown 
in Table 28. 

Table 28. — Area and population of India. 



states and provinces. 



: Area 
i (square 
! miles). 



Population 
in 19n. 



Popula- 
tion per 
square 
mile. 



British India 



Native States 1 


Total India i 


Chief Provinces: 1 
Pnited Provinces ' 


Beneal < 


Madras ! 


Bihar and Orissa ' 


Puniab { 


Bomhav : 


CentrarProvinces and Berar j 


Burma ! 


Largest Native States: 1 
Hyderabad 


Mvsore . 1 


Baroda ' I 


KaRhmir - 



393, 000 I 

no, 000 



244,221,000 
70, 889, 000 



2 223 
100 



1, 808, 000 


1315,110,000 


175 


107,267 


3 47, 182, 000 


440 


78, 699 


45, 483, 000 


578 


143,330 


41,405,000 


291 


83,181 


3 34. 490, 000 


415 


99, 779 


19,975,000 


200 


122,979 


3 19, 673, 000 


160 


99, 823 


13,916,000 


139 


230, .S39 


12.115.000 


52 



82.698 j 


13.375.000; 


162 


29.475 


5, 806, 000 i 


197 


8; 182 1 


2.033,000 1 


248 


84,432 


3; 158, 000 : 


37 



1 Statesman's Year-Book, 1920, subtracting the population of Aden (46,000). Aden was long politically 
a part of India but ^vas transferred to the colonial office from Mar. 1, 1921. For its tariff, see p. 295. 

3 Dense as is the population of India, considerable land remains uncultivated. In Assam, Burma, and 
the North West ± rentier Provinces (with populations of 127, 52, and 164, respectively, per square mile in 
1911) the "culturable waste other than falloiV in 1916 was 42,100,000 acres and only 32,700,000 were actually 
cropped or "current fallow."' In the rest of British India (i.' e. , the other Indian Provinces, but excluding 
the Native States included within their boundaries) the cultuxable waste was 70,200,000 acres as compared 
to 214,800.000 cropped and fallow. British India and Burma also include 85,200,000 acres of forest and 
143,200,000 not adaptable to cultivation. (Statistical Abstract of British India, 1907-8 to 1916-17.)- In 
1917-18, 46,000.000 acres in India were under irrigation. State irrigation works accounted for 26,090„9CO. 
(Statesm-an's Year-Book, 1920, p. 139.) 

8 Preliminary figiires of the census of Mar. 16, 1921, show a total population of over 319,000,000, but 
in the United Provinces (2,600,000), Bihar and Orissa (1,400,000), and Bombay (1,800,000). 



BEITISH CEOWN COLONIES. 



327 



PEODUCTION AND INDUSTRY. 



India is an agricultural country. According to the census of 1911 
over two-thirds of the population were engaged in pastoral and agri- 
cultural pursuits^ and only 11 per cent were engaged in industry. 
The acreage devoted to the chief crops is shown in Table 29. 

Table 29. — Acreage devoted to the chief crops of India, 1917-18^'^ 

[Millions of acres.] 
81 



Cotton 15 

Oil seeds (linseed, sesame, rape, mustard, etc.). 14. 1 

Sugar 3 

Tobacco 1 

Jute 2.7 

Indigo 7 

Tea 6 



Rice 

Millet 38 

Wheat 26 

Barley 8. 5 

Maize 6. 5 

Other grains and pulse 47 

Fruits, spice, vegetables, etc 8. 3 

Fodder crops 8. 1 

The chief mineral products of India are coal, gold, manganese ore, 
salt, tungsten, saltpeter, and mica. Special importance attaches to 
Indian manganese, tungsten ore (wolfram) , and mica, and in the last 
two named, India holds a commanding position in the world's supply. 
The values of the chief minerals produced in India in 1917 are shown 
in Table 30. 

Table 30. — Values of minerals produced in India in 1917 .^^ 

[In thousands of pounds sterling.] 

Coal 4,512 

Gold 2, 282 

Petroleum 1, 093 

Manganese ore •*'' 1, 501 

Salt 917 



Saltpeter 

Lead 

Tungsten ore . 

Mica 

Silver 



528 
509 
623 
<4508 
238 



By far the greater part of the Indian industry is still in the handi- 
craft stage, but modern large-scale power mills are being introduced. 
Over one-half million operatives are employed in the textile mills. 
The 74 mills making jute yarns and textiles average over 3,500 em- 
ployees each. Jute and cotton ginning and pressing mills employ 
another 150,000, and two important steel and iron plants engage the 
services of 17,000 men. Other industries operating on up-to-date 
lines are rice mills, printing establishments, tanneries, tile and brick 
yards, sawmills, oil refineries, and sugar and tobacco factories. ^ 

Table 31 gives a few figures to illustrate the increase in the produc- 
tion of manufactured goods in India. The two jute products show 
the most rapid progress. 

Table 31. — Output of chief products of Indian industry. 



Products. 


Average, 
1896-7 to 
1900-01. 


Average, 

1901-2 to 

1905-6. 


Average, 

1911-12 to 

1913-14. 


Average, 

1915-16 to 

1917-18. 


Cotton goods, gray 

Cotton goods, other 

Cotton yarn 

Jutebags 


millions of pounds. . 

do 

do.... 


81 

11 

444 

bill 

6 182 


110 

325 

577 
C206 
c427 
3.6 


192 
66 
629 
324 
985 
5 


252 

97 

651 

d 715 


Gunny cloth 


millions of yards 


d 1 177 


Woolen goods 


millions of pounds. 


' 10 











'H Stelist in Board of Trade Journal, Sept. 1, 1921. 

6 1894-5 to 1898-9. 

c 1900-01 to 1903-4. 

d Exports only; not total production. 

" Statistical Abstract relating to British India for the year 1917-18 (pp. 128, 9). 

« Statistical Abstract relating to British India for 1917-18, p. 237. 

" Values given for manganese ore and mica are export figures instead of production figures. 



328 



COLONIAL TAEIFF POLICIES. 



Naturally the articles manufactured in India are consumed largely 
in the local market, but there is also a considerable export trade in 
articles wholly or mainly manufactured. Table 32 shows the values 
of the chief items of this class for the year 1918-19. 

Table 32. — Exjmrts from India of articles uJiolly or mainly manufactured, 1918-19} 
[In thousands of pounds sterling.] 



Article. 



Value. 



Percent- 
age of 
the total 
exports of 

Indian 
products. 



Jute; 

Gunny cloth 1^ 



Per cent. 
12.4 



Gunny; bags . 

Cotton, twist and yarn 

Piece good's, colored, 

printed, dyed 

Piece goods', gray (un- 
bleached) ' 



14, 889 
4,816 

2,981 

1,224 



3.0 



Article. 



Value. 



Percent- 
age of 
the total 
exports of 
Indian 
products. 



Hides, tanned or dressed.. 
Skins, tanned or dressed. . 

Opium 

Paraffin vrax 

All other 

Total manufactures. 





Per cent. 


4,745 


3.0 


1,701 


1.1 


2,086 


1.3 


745 


.5 


5,336 


3.3 


58, 320 


36.5 



1 Annual Statement of the Sea-borne Trade of British India for 1919. 

India remains, however, a producer of raw materials and an im- 
porter of manufactured goods, as may be seen by the follovdng per- 
centages, which show the proportion of India's trade which was made 
up of articles mainlv or Vv'hollv manufactured in the years 1912-13, 
1913-14, 1917-18, and 1918-19, respectivelv: Imports, 76.4, 79.2, 
73.1, and 73 per cent; exports, 23.7, 22.4, 31.2, and 36.6 per cent,*^ 

In 1918 companies incorporated in India exceeded 2,600 in num- 
ber, with a paid-up capital of £66,000,000.*^ There are, of course, 
many companies doing a business in India which are incorporated 
elsewhere. 

TRADE or IXDIA. 

Tables 33 to 39, inclusive, are presented to show the chief features 
of the trade of India. They relate only to its sea-borne commerce, 
and unless otherwise stated omit bullion and specie, Government 
stores, and reexports not of Indian production. Table 33 shows the 
steady growth of Indian trade up to the outbreak of the war. 



« The percentage is reckoned on the exports of Indian production, £159,539,000. The figure of Table 
33 includes reexports. 

*s Statesman's Year-Book, 1920, p. 140. Comr)anies floated from Mar. 31, 1919, to Mar. 31, 1920, numbered 
906, and were capitalized at £ 183,000,000. The Times Trade Supplement (London), Oct. 16, 1920. 



BEITISH CROWN COLONIES, 



329 



Table 33. — Growth of the trade of India — Trade in merchandise, including Government 

stores. 

[In thousands of pounds sterling.] 



Year. 



Fiscal year ended Mar. 31 

1865 to 1869, average. 

1875 to 1879, average . 

1885 to 18S9, average. 

1895 to 1899, average. 

1900 to 1904, average . 

1904 to 1909, average . 

1910 to 1914, average. 

1914-15 

1915-16.. 

1916-17 

1917-18 

1918-19 , 

Calendar years: 

1919 

1920 



Imports. 


Exports. 


29, 898 


54, 703 


33,530 


52,810 


45, 125 


65, 135 


43, 538 


64, 707 


56, 452 


83, 281 


79, 899 


110,296 


101, 113 


149, 487 


96, 621 


121, 451 


91, 682 


132, 987 


106, 833 


164, 874 


109, 570 


163, 283 


1 125, 708 


1 170, 195 


2 204,207 


2 123, 680 


215, 087 


194, 620 



Total. 



84, 601 
86,340 
110,260 
108, 245 
139, 733 
190, 195 
250, 600 
218, 072 
224, 669 
271, 707 
272,833 

1 295, 903 

2 327, 887 
409, 707 



1 From Annual Statement of the Sea-borne Trade of British India for the fiscal year 191.S-19. EarUer 
figures are from the Review of the Trade of India for 1917-18 and preceding years. 

* Commerce Reports, Feb. 16, 1921. The figiires, given in hundreds of tho^lsands of rupees, have been 
converted at 15 rupees to a pound. The table in the Commerce Reports gives a high, lovv, and average New 
York exchange rate for rupees for eacli month during 1920. The monthly average declined from 36| cents 
in April to 25J cents iii December. 

Table 33 brings out tlie fact that India's adverse balance of trade in 1920 is unprecedented. India nor- 
mally imports considerable quantities of gold and silver— the total for the last 55 years is said to be £671,- 
560,000. 

Table 34 shows that Great Britain had been for decades slowly los- 
ing her practical monopoly of India's import trade, but that in the 
dozen years before the war it was the British possessions rather than 
the United Kingdom whose trade with India failed to develop as 
rapidly as India's total imports and thus allowed foreign countries 
to increase their shares. 

Table 34. — Share of the British Empire in the trade of India before the war. 



Country. 


Percentage of imports. 


Percentage of exports. 


1885-86 


1902-3 


1913-14 


1885-86 


1902-3 


1913-14 


United Kingdom 


80.4 
10.3 
9.3 


66.5 
9.5 
24 


64 

5 

31 


41.6 

121.7 

36.7 


25 

113 

62 


23.5 




1 14 


Other countries 


62.5 







1 Thesefigures are overstatements to the extent that exports, particularly to Singaporeand Hongkong, pass 
through to foreign countries. The conunittee appointed in April, 1920, by the Government of India to 
consider the question of imperial preference makes an allowance of the round figure of £5,000,000 for this 
item for the year 1913-14, and thi^; allowance reduces the share of British possessions in the exports of India 
from 14 to 11 per cent and increases that of foreign countries to 65. 5. Similar allowances should be made 
in the preceding columns. 



These percentages, however, do not tell the whole story. The 
trade of India v/as growing rapidly up to the outbreak of the war and 
the increase in the total value of imports from Great Britain greatly 
exceeded that from all other countries combined. The increase 
shown by the figures for 1913-14 as compared with those of 1900-1901 
was for Great Britain £45,937^000 and for all other countries 
£25,376,000, 



330 



COLONIAL TARIFF POLICIES. 



Table 35 shows the average shares of the leading countries in the 
trade of India for the years immediately preceding the war, and for 
the individual years during the war period. It brings out the rapid 
increase in the trade of the United States and Japan through a period 
when India's trade was stationar}^. 

Table 35. — Shares of the leading countries in the trade of India before and during the vjor.^ 

PERCENTAGE OF IMPORTS. 



Prewar 

average 
1909-10 to 
191.3-14 



1914-15 


191.5-16 


1916-17 


1917-18 


1918-19 


67.4 


59.4 


58.7 


54.4 


45.5 


3.3 


5.7 


8.9 


12.1 


19.8 


3.5 


6.0 


7.3 


7.9 


9.5 


5.9 


10.2 


8.9 


7.8 


6.7 


2.4 


2.9 


2.6 


3.5 


3.3 



1919-20 



From— 

United Kingdom — 

Japan 

United States 

Java 

Straits Settlements. 



62.8 
2.5 
3.1 
6.4 
2.1 



50.5 
9.2 
12.1 



PERCENTAGE OF EXPORTS. 



To- 
United Kingdom 
Japan 

United States... 

Egypt 

Ceylon 

France 



25.1 


31.7 


38.0 


33.1 


25.6 


28.5 


7.5 


8.6 


9.4 


11.5 


14.1 


11.6 


7.5 


9.6 


10.8 


12.7 


12.6 


13.1 


.8 


1.0 


1.1 


1.3 


10.2 


5.8 


3.7 


4.2 


4.7 


4.3 


4.1 


4.2 


6.6 


4.9 


4.8 


5.9 


3.6 


3.5 



29.6 
14.3 
14.9 



1 Review of Trade of India in 1918-19 and preceding years.- (B. T. J., Apr. 14, 1921.) In 1920-21 the 
shares of the United Kingdom, United States, and Japan in India's import trade were respectively 61, 
10.5, and T.9 per cent. Of the export trade, the United Kingdom's share fell to 22 per cent and Japan's 
to 9.5 per cent. (B. T. J., Dec. 1, 1921.) 

As in other colonial empires, the share of the mother country in the 
trade of its colony India is somewhat increased by the addition of 
Government stores to commercial statistics, since Government stores 
are in nearly all cases the product of the mother country. The 
amount of these imports in the case of India averaged before the war, 
£3,882,000, but rose in 1917-18, to £9,287,000, and in 1918-19, to 
£13,019,000. 

In 1917-18, 85 per cent of these imports on behalf of the Govern- 
ment came from the United Kingdom and 12 per cent from Australia 
but in the following year the share imported from the United Kingdom 
decreased to 70 per cent while Australia increased its share to 26 
per cent.*^ 

Tables 36, 37, 38, and 39 show the value of the chief articles or 
classes of articles imported into and exported from India in 1913-14 
and 1918-19, and, somewhat more in detail, the trade with the 
United States in the same years. In comparing Indian statistics of 
these two years, two points should be kept in mind. First, that the 
rise of prices in the Orient has been much less than in the Occident, 

" Review of Trade of India in 1918-19, p. 13. See The Times Trade Supplement, Nov. 13, 1920, Aug. 6, 
1921, and Oct. 1, 1921, respectively, for a summary of the Indian stores purchase committee's report, which 
advocates changes to encourage local purchase and production; the statement of Sir Thomas Holland that 
pending the determination of Indian fiscal policy the Government accepted the principle of purchasing 
supplies by strict business standards as to price and quality; and the resolution olthe legislative assembly 
of India in favor of purchase in the cheapest marlcet, together with the reasons why the high commissioner 
considered that the abnormal conditions had justified his giving contracts to British firms if their bids 
exceeded those of foreign firms by no more than 10 per cent; and see Commerce Reports, Apr. 13, 1921, for 
rales requiring that a preference be given to goods produced in India and to goods purchasable m India. 



BRITISH CROWN COLONIES. 



331 



and second, that the statistics for 1918-19 have been converted at 
the official ratio of 15 rupees to the pound sterling. ^^ 

Table 36. — Imports into British India} 
[Value in thousands of pounds sterling.] 



Article. 


1913-14 


1918-19 


Article. 


1913-14 


1918-19 


Class I— Food, drink, and 
tobacco: 


9,971 
1,252 

1,649 

1, 155 

602 

1,912 


10, 409 
1,925 

1,292 
1,606 
1,431 
3,664 


Railway plant and rolhng 
stock. - 


6,690 

4,011 

4,291 

1,606 

1,525 
1,511 
1,669 
1,729 

1,423 

5,783 


696 




Metals, other than iron and 
steel, and manufactures 
thereof 




Liquors 






2,402 


stores 


Cutlery, hardware, imple- 
ments (except machine 
tools), and instruments. . 

Chemicals, drugs, and med- 


Spices 




Tobacco . . 


3,907 


other 




2 813 


Total, Class I 


16, 441 


20, 327 


Paper, pasteboard, and sta- 






2,280 
1,939 
1,437 


Class II — Raw materials and 


2,935 
1,205 

2,898 


2,479 
1, 761 
2,386 


Dyes and colors 


produce and articles mainlj'' 


Apparel 


unmanufactured: 
OUs. 


Glassware and earthenware 
Carriages and carts, includ- 
ing cycles and motor cars . 
Miscellaneous manufac- 


1,201 


Textile materials (rav,) 

Other , 


459 




7,350 


Tntfll Class TT 


7,038 


6,626 


Total Class III 




96, 769 


82 168 


Class III— Manufactured arti- 
cles: 
Yarns and textile fabrics . . 


50, 360 
10,663 

5,508 


45, 495 
8,281 

3,906 


Miscellaneous articles and un- 
classified 


^ 8^1b0 


1,916 


3,570 


Metals, iron and steel, and 
manufactures of 


Total 


122, 165 


112,689 


Machinery of all kinds, in- 
eluding belting for ma- 
chinery. 









» Annual Statement of the Sea-borne Trade of British India, fiscal years ending Mar, 31. 
Table 37. — Exports of Indian merchandise from British India fi 





[Value in 


thousands of pounds sterling.] 






Article. 


1913-14 


1918-19 


Article. 


1913-14 


1918-19 


Class I — Food, drink, and to- 


30,094 
9.983 
3; 085 


26,714 
11,851 
3,611 


Other . .. 


3,213 


3,673 


bacco: 
Grain, pulse, and flour 

Tea 


Total, Class II 




81,642 


57,669 


Class Ill-Manufactured articles: 
Yarns and textile fabrics. . . 
Hides and skins, tanned or 

dressed; and leather 

Chemicals, drugs, and med- 


Other . ...... 


27, 148 

2,833 

2,637 

696 

3,080 






44,691 


Total, Class I 


43, 162 


42, 176 




6,468 
3,065 


Class II — Raw materials and 
produce and articles mainly 
nnTTiaTiufactured ; 


50, 429 

17, 117 
7,815 
1,377 

1,034 
657 


34, 193 
7,479 
6,228 
2,049 

1,704 
2,343 


Dj^es and colors 


1,373 
2,725 


Textile materials (raw) 


Other '. . 


gpeds 


Total, Class III 




Hides and skins, raw 


36, 394 


58, 320 


Gums, resins, and lac 

Metallic ores and scrap iron 
or steel for remanuf actur e. 
Oils 


Miscellaneous and unclassified . 
Total 




1,602 


1,374 


162, 801 


159, 539 







a Annual Statement of the Sea-borne Trade of British India, fiscal years ending Mar. 31. 
. ■is The value of the Indian rupee was stabilized in the 1890's at Is. 4d. or $0.32443. (Acts of June 26, 1893 
and Sept. 15, 1899. Statesman's Year-Book, 1902, p. 168.) The war, however, produced a tremendous 
demand for gold and silver in the Orient, and India alone absorbed silver at a rate double that of the world's 
production. (The Statist, Nov. 1, 1919, p. 981.) Under this strain the machinery for fixing the value of 
the rupee broke do\vn and its value in terms of gold began to rise in August, 1917. In September, 1919, an 
attempt was made to " peg ' ' the rupee at 2 shillings. In January, 1920, the Indian currency commission 
reported in favor of r efixing the value of the rupee permanently at 2 shillLngs. This recommendation was 
accepted and remains the official objective, but the value of the rupee has not yet been stabilized. After 
reaching the maximum in 1919of2s. 4:M. it rose in the summer of 1920 to 2s. lOd.. and then fell sharply. The 
Governmentceasedtosupportthemarket atls.lO^d.. and in October, 1920, the value of the rupee fell to Is. 
6^d., andin December, almost to ls.5d. Intermsof American currency the rupee fell from a maximum of 
48i centsin March, 1920 to a minimum of 24 cents in December, 1920 and in March, 1921, it stood at about 
25 cents. ( See Commerce Reports, Feb. 28, 1920, Feb. 16 and 28, 1921, and The Times Trade Supplement, 
Aug. 16, 1919, Feb. 7, Oct. 16 and Oct. 30, 1920, and passim. ) 

One hundred thousand rupees make a "lakh, "and 100 lakhs make a crore. In writing rupees, therefore, 
commas are used toindicate lakhs and erores instead of millions, thus 53,15,83,000 Rs. is read 53 crores, 15 
lakhs, and 83 thousand rupees. A lakh is nominally equivalent to $32,443, and a crore to $3,244,300. The 
rupee is divided into 16 annas (each was equal to one English penny ) and the anna into 4 pice or 12 pie. 



185766°— 22- 



-22 



332 



COLONIAL TARIFF POLICIES, 



Table 38, — Imports into British India from the United States ^ 
[Value in thousands of pounds sterling.] 



Article. 


1913-14 


! 
1918-19 


Article. 


1913-14 


1918-19 


Iron and steel 


282 
168 
255 

97 

155 

2 

33 
1,540 

33 

16 


3,692 
928 
663 
421 
167 

1, 465 
413 
305 


Spiiit 


41 
3? 


71 


Macliinery and millwork 


Chemicals 


95 


Hardware 


Drugs aiid TneriiHnp.s 


105 


Instruments and apioaratus 


Dyeing and tanning substances 
Cotton piece goods 


341 


Motor car and cycles, etc.^ 


173 
9 

84 
273 


222 


Railway plant and rolling stock . 


Paper and pasteboard ... . 


400 


Clocks and watches 


Wood and timber. . 


56 


Oils, mineral 


Other articles 


1,372 


Provisions and oilman's stores. 
Tobacco . . 


Total 




3,194 


10, 768 







1 Review of the Trade of India, fiscal years ending Mar. 31. 

2 It has been pointed out that statistics of trade between colonies and foreign countries are likely to be 
incomplete, because the mother country acts as an entrepot and is credited with colonial trade which 
should have been attributed to foreign countries. Recent imports of motor cars into India illustrate the 
opposite condition and cast doubt upon the accuracy of the figru-es for 1918-19. The Indian statistics for 
1919-20 show imports of 9,925 automobiles, of which 9,353 are credited to the United States. But the man- 
ager of the company concerned has stated that during the corresponding period of shipment no less than 
5,532 cars were shipped to India from the Canadian branch of a, single American company. As the cars 
bore an American name and as many of them were shipped through New York, they were not unnaturally 
recorded as imports from the United States. (Board of Trade Journal, Dec. 30, 1920.) Similarly statistics 
of exports to tne United States may be inflated by the inclusion of exports to Canada. For instance, 
Ceylon's exports to Canada, usually recorded as less than 2 per cent of the total exports, rose in 1918 to 
nearly 6 per cent of the total, and tliis is explained by the fact that the United States restricted the importa- 
tion of rubber in that year and the Canadian imports of Ceylon rubber were therefore made directly. '(Sup- 
plement to Commerce Reports, No. 54a, Dec. 6, 1920, pp. 2, 9.) 

Table 39. — Exports of Indian produce to the United States.'^ 
[Value in thousands of pounds sterling.] 



Article. 



Jute, raw. 

Gunny bags 

Gunny cloth 

Hides and sldns, raw, exclud- 
ing cuttings 

Dressed or tanned 

Lac 

Grain, pulse, and flour 

Seeds, castor 

Linseed 

Spices 

Tea, black and green 

Oils, vegetable 

Myrabolans 



2,457 
1,008 
6,816 



208 

588 

11 

204 



1918-19 



1,268 

1,471 

13, 151 

3,585 

278 
8S0 
357 



141 
83 
62 



Article. 



Indigo 

Cotton, raw 

Coir m.anufactures, excluding 

rope 

Wool, raw 

Saltpeter. 

Manganese ore 

Mica 

Paraffin wax 

Manures 

Other articles 



8 
55 

39 
28 
22 

107 
67 
22 
54 

206 


153 
40 

11 


134 
11 


7 

6 

386 



Total. 



22.043 



1 Review of Trade of India, fiscal years ending Mar. 31. 



TARIFF OF INDIA, 



Tarif "history .^^ — In 1858 when the British Government took over 
from the East India Co. the control of India, the import duties were 
3^ per cent or 5 per cent ad valorem on British goods and double 
those rates on foreign goods. The financial difficulties ^^ caused by 
the mutiny led in 1859 to the repeal of these differential duties and 
the raising of the general rate to 10 per cent with 20 per cent on 
luxuries, and 5 per cent on yarn and twist. The free-trade move- 
ment was then at its height and through the sixties and seventies 
there were many reductions of these rates and frequent additions 

■•s Strachey, Sir John: India; Its Administration and Progress, 1911, fourth edition, pp. 190-202. Lajpat 
Rai: England's Debt to India, 1917, pp. 141-152. 

&" The differential duties rmght have been repealed had there been no fiscal difficulties. All the other 
colonial preferences had been abohshed in 1855, or earher. .See p. 634. 



BKITISH CKOWN COLONIES. 333 

to the free list. By 1875, 5 per cent was the general rate on imports, 
and all export duties had been abolished except those on rice, lac, 
and indigo. 

About 1870 the Lancashire cotton manufacturers, perhaps the 
world's most uncompromising free traders, demanded that the 
duties on cotton be removed. At that time, excluding salt and 
liquors, nearly two-thirds of the customs revenue was derived from 
cottons. The financial diihculties of removing the duties were 
therefore considerable and it was not until 1878-1882 that these 
duties and with them the duties on less important articles v/ere 
abolished. For some years salt and liquors alone paid import 
duties and rice alone paid an export duty. Of countries of any 
importance, India afforded the most thoroughgoing example of free 
trade in the world. For political reasons, however, duties were soon 
imposed on arms and ammunition, and when more revenue vfas 
required in 1888 a duty was laid on petroleum, an article of wide 
consumption and one which was the more easily taxed, since no 
British interest was injured. 

In 1894, because of industrial depression and the fall of the gold 
value of rupees, the Indian Government faced a prospective deficit 
of two million pounds. A revenue tariff was restored, and again 
practically all imports became dutiable at 5 per cent ad valorem, 
but with the most important exception of cottons, which then con- 
stituted nearly one-half of the total imports. The need for revenue 
continued, and in December of the same year the subject was reopened 
on the basis of imposing a duty on cottons with an offsetting excise 
tax on the local product. After certain changes, in February of 
1896 the matter was settled for the next twenty years by fixing at 
3h per cent the rate on all cottons, whether imported or manufactured 
in Indian mills, in so far as the mills were operated by power; and 
yarn was put on the free list. 

The tariff of March, 1894, remained practically unchanged until 
the war. There were numerous small changes, however, such as 
the naming of additional machines for free entry and the reclassifica- 
tion of cottons. Of the system the Government of India said in 1903 : 

It is entirely free from any trace of preferences and from any protective intention. 
* * * WTiile we do not deny that, in theory, some minute protective effects may 
be attributed to our present system, yet we hold that such effect is quite insignifi- 
cant in practice, firstly, because in the case of the largest article of import, and some 
minor ones, an equivalent excise duty is imposed; secondly, because a large part of 
the imports consists of articles which, in either kind or quality, India does not produce 
at all; and thii'dly, because our general import duties are on a very low scale, such as 
would in most continental countries be regarded as merely nominal. Almost the 
only exception to the general rule is the duty on petroleum. Our countervailing 
sugar duties we do not regard as protective in the true sense of the term. ^^ 

In 1910, in view of the reduction of revenue from the opium trade, 
the duties on mineral oil and on tobacco were increased, though an 
oil industry was being developed in Burma, and both of these in- 
creases had. a certain protective influence. 

The war brought two important changes to the Indian tariff — an 
increase of the general rates to 7^ per cent ad valorem in March, 1916, 
and the beginning of a protective system by a like increase of the 
duty on cottons in March, 1917. This duty was raised from 3-|- per 

" Views of the Government of India on the Question of Preferential Tariff, Gt. Brit., Pari. Papers, Cd. 
1931, p. 57. 



334 



COLONIAL TARIFF POLICIES. 



cent to 7i per cent without any change in the excise tax, thus afford- 
ing protection to Indian weaving mills to the extent of 4 per cent. 

Under this tariff importations of tobacco, liquors, and other articles 
dutiable at rates higher than 7^ per cent ad valorem almost offset 
the importations at lower rates, including the free list; in 1918-19 
the duty collected showed an average rate of 7.23 per cent upon all 
merchandise imported. 

Present tariff'.— The budget for 1921-22 proposes a further general 
increase, which went into effect provisionally on March 1, 1921. 
The chief changes in the new tariff are the raising of the general ad 
valorem rate to 11 per cent and the larger increases in the rates on 
luxuries. The tariff is set forth in a schedule of 139 numbered items, 
but many of these have subheads, so that the total number of specifi- 
cations is about 400. These specifications are inserted not for the 
purpose of defining the tariff' rate, which is 11 per cent in the great 
majority of cases, but for listing of the official valuations. The 
valuations are fixed by the governor general in council, usually for 
the calendar year, but they are subject to revision at any time. 

Table 40 summarizes the present tariff, omitting minor items and 
grouping others together, and shows the chief increases of rates 
since imports were made generally dutiable in 1894. 

Table 40. — Import tariff of India, 1921.^ 



Articles. 



Tariff rates. 



1921 



1917 



1894 



Articles which are free of duty, Nos. 1 to 27: 

Raw cotton, wool, hides, and skins 

Cotton twist, jarn and sewing thead 

Wood pulp and rags 

Arms, ammunition, and military stores for poilce or mili- 
tary use. 

Quinine 

Agricultural machines 3 

Dairy appliances s 

Water lifts, sugar mills, oil presses, to be worked hy animal 
power. 

Living animals 

Manures of all kinds 

Books, maps, and music 

Articles which are liable to duties at special rates, Nos. 28 to 44: 

Sugar 

Denatured alcohol 

other alcoholic beverages 



Cigars and cigarettes 

other manufactured tobacco. 
Salt 



.per pound.. 



Matches per gross of boxes. . 

Coal, coke, and patent fuel perton.. 

Petroleum per gallon. . 

Arms, and their parts, gun powder, cartridges, and ma- 
chinerv for making them. 
Articles which are liable to duty at 2^^ per cent ad valorem, 
Nos. 45 to 61: 

Grain and pulse 

Vinegar in casks 

Copperas 



Free . . 
....do. 

do. 

....do. 



.do., 
-do., 
-do., 
.do.. 



15 per cent. . 
7J: percent... 
Various 

specific. 
75 per cent . . 
2 R. 4a.... 
Various 

specific.5 

12 a' 

8a 

1-1 a 

20 per cent 

or specifics 



21 per cent . 

do 

do 



Free . . 

do- 

....do. 
....do. 



-do., 
.do., 
.do., 
-do.. 

.do., 
.do., 
.do.- 



10 per cent. 
7i percent.. 
Various 

specific. 
50 per cent . 
1 R. 8a.... 
Various 

specific. 
Ih per cent . 



lia 

20 per cent 
or specific. 



2^ per cent . 
do 

do 



Free 

Do.2 
Do. 
Do. 

Do. 
Do. 
Do. 
Do. 

Do. 
Do. 
Do. 

5 per cent. 

Do. 
Various 

specific. 
5 per cent.* 

Do. 
Various 

specific. 
5 per cent. 
Free, 
la. 

10 percent or 
specific. 



Free. 

5 per cent. 
Do. 



1 Board of Trade Journal, Apr. 14, 1921, pp. 411-415. 

2 Dutiable at 5 per cent in 1894, but put on the free list in 1896. 

3 The machines are enumerated in the law. 

4 Made dutiable at specific rates in 1910. 

5 The duty varies from port to port and is the same as the local excise duty. Salt imported for certain 
manufactures and, in the Provinces of Bengal and Bihar-Orissa, for salting fish is free. 

6 Eight of ten subheads have specific duties which are collected unless they are found to be less than 
20 per cent ad valorem. 



BEITISH GROWN COLONIES. 335 

Table AO.— Import tariff of India, 1921— Qontinned. 



Articles. 



Articles which are liable to duty at 2\ per cent ad valorem, 
Nos. 45 to 61— Continued. 

Firewood 

Telegraphic instruments and apparatus 

Old iron and steel, pig iron, cast steel, iron and steel cables, 
beams, sheets, rails, pipes, nails, etc. 

Railway material 

Printing and lithographing material 

Ships and boats 

Tea chests 

Lead sheets for tea chests 

Racks for withering tea leaf 

Machinery, to be worked by other than animal power 

Aeroplanes 

Articles which are liable to duty at 11 per cent ad valorem, 
Nos. 61 to 120: 

Machinery, to be worked by manual or animal labor 

Cutlery, hardware, and all manufactures of iron and steel, 
n. 0. s., and of other metals. 

Carriages and motor trucks 

All foodstuffs, n. o. s 

Yarns and textile fabrics, of flax, hemp, jute, and wool 

Cordage, silk yarns, tanned hides, skins and leather ware. . 

Paper and stationery 

Wood, timber, furniture 

Cement, brick, stone, and other building materials 

Glass, earthenware, and porcelain 

Tallow and wax 

Gums^ resins, and lac 

Chemicals, drugs, and medicines 

Dyeing and tanning substances 

Explosives 

Soap and toilet requisites 

All other articles not otherwise specified 

Articles which are liable to duty at 20 per cent ad valorem. 
Nos. 121 to 139: 

Motor cars 

Motor cycles 

Bicycles and accessories 

Pneumatic tires 

Clocks and watches 

Musical instruments 

Manufactures of silk 

Cinematograph films 

Prints, engravings, and photographs 

Umbrellas 

Smokers' requisites 

Toys, games, playing cards, and requisites for games and 
sports. 

Gold plate, and manufactures of gold 

Silver plate, and manufactures of silver 



Tariff rates. 



1921 



1917 



2i per cent. . 1 2-| per cent. 

.'...do [ do 

do t do 



....do 

do 

do 

do 

do. 



.do., 
.do., 
.do., 
.do., 
-do.. 



do I do 

do I do 

do ! 71 per cent 



11 percent. .; do. 

do i do. 



do.. . ...\ do. 

do j do. 

do .....do. 

do ■ do. 

do I do. 

do ; do. 

do do. 

do do. 

do i do. 

do -do. 

.do do. 

-do I do. 

■do I do. 

.do j do. 

.do do. 




.do [ do 

-do ; 15 per cent. 



Free. 

Do.7 
1 per cent. 

Free. 

Do. 

Do. 

Do. 

Do. 

Do. 

Do. 
.5 percent. 



Do. 
Do. 

Do. 
Do. 
Do. 
Do. 
Do. 
Do. 
Do. 
Do. 
Do. 
Do. 
Do. 
Do. 
Do.' 
Do. 
Do. 



Do. 
Do. 
Do. 
Do. 
Do. 
Do. 
Do. 
Do. 
Do. 
Do. 
Do. 
Do. 

Do. 
Do. 



' Dutiable at 5 per cent unless imported by a railway company. 
8 Gunpowder, 10 per cent. 

Export duties. — The existing export duty on rice — three annas a 
maund (87f pounds) — has been in force since 1896. In 1916 export 
duties on tea, jute, and jute products were added, and in the following 
year the rates on jute and jute products were doubled, becoming: 

On tea, ^2 1| rupees, or 48 J cents, per 100 pounds. 
On jute, 3^ rupees, or $1.46, a bale of 400 pounds. 
On sacking, 20 rupees, or $6.49, a ton of 2,240 pounds. 
On Hessian cloth (burlap\ 32 rupees, or $10.38 a ton. 



62 Since 1903 a small tax (cess) of 1/48 of a penny a pound on all Indian tea exported has been levied at the 
request of the industry, and the revenue is used to promote the sale and consumption of the product abroad. 
The Government acts merely as a collecting agency, and the advertising campaign is controlled wholly by 
the tea planters. For the year endiug Mar. 31, 1919, this tax yielded $146,000. A similar "cess" on jute, 
levied since 1912 for the benefit of the Calcutta Improvement Trust, yielded nearly $260,000. A "cess" of 
one rupee per maund levied since April, 1918, to provide funds for research in the indigo industry, yielded 
nearly $16,000in 1918-19. (SupplementtoCommerceReports,No.53d, June2, 1920, p. 29.) Seep. 371. 



336 COLOls^IAL TARIFF POLICIES. 

At the time when the specific duties were imposed upon sacking 
and burlap, the rate w^as approximately 5 per cent of the value of the 
raw jute used in their manufacture. The subsequent rise in price has 
more than offset the doubling of the rate. In 1918-19 there was paid 
in export duties $11,971,590 upon a total exportation of jute, rice, and 
tea of $344,240,000, so that the average rate of duty' upon dutiable 
articles was 3.48 per cent ad valorem. 

Native States, — Throughout the greater part of India, the Native 
States have abandoned the right, or at least the practice, of levying 
customs duties. But Kashmir and the border States whose foreign 
relations are controlled by the Indian Government — Nepal, Bhutan, 
and the States of Kalat and Las Bela in Baluchistan— have separate 
tariffs. These tariffs are applicable to goods imported into these 
States from India, but payment of the Indian customs tariffs upon 
such goods may be avoided by shipping them through in bond. The 
rates in Kashmir (tariff of 1912) are the same or lower than those in 
force in India. Thirteen schedules of rates levied upon imports, 
exports, and transit trade at the frontier or at interior points in Kalat 
and Las Bela are given in Kelly's Customs Tariffs of the World. 

VI, Differential Tariffs in the Crown Colonies and in India. 

Previous to the free-trade period of the middle of the last century 
differential duties were common in the British Crov/n colonies. They 
were abandoned by the British Empire when the policy of free trade 
was adopted (1845-1860), and from that time until after 1914 there 
were practically none. But even when the triumph of free trade 
seemed complete, sentiment for special trade preferences within the 
Empire, or even for something in the nature of an imperial customs 
union was not entirely dead. Evidences of it may be traced through 
the eighties and nineties, and after Joseph Chamberlain, colonial 
secretary, began his campaign for protectionist tariff reform in May, 
1903, it became a question of practical politics. The Imperialists have 
agitated for the imposition of preferential duties as a means either 
toward drawing the Empke within closer bonds or for the increasing 
of trade, or both. The elections of 1906 and 1910 showed that the 
movement had not taken great hold outside of the Conservative 
Party; but the war greatly turned sentiment in its favor. In Sep- 
tember, 1919, differential rates were put in force in the United 
Kingdom. ^^ This at least partial conversion of the British Govern- 
ment to the idea of imperial preference has already been reflected in 
recent changes in colonial tariffs. This is not to say, however, that 
before this conversion the Crovfn colonies were absolutely without 
differential tariffs. The British system is not so autocratically cen- 
tralized that all the Crown colonies at all times necessarily reflect in 
all respects the policies of the British Government. Some of the 
Crown colonies approximate the independence of the Dominions. 
It is, therefore, not surprising, especially as all the Dominions, except 
Newfoundland, had adopted preferential tariffs, that in a few of the 
Crown colonies preferential tariffs were introduced before that sys- 
tem was adopted in Great Britain. But the only colonies which had 

63 For a discussion of the movement in Great Britain and its recent measure of success, see Part II, p. 816. 



BRITISH CROWN COLONIES. 337 

adopted a substantial system of preference were certain West Indian 
colonies which had done so as a result of negotiations with Canada 
in 1912. These West Indian preferences have, therefore, been dis- 
cussed in connection with Canada (see p. 696) and only a short sum- 
mary is included here. The other differential duties of the British 
Empire, and the general situation as it exists at present is discussed 
here in the following order : The export duty on tin ore from the Fed- 
erated Malay States (which dates from 1903), the recently imposed 
export duties upon tin ore from Nigeria, the export duties on palm 
kernels from West Africa, the situation in India (export duty on un- 
tanned hides and skins, proposed preferential system, specific proposal 
relating to jute), minor and doubtful kinds of preferences, the new 
differential system in Cyprus, and finally the general measures for the 
regulation of the dye trade. The section then concludes with a sum- 
mary of the preferential tariffs of the West Indies, and with a general 
comparison and estimate of the situation and tendency in the Crown 
colonies and India. 

EXPORT DUTY ON TIN ORE FROM THE FEDERATED MALAY STATES. 

The differential export duty on tin ore from the Federated Malay 
States was established in 1903 at a time when these States were 
supplying 60 per cent of the world's tin. The export duties on tin 
and tin ore provided a large part of the revenues of those States. 
The differential duty was an addition to the existing duties and was 
wholly a preventive measure; no changes in trade currents were 
produced by it, but it was instrumental in preventing the develop- 
ment of smelting in the United States. 

RATE OF DUTY. 

It is not necessary to go into the details of the export duties on 
tin in the Federated Malay States. It is sufficient to observe that 
in Pahang it was 10 per cent and in the other three States it came 
to approximately the same rate though varying on a sliding scale 
according to the prices and also differing with the kind of tin (reef 
or alluvial) and the place of origin. The duty on the ore was in 
Pahang 65 per cent of the duty on tin, and in the other States 68 per 
cent, but these rates were increased in 1904 to 70 per cent and have 
recently been raised to 72 per cent and then to 73 per cent of the 
duty on tin.^^ The differential feature of the duty imposed in 1903 
was an additional rate of 30 British or Mexican dollars ^^ per pikul 
on all ore exported without such guarantees as the Resident might 
prescribe that it would be smelted in the colony of the Straits Settle- 

54 The ore. as prepared for exportation contains about 74 per cent of tin and the reckoning of the duty 
on a percentage of the gross weight smaller than 74 per cent made it to that extent more profitable to 
export the ore than the refined tin. As a result of this, while in 1904, 323,000 pikuls (pikul= 133| pounds) 
of smelted tin had been exported out of a total of 869,000 pikuls, in 1914 the amount of smelted tin exported 
was only 61,000 pikuls as against 763,000 pikuls or ore. (Report for 1914 on the Federated Malay States, 
by the Resident General, p. 9. Gt. Brit. Pari. Papers, 1914, Cd. 8155.) The deciinein the smelting industry 
in the Federated States has been ascribed also to the defects of the small scale native methods as compared 
to the efficiency of the world's greatest smelters in Penang and Singapore. (The Mineral Industry during 
1904 J). 395.) 

5» The value of the dollar current in the Straits Settlements in 1903 was variable. The American consul 
reported the duty as equal to S11.50. Since that time the unit of value, now known as the Straits dollar, 
has been stabilized at 2 shillings 4 pence so that the tax is now equal to $17.03. The Straits pikul is 133 1 
pounds and the duty is therefore $13.53 per hundred pounds. 



338 COLONIAL TAEIFF POLICIES. . 

ments.^^ To the list of places where the smelting might take place 
without the payment of additional duty the United Kingdom was 
added in 1904 and Australia in 1916/^^ As the price of tin was in 
1903 about 60 British dollars per pikul and has seldom been above 
100 Straits dollars, and as the tin ore runs nearly three-fourths tin, 
it is easily seen that this differential duty is equivalent to an ad 
valorem duty of from 40 per cent upward, i. e., it is prohibitive. ° 

REASON FOR IMPOSING THE DUTY AND ITS EFFECTS. 

In spite of the fact that the imposition of this differential duty 
coincides with the opening of Joseph Chamberlain's campaign for 
preferential duties within the British Empire, it escaped discussion 
in contemporary literature. The official report for 1903 of the 
Resident General of the Federated Malay States merely says: 'Mn 
American syndicate which has erected large smelting works in the 
United States has been making inquiries mth a view to purchasing 
tin ore in these States for exportation to their works. Their pro- 
posals, not meeting 'with encouragement from Government, have, 
I understand, been abandoned for the present." -^^ In a book pub- 
lished four years later Sir Frank Swettenham, who was the resident 
general at the time when the duty was imposed, disdains such a 
euphemism. ''An American attempt to transfer this tin smelting to 
American soil and so obtain, in time, complete control of Malay tin 
production was frustrated by imposing a prohibitive duty on the 
exportation of tin ore and giving an equivalent rebate on all ore 
smelted in the Straits colony." ^^ 

Perhaps the correspondent of The Times represented accurately 
the official view.^^ He argues that the American syndicate would 
obtain protection for the smelting industr}^ in the United States by 
having a duty imposed on tin, and the result would be that the 
smelting industry in the Straits would be destroyed. The Americans 
would be the only purchasers of tin ore in Malaya, they would reduce 
the price offered and not only the producers but the Government 
revenue would suffer. He emphasizes the allegation that these 
Americans were attempting to monopolize the source of supply, and 
calls the imposition of the duty an act of self preservation and one 
of dire necessity on the part of the miners, the trading community, 
and the Government. He declares that an act of such importance 
must have been authorized by the secretary of state for the colonies. 

66 The duty was imposed in each State by the Resident with the approval of the Resident General and, 
as is seen from the Government gazettes, went into effect from June 1, 1903. The unanimous action of 
the four Residents suggests that the Resident General, who was also governor of the Straits Settlements 
and therefore presumably as much interested in the smelting business as in the mining industry, initiated 
rather than approved the duty. 

a In 1920 the" price of coal rose to a point at which it was cheaper to export ore for smelting elsewhere, 
but figures showing the destination of the ore are not available. 

"•>'• The figures do not show whether the addition of these places was of any practical importance. As 
the Straits Settlements import tin ore from many parts of the world and as all the exports of the Federated 
Malay States go tlnrough the Straits Settlements, there is no way of showing from the figures the destination 
of the exports of the Federated Malay States. 

58 W. H. Treacher wrore the report, which is dated Apr. 14, 1904. The quotation is from p. 6. 

69 British Malava, 1907, p. 333. 

60 The Times (London), July 9, 1903. The article is prefixed by no date or place and is phrased not so 
much as news as something which had been in force for some time but had been overlooked. An account 
from the Pall Mall Gazettels quoted in the United States Consular Reports, Dec. 1903, p. 772. Unless the 
same man acted as correspondent for The Times and the Gazette or unless the one paper copied from the 
other the striking similarity of the argument in the two articles increases the probability that they give 
accurately the official justification for the imposition of the duty. 



BEITISH CROWN COLONIES. 339 

The Mineral Industry (an American annual review) for 1903 ^^ 
presents the other side of the picture. ''A smelting works for the 
treatment of tin ores was erected during 1903 at Bayonne, N. J., by 
the International Tin Co. The plant was designed to treat about 
50 tons per day, but was not put in operation owing to the fact that 
a prohibitory tax was placed on the export of tin ore from the Malay 
Peninsula whence it was expected to draw the supply." (Vol. for 
1903, p. 325.) The same publication refers in the two following 
years to the fact that this plant continued idle for lack of ore. It 
ma}^ be noted in this connection that the Straits Trading Co., the 
greatest smelters of Singapore, was producing at that time 100 tons 
of refined tin daily and apparently was most prosperous. There 
were also two smelters in Penang and one in Wellesley Province,*^ 
one of which had a capacity of about 600 tons of tin per month. ^^ 
The Eastern Smelting Co. was taking over the plant of the company 
last named with a capital of 1,500,000 Straits dollars, with the 
intention of increasing the capacity to 1,000 tons per month. These 
figures show that the International Tin Co. was prepared in 1903 to 
handle only part of the business and that the imposition of the export 
duty was not, in fact, necessary to prevent an American " monopoly '^ 
but was designed to preclude any competition whatever with the 
smelters of the Straits Settlements. 

The duty as imposed in 1903 discriminated against other parts 
of the Empire as well as against all foreign countries, but, as the 
different writers agree, since alP* the tin ore was smelted either in 
the Federated Malay States or in the Straits Settlements, this was 
of small importance. 

WEST AFRICAN EXPORT DUTIES. 

NIGERIAN DUTY ON THE EXPORT OF TIN ORE. 

The Nigerian Minerals Ordinance, 1916, provides that: 

the governor in council may make regulations for all or any of the purposes following: 
•«■ * ■}«■ 

(q) imposing an export duty on tin ore except when the exporter shall satisfy the 

governor that the tin ore exported will be smelted in the United Kingdom or in a 

British possession. * ^ x- 

(w) generally for the carrying into effect the purposes of this ordinance^ 

Provided, That any regulations dealing with the matters referred to in paragraphs 

(c), (e), \g), (p), and (q) shall be made subject to the approval of the secretary of 

state. 

On November 8, 1916, Mr. Bonar Law stated in the House of 
Commons that such a differential duty had been imposed but that 
it had not been put in force because of the war.^^ The American 
consul at Dakar made a report under date of December 6, 1919, on 
the duties in force in Nigeria including the royalties payable on the 
exportation of ores and valuable minerals. He gives no date in 

61 The Mineral Industry, 1903, p. 331. The later prosperity of the company is shown by the dividends 
for 1906. (The Mineral Industry, 1906, p. 731.) 

62 Colonial Statistical Tables, 1903, p. 13. 

63 The Mineral Industry, 1907, p. 869. 

6* The figures show small exports of ore from the Straits Settlements to Hongkong, Germany, and the 
United Kingdom, but this ore may have come from the Dutch East Indies or elsewhere, and these exports 
may have continued, as the duty was not extended to the Straits Settlements. In 1916 £90,000 worth of 
ore was sent from Great Britain to the Straits for smelting. (The Times Trade Supplement (London). 
March, 1918, p. 264.) 

ts ParUamentary Debates, 1916, Vol. 87, p. 586. 



340 COLOXIAL TARIFF POLICIES. 

connection with these royalties. On tin or tin ore the royalty is 
collected on a sliding scale as follows : 

When the London price per ton is : ^er cent on the value. 

Less than £130 the royaltv will be 2 

£130, but less than £135, the royalty will be 2^ 

£135, but less than £140 the royalty will be 3 

£140, but less than £145, the royalty will be 4 

£145, but less than £150, the royalty will be 4J 

£150, but less than £160, the royalty will be 5 

£160, but less than £170, the rovaltv will be 5^ 

£170, but less than £180, the royalty will be 6J 

£180 or upwards the royalty will be 7| 

In addition a differential duty is levied on all tin ore exported 
without guarantee that it will be smelted in the United Kingdom or 
in a British possession. The rate of this duty is "equal to 50 per 
cent of the maximum royalty payable in respect of tin ore as prescribed 
in the preceding regulation." Tin ore is deemed to contain 70 per 
cent of metallic tin. 

EXPORT DUTY UPON PALM KERNELS. 

Of the four British colonies in West Africa, two — Nigeria and Sierra 
Leone — depend for their prosperity largely on the exportation of 
palm kernels and palm oil. Before the war about three-fourths of 
the kernels went to Germany, and the cutting off of the market had 
a disastrous effect on the business of the colonies. Some Liverpool 
merchants and others specially interested in the trade of these regions 
exerted themselves to provide a market in Great Britain. This was 
the more easily done as glycerine, which the Government needed in 
great quantities, could be obtained from palm. oil. 

In May, 1915, the colonial secretary, Mr. Bonar Law, appointed a 
committee on edible and oil-producing nuts and seeds to report on 
the means of making this industry permanent in Great Britain. 
Mr. A. D. Steel-Maitland, undersecretary of state for the colonies, 
was chairman of the committee, and it included the governors of two 
West African colonies and three nominees of chambers of commerce. 
In June of 1916 the committee repor ted, ^^ concluding their 25 pages 
of discussion with the recommendation that a differential export duty 
of £2 per ton on palm kernels should be imposed for five years after 
the war, and if this rate were found insufficient it should be increased. 

The committee found that West Africa produced in 1912 and 1913 
about £10,000,000 worth of vegetable oil and oil-producing nuts and 
seeds and that one-half of this value was in palm kernels from Nigeria. 
Of the three major oil products, groundnuts came largely from the 
French colonies and went to France and Germany mainly; palm oil 
came largely from the British colonies and went to Great Britain; 
but of the palm kernels, five-sixths of the supply came from the Brit- 
ish colonies and three-fourths went to Germany. ^'The question is 
one between this country and Germany." (Keport of committee, 
p. 22.) The committee, therefore, confined its attention almost 
wholly to palm kernels. 

The palm peculiar to the regions of heavy rainfall in the West 
African Tropics bears clusters of fruits from whose fleshy exterior the 

6« Gt. Brit., Pari. Papers, 1916, Cd. 8247. The evidence is givenin Cd. 8248. A summary will be found in 
The Times (London), June 9, 1916, p. 7. 



.BRITISH GEOWN COLOITIES. 341 

natives extract palm oil, but whose kernel they export, and from the 
latter palm kernel oil is produced by modern machine or chemical 
processes. The oil obtained is very similar to coconut oil and com- 
petes also with other vegetable oils, such as cottonseed and linseed 
oil. It was used at first chiefly for soap making, but with better 
refining processes it is now used chiefly for making margarin and nut 
butters. The cake or meal from which the oil has been taken also 
competes with the similar by-products of the other oils mentioned and 
is used chiefly as a cattle food. About one-half of the weight comes 
out as oil, which is worth about five times as much as the cake. The 
crushing industry ®^ is of considerable importance and is well estab- 
lished in Great Britain, but the 1,500,000 tons of material annually 
treated had been chiefly cottonseed and linseed, with some rapeseed 
and castor and soya beans. Copra, groundnuts, and palm kernels 
had been negligible factors in the business as established in Great 
Britain, and the machinery in use could not be economically used for 
palm kernels, which require greater pressure than the others."^ 

The committee found that there was no reason why palm kernels 
should be treated in Germany rather than in Great Britain. The 
business had become established in Germany partly, perhaps, because 
of the early activity of a German firm which was engaged for a time 
in the crushing business as well as in trading on the West Coast of 
Africa. The use of cake for cattle feeding had developed much 
earlier and on a much larger scale in Germany than in England. An 
established trade in a double product such as that under considera- 
tion was harder to change than a trade depending upon a single 
product. The German trade had also certain advantages through 
shipping in bulk and because of smaller port charges in Hamburg. 
A large and sure market in Germany was of considerable value to 
the trade. The committee found, however, that the best British 
mills were not inferior to the German in either their mechanical or 
their chemical processes, and that various advantages which the 
Germans possessed could be duplicated in England. Encouraged 
by the agricultural experts, the farmers had been taking up 
palm kernel cake as a cattle food, and a permanent British market 
for this by-product seemed assured. The British consumption of 
margarin had been increasing rapidly and a good market for the oil 
also seemed assured. None the less the committee thought it 
^^ quite clear" that ^'ihe trade will not have become sufficiently 
rooted in this country by the end of the war to overcome sufficiently 
the competition which it will have to meet." The security of 
promised aid through a series of years was needed. Before the war, 
one-half ton of oil was worth about 10 shillings and one-half ton of 
oil was worth from 10 to 15 shillings more in Germany than in Great 
Britain ; it was felt accordingly that a differential or protective export 
duty of £2 a ton on palm kernels would be sufficient to divert the 
trade from Germany to Great Britain, but the committee recom- 
mended that the rate be not less than £2 a ton and that it be increased 
if that amount proved insufficient. This report was signed by 
11 members of the committee and only one member dissented. 
The dissenting member pointed out that British mill owners had 

67 Crushing is usually spoken of, though chemical extraction is also used, at least for palm kernel oil. 
See pp. 6-8 in the committee report. 

68 See the committee report and The Times Trade Supplement, December, 1917, p. 193. 



342 COLONIAL TAEIFF POLICIES. 

contracted for machinery for crushing palm kernels before the war, 
and had evidently believed that they could compete without pro- 
tection,^^ but based his dissent largely on the belief that an ''absolute 
new^ departure'' like this should be taken up only as part of the 
general settlement of imperial trade relations after the war. Another 
member of the committee, Mr. G. A. Moore, made the additional rec- 
ommendation that the next increase in the spirit duty in West Africa 
be made differential because a part of the hold which the Germans 
had on the trade was due to outward cargoes of trade spirits. 

The colonial secretary sent the com^mittee's report to the governors 
of the West African colonies, saying, ^'I see no reason why their 
proposals should not be adopted forthwith," but asking, in the 
interests of uniformity, that he be shown the drafts of the proposed 
legislation. The proposed duty, however, was not adopted "forth- 
with;" in fact it was not until October 20, 1919, that it was put in 
operation, and the five years for which it is to remain in force therefore 
runs from that date.'^^ In the meantime war regulations were in 
force by which all exportation to points outside of the British Empire 
required special authorization from the governor. '^^ These war 
prohibitions were canceled at least for Nigeria and Gambia on Decem- 
ber 6, 1919.^2 

A certain amount of objection to the imposition of these duties 
appeared in the long discussion in the House of Commons upon the 
question of the sale of enemy propert}^ in Nigeria. The chief argu- 
ment advanced against the motion to restrict the sale to British- 
born individuals or British corporations ^^ was that since the war 
had cut off Germ.an competition the British dealers had combined 
to depress the price paid to the natives. This objection was made 
by Mr. Steel-Maitland, representing the Government. His figures 
were disputed, and the alleged decrease of price in Nigeria in spite 
of a rise of price in Great Britain v/as attributed to the impossibility 
of marketing the supply and to the great rise in freight rates. The 
report of the committee hints at the same objection; but they dismiss 
it with the remark that they do not believe, in view of the market 
now opening in Great Britain, which can absorb the whole of a normal 

69 Thomas Wiles, M. P.. in The Times Trade Supplement, April, 1916, had referred to the palm-crushing 
industry as one that bade fair to be permanently established, in Great Britain because of the war; he made 
no reference to a prospective duty to aid the industry . 

'0 The Economist (London) of Aug. 17, 1918, p. 207, announced that Sierra Leone and the Gold Coast 
had adopted this differential duty but that it would not go into operation until after the war. The Times 
Trade Supplement of June 14, 1919, p. 331, announceditsappUcationin Nigeria, butin spite of thisannounce- 
mentand of a proclamation of Mar. 22 that it would go into force Mar. 27 it would seem from all the later 
references that the application did not begin before Oct. 20, 1919. When the duty was finally put into 
operation it was only passed by the legislative council of the GoldCoastby theuseo"f the official majority. 
Several earlier references have been found which refer to this duty as being in f orcein a 11 four of the British 
West African colonies, but no specific and authoritative information has been found of its actual enforce- 
ment in Gambia before Mar. 25, 1920. Gambia exports insignificant quantities of pahn kernels. (See 
B. T. .T., Sept. 11, 1919, and Col. Amery's reply to a question in the House of Commons, Oct. 29, 1919.) 
The duty was finally imposed by ordinance No. 4 of 1920, signed by the governor on Mar. 18, and in force 
a weeklater. 

"i This restriction was relaxed on Apr. 24, 1919, to allow unlicensed export of oleaeinous products (except 
pahn oil) from Nigeria to France and Italy; and several months later (reported by the American consul 
Oct. 27) the restriction was similarly relaxed for the Gold Coast. 

72 In the meantime it had been announced in the Manchester Guardian (Oct. 21, 1919— a date on which 
it was believed that the imposition of the differential export dutv had been countermanded at the last 
minute) that the exportation of pahn kernels v>^ould be restricted by allowing the exportation to foreign 
coimtries of only 10 tons for every 90 tons exported to the United Kingdom. Coi. Amery, under-secretary 
for the colonies, stated that this was purelv temporary and that it and the similar restriction on the 
exportation of groundnuts and copra were imposed in the interests of the food supply. (Manchester 
Guardian, Oct. 30, 1919. One-half of the copra and one-sixth of the groundnuts might be exported to 
foreign countries.) Apparently the repeal of the war prohibitions on Dec. 6 included the repeal of this 
rationing plan . 

'3 Parliamentary Debates, Nov. 8, 1916, vol. 87, pp. 249-367. The motion was lost by a vote of 231 to 117. 



BRITISH CROWN COLONIES. 343 

crop of palm kernels, that the mterest of the native producers will 
suffer. During the debate one other argument was made against 
the imposition of the differential duty^that its effect would not be 
confined to Germany but would be felt also by France, Holland, 
and the United States. Mr. Ramsay Macdonald attacked the 
report of the committee on edible oils, saying it was a report of 
officials and merchants, seeking their own interests; the industry 
was unimportant, not a key industry, and this was crude protec- 
tion; the duty was not really an export duty at all but was like the 
remission of the duty on hemp exported from the Philippine Islands 
to the United States. 

The interest of the United States in the trade in palm kernels. — - 
Before the war the imxportations of palm kernels into the United 
States were insignificant. The published statistics do not distinguish 
the West African palm kernels from the Central American palm 
nuts. These nuts are from a different species of palm and the 
figures for 1918 show that their value per pound was only one- 
twelfth of that of the West African palm kernels. But even com- 
bining these two products, the importations in the fiscal years 
ending June 30, 1912 to 1915, in no case exceeded $8,000. In 
1915-16 the value rose to over $1,000,000; in 1916-17 the value 
was $626,000, and in no year since has it exceeded $300,000. An 
examination of the figures for 1918-19 and the first eight months of 
1920 shows that in 1918 the bulk of the imports and more than 
half the value were palm nuts from Central America and that in 
the two following years the imports from Central America practically 
ceased, while those from West Africa increased. From British West 
Africa nearly 1,500,000 pounds were imported in 1918; in 1919 
twice as much, and in 1920, 7,937,000 pounds. Quantities of palm 
kernels (as distinguished from palm nuts) have been received also 
from South Africa, the Belgian Congo, Kamerun, Liberia, and the 
Straits Settlements,-*— totaling in 1919 nearly 2,300,000 pounds, 
but in 1920 only 334,000. Except for 67,500 pounds from the 
Straits Settlements, the palm kernels imported during 1919 from 
sources other than British West Africa all arrived after the imposi- 
tion of the differential export duty in these British colonies. In 
1920 nearly 8,000,000 pounds of palm kernels were imported into 
the United States from British West Africa, while the total importa- 
tions from all other sources, and including Central American palm 
nuts, was under 400,000 pounds. (The figures for 1918-1920 are 
shown in Table 41.) The increased importation shows from one 
point of view that the differential duty of British West Africa has 
not proved a prohibitive one,"^ and from another point of view that 
other satisfactory sources have not been found from which to derive 
supplies of palm kernels, 

T* The shipment from South Africa was evidently transit trade. Plantations of West African palms 
have been established in the Straits Settlements. 

'•' The revenue collected from the differential export duty in the first 9^ months to .Tuly 31, 1920, was 
in Nigeria nearlv £22,000, and in the Gold Coast nearly £2,000. (Statement in House of Commons, Oct. 
28, 1920.) This shows that about 25,000,000 pounds were exported to foreign countries in this period. 



344 



COLOS'I.iL TASIFF POLICIES. 



Table 41. — Imports into the United States ofvalvi nuts and palm-nut liernels^ 1918-19-20. 

[Calendar years.] 



From— 


1918 


1919 


1920 

(8 mos.) 


British West Africa 

Central America 

Kameruii 


Pounds. 

1, 485, 000 

14, 841, 000 


Pounds. 

2, 889, 000 
367, 000 


Pounds. 
7, 937, 000 
58, 000 
112,000 


South Africa . . . 


1, 465, OOO 
68, 000 
821, 000 


Straits Settlements . . .... 




111,000 
111, 000 


An other 1 


579, 000 




Total - - 


16, 905, 000 


5,610,000 


8, 329, 000 





1 "All other ' ' includes, in each ease, ail countries for which no fig:ures are given in this table for the year. 
In 1918, ''All other" includes Costa Rica also, and in 1920 it includes Panama, Guatemala, and British 
Honduras. 

PROTECTION OF INDIAN INDUSTRY AGAINST THE WORLD AND AGAINST 
OTHER PORTIONS OF THE BRITISH EMPIRE. 



INDIAN OPINION IN REGARD TO PROTECTION. 

India has a very simple tariff, with as yet practically no protective 
features and with one exception without preferential arrangements 
for trade with the rest of the British Empire. A change of policy 
in either respect in so large a market is of importance and the forces 
demanding such changes call for some consideration. Attention 
will be directed first to the movement in favor of a protective tariff 
in India with the slight success already won in regard to cottons 
and secondly to the movement for a preferential tariff in favor of 
the British Empire. The proponents of this policy have also scored 
one success, the differential export duty on un tanned hides and skins. 

The public opinion of India has never been convinced of the 
advantages of free trade. It opposed the abolition of duties in the 
seventies, particularly those on cottons/® and since 1896 there has 
been a persistent demand for protection and specifically that a 
beginning be made by taking off the internal tax on cottons wliich 
until 1917 was equal to the duty upon ihQ imported article. ^^ The 
protectionists of India base their case on the infant industry argu- 

76 '-The question of cotton duties has been one of the most exciting questions that has exercised the 
pubhc mind of India for the last 50 years. It is one of the few on which the Indian and the resident Anglo- 
Indian hold exactly the same views. It affects an industry in the prosperity of which the Indian and the 
resident Anglo-Indian mill owners are equally interested." (Lajpat Rai: Op. cit., p. 150.) 

77 When the import duty was increased in 1917 with no change in the rate of the excise, the viceroy. 
Baron Chelmsford, addressed his council in a way which shows the importance with which the question 
is regarded in India. "Apd is not the imposition of an extra duty on cotton goods, thus raising the Import 
ratelto our general tariff level, an event which of itself makes this budget and this session memorable? 
A grievance has thus been removed which has been for a long time a standiiag source of irritation." 

In reolying to a deputation of cotton mamofacturers on Mar, 12, 1917, Mr. Austen Chamberlain (then 
secretary of state for India) said that no British oificial on the Indian legislative council would vote for 
an excise on cotton textiles, except on orders. "There v/as no representative of Indian native opinion 
who had not from the first regarded and did not now regard the special position hitherto accorded to cot- 
tons in the Indian market, unUke that of any other British trade, as a great and growing grievance and 
an injury to India. There was not one of them who did not deeply resent it." "There was no question 
oh which there was such complete unanimity as there was among all classes of both races, ofP.cial and 
unofficial, upon this subject. There was no question on which all India was so absolutely united/' The 
previous year the viceroy had warned them - * * "that the question was becoming one of the soli- 
darity of India and England." The minister concluded by saying that "Hi§ Majesty's Government 
can not hold out any hope whatever, and it would not be kind to keep you in uncertainty. 

The committee appointed in March, 1920, to consider the question of a preferential tariff for India con- 
clude the report thus: "TinaUy, it may be presumed to be the case that no scheme of preferential duties 
in favor of Empire products could possibly be considered which did not provide for the abolition of the 
cotton excise duties." 



BRITISH CROWN COLONIES. 345 

ment and on the ideas of Friedrich List's National Economy. They 
argue that India v/as formerly a great industrial nation; that the 
introduction of machine industries in Europe, together with steam 
navigation and the building of railways in India, ruined the indus- 
tries of India and is still forcing that country to depend more and 
more exclusively on agriculture. The}^ object to this ruralization 
on social as well as on economic grounds, and believe that protection 
for a few selected industries for a period of years would enable them 
to establish themselves on a large scale. The free traders rely on 
the orthodox arguments — the interest of the consumer in low prices, 
the economy of the division of labor with each countr}^ specializing 
in that in which it holds relatively the most advantageous position, 
the difficulty of limiting or removing duties once imposed, and the 
stimulus of free competition. This last point is emphasized by 
Lees Smith, who dwells on the natural conservatism of the Indian 
disposition and on the lack of discipline and the general inefficiency 
of Indian labor. 

The imposition in 1917 of a protective rate of 7^ per cent ad va- 
lorem on cottons, as compared with the excise of only 3^ per cent, 
was avowedly a war measure. As such, accompanied by a gift of 
£100,000,000 toward the expenses of the war, it was accepted unani- 
mously by the British House of Commons; but Baron Chelmsford 
stated that the question of the Indian cotton duties would ^^be con- 
sidered afresh when the fiscal arrangements of the various parts of 
the Empire come to be reviewed as a whole after the war.""^^ In 
the meantime the import duty on cottons has been advanced to 11 
per cent from March 1, 1921, and, in spite of a need for revenue which 
caused a general increase of tariff rates, the excise duty remains at 
3J per cent."^^ Protection to the extent of 7^ per cent ad valorem is 
thus afforded to the Indian cotton industry. The Indian Govern- 
ment, however, disclaim any protective intention, and insist that the 
Indian tariff is still ''purely a revenue-producing tariff^' and that no 
fundamental change has been made in the tariff policy. But they 
think that the whole question of India's fiscal policy should now 
receive an exhaustive examination, and their language indicates 
that this examination should be directed primarily to the question 
of free trade vs. protection, and only secondarily to that of a prefer- 
ential policy. ^^ 

78 Baron Chelmsford's address, previously; quoted. 

79 It may be noted that Lord Hardinge, in 1916, in proposing the raising of the import duty, took the 
position that the excise should remain unchanged "subject to the possibihty of its being altogether abol- 
ished when financial circumstances are favorable." 

80 After referring to other matters, the statement of the Government of India continues: 

"AVefelt, however, that, in view of the very great trade depression in England, which is far worse than 
anything which now obtains in India, it would not only be desirable but our duty to make clear to His 
Majesty's Government on behalf of India that oar proposals for increasing the import duty on cotton goods, 
among other articles subject to the general tariff, had the sole object of producing additional revenue, and 
had no ulterior motive of a protective or any other kind. Nay, we will go further and say that it would ill- 
become this countrj^, at a time when the senior partner of the Emj^ire, on whom fell by far the severest 
burden of the war, both in blood and money, is anxiously endeavoring to face the most acute problem of 
unemployment and trade distress, to requite the services which Great Britain has rendered to the rest of 
the Empire, including India, by taking the first opportunity to introduce a measure of protection against 
her manufactures. 

"We made it clear, therefore, that it is solely our financial necessities, and no nev/ departure of fiscal 
pohcy, which have obUged us to propose to the legislature this particular measure. We trust our fellow- 
subjects in the United Kingdom will appreciate this, and will acquit the Government of India and legisla- 
ture of any desire to use their newly conferred Uberty of action to injure the country which only one year 
ago conferred that liberty on them. It would indeed be manifestly impossible for this Government to 
initiate any fundamental departme in fiscal policy at the present juncture. 

"At present our tariff is purely a revenue-producing tarilT, which, whatever may be its effects here and 
there on any particular trade, is admittedly not devised with any object other than that of revenue. We 
feel confident that not only this House but also the country at large would hesitate, and very properly hesi- 
tate, to commit themselves to any fundamental departure until the whole question of India's fiscal 



346 CGLO^sriAL tariff policies. 

The movement for protection for Indian industry has httle in 
common with the movement for imperial preference except that the 
preferential movement in England, in so far as it leads to the imposi- 
tion of duties on goods from outside the Empire, strengthens the 
Indian demand for protection. Indeed, it has frequently been 
pointed out^^ that if the Government of the United Kingdom^ should 
adopt measures of protection^ — as it has now done — it would no 
longer be possible in a political sense to refuse the protectionist 
demands of India. The great services of India in the v/ar, and the 
fiscal autonomy conferred in the constitution of 1919, emphasize 
this. Finally, the increase of the Indian duty on cottons in 1921 
in the midst of a great depression in Lancashire demonstrates the 
inability of England's greatest exporting industry to withstand the 
protectionist influences surrounding the Government of India. ^^ 

It remains to be seen, however, whether the cotton and certain 
other interests in England can prevail in obtaining from India some 
general scheme of imperial preference by which British goods will 
pay less than the full duty laid upon others or whether India will 
maintain as great an amount of protection against British manufac- 
tures as against others. As already seen, the British have so large 
a proportion of the trade that the people of India feel that protection 
is needed first of ail against Great Britain. On the other hand, in 
the cotton trade it is the competition of the United States and Japan 
which is most felt because these countries make the cheaper qualities 
which compete most directly with the cottons turned out by the 
Indian mills. This competition is felt not only in India but in 
China also, to which India has exported considerable quantities of 
cotton goods. 

The present attitude of the Government of India toward a prefer- 
ential tariff is expressed in the following quotations. They have 
appointed a commission '^ to examine, with reference to all the inter- 
ests concerned, the tariff policy of the Government of India, includ- 
ing the question of the desirability of adopting the principle of 
im.perial preference, and to make recommendations"; and in con- 
nection with a question raised in the House of Commons, it was 
announced through the India office that: 

The Government of India desires to take advantage of the honorable member's 
reference to the question of imperial preference to make their own attitude in regard 

policy has been thoroughly and exhaustively examined by a competent and impartial body. We feel, 
however, that the time has now come when that examination should be begun. We feel, further, that the 
examination should not be confined to India's own fiscal needs, but should embrace an inquiry into the 
steps which India can take in order to recognize her fiscal obUgations to the other members of the Empire 
of wlxLch she is a part. We have been in correspondence with the secretary of state for India, and an an- 
nouncement on the subject has been made this mornmg." (The Manchester Guardian, Mar. 3, 1921, p. 8.) 

81 E. g., by Lord Crewe, secretary of state for India, in 1912. The Economist, Dec. 7, 1912, vol. 75, p. 1167. 
Compare the papers laid before the colonial conference, 1907. Memorandiun on Preferential Tariffs in Their 
Apphcation to India, p. 456. Gt. Brit., Pari. Papers, Cd. 3524, 1907. 

82 The Council of the Manchester Association of Importers and Exporters appealed to the British Gov- 
ernment against the Indian cotton duty of 1921 on the ground "that in their opinion the increase in the 
ad valorem rate of duty on British cotton goods will have a disastrous effect on the industry of Lancashire, 
one of the principal mainstays of British trade, while at the same time it must bear heavily upon the teem- 
ing population of India who are large consumers of cotton fabrics and can ill afford to bear the smallest 
increase in the cost of their clothing. * * * 

"The council woiHd suggest, seemg the revenues call for such drastic action and hea\'y taxation, that 
this is a clear case where the excise duty on Indian manufactured cottons should be raised to the same level 
as that of the British productions, which woidd have the effect of more readily reaching the desued object 
of obtaining the revenue sought for it. * * * 

"This is a time, even more than any other, when the legislative enactments of all parts of the Empire 
should be m.ade with a view to coor(i.nating the interests of the whole and to endeavor to make them as far 
as possible to serve the interests of the local governments, and at the same time those of the other parts of 
the Empire. It is believed that it is equally to the interests of the agricultural and industrial peoples of 
India and the operatives of Lancashire that cotton fabrics should percolate through India at the lowest 
cost. It is also believed that the prosperous position of the Indian cotton mills does not call for any differ- 
ential duty in their favor at the exi^ense of the Indian consumer." 



BRITISH CROWN COLONIES. 347 

to this subject clear. In the event of some scheme of imperial preference being found 
consistent Avith India's interests, the Government of India hope that India wilJ not 
stand aloof from such a scheme, so that India's solicitude for the solidarity of the 
Empii-e may be established. But they propose to take no decision until the question 
has been examined by the commission. If, on the report of that commission, the 
principle is accepted, the principle can be given effect to only by legislation, and it 
Adll be for this assembly to decide whether that legislation should be passed or not.^^ 

Mr. Montagu, the secretary of state for India, anticipates that the 
commission will ref)ort in favor of a protective tariff, because he 
thinks 'Hhat India is nearly wholly in favor of protection," and he 
has ^^ never met any Indian, with the rarest possible exceptions, 
who believes in any doctrine but protection." ^* 

OPINION IN REGARD TO A DIFFERENTIAL TARIFF. 

The introduction of preferential features into the Indian tariff 
system has been under discussion ever since Mr. Joseph Chamberlain 
made imperial preference a political issue. The results of two 
official investigations into this subject made in 1903 and 1920 may 
be summarized briefly .^^ The earlier, representing the opinions of 
Lord Curzon's Government in India, was distinctly adverse; the 
recent report was noncommittal, with no positive recommendation 
except that another committee should be appointed to consider the 
matter more in detail. The adverse view expressed in 1903 was 
based on three grounds: That imperial preference would cause diffi- 
culties in India's finances; that it would be of no considerable advan- 
tage either to India or to Great Britain; and that it would involve 
danger of retaliation. The report made in 1920 is based on the 
earlier report whose conclusions are criticized and modified as follows : 

The Government of India in 1903 attached great weight to the 
danger of retaliation by foreign countries. They even said that a 
tariff war might prove disastrous to India's financial system. They 
looked upon this as a serious risk, not because the danger appeared 
imminent, but because of the magnitude of the disaster which they 
conceived as a possibility o^^ The committee of 1920 ^'are unani- 
mously of the opinion that in view of the demand for our raw mater- 
ials, there is no danger to be feared on this score, and that the appre- 
hensions of Lord Curzon's Government in respect of this particular 
aspect of the question would in present circumstances be unreal." 
The committee of 1903 assumed that the method by which prefer- 
ential duties would be introduced would be the reduction of the rate 
upon British goods rather than the increase of the rates upon foreign 
goods, and as two- thirds of the imports were from Great Britain, this 
would entail serious loss to the Indian treasury. To the committee 
of 1920 it seemed ''probable that if we are to secure from our customs 
duties the financial resources which we require, the adoption of a 
system of imperial preference would entail the raising of the present 
import duties against foreign nations. This would presumably re- 
sult in raising to some extent the prices of imported commodities to 

83 The Manchester Guardian, Mar. 4, 1921, p. 12. 

84 Manchester Guardian, Mar. 28, 1921. In replying to a deputation of Lancashire cotton manufacturers 
?fr. Montagu defended the imposition of the duty on cottons as being a revenue measure and pointed out 
that a motion of Bombay mill owners (nonofficial European members) to make the general ad valorem 
rate 12| per cent had been rejected by the assembly on the ground that 11 per cent would produce the nec- 
essary revenue. For the terms of reference and tlie names of the Indian fiscal commission, see The Times 
(London), Oct. 4 and 14, 1921. 

^^ See also the memorandum laid before the colonial conference, 1907, cited above. 

88 They did, however, quote opinions to the effect that sine© India exports chietly raw materials, foreign 
countries could retaliate only by handicapping their own manufactures. 

185766°— 22 23 



348 COLONIAL TARIFF POLICIES. 

the consumer in India, and from this aspect would be likely to be 
injurious," 

In the third place the committee of 1903 opposed the introduction 
of imperial preference into India on the ground that little would be 
gained either by Great Britain or by India. In many fields the 
English had practically a monopoly of the trade and in some they 
could not compete at all, so that a relatively small part of the trade 
would receive any advantage from a preferential duty.^^ On the 
other hand, India would receive little advantage from differential 
duties in the United Kingdom, because she already had a monopoly 
of the jute and lac markets and. with Ceylon, of the tea market; and 
on foodstuffs, such as wheat and rice, no differential rate of any great 
amount could be expected and other parts of the Empire w^ould share 
in the advantage at least as to wheat. The committee of 1920 found 
that there had been in the years intervening little change in respect 
to this argument, though what change there had been was all in the 
direction of making the introduction of a preferential system in India 
of greater advantage to Great Britain. The committee concluded 
that ^Hhough India may have little to gain from a scheme of imperial 
preference she is not likely to lose more than she gains" and 'Hhat a 
favorable rate of duty would be of no sm.all advantage to the United 
Kingdom, in so far as the Indian import trade is concerned, admits 
of no question. While it is still true that the large portion of our im- 
port trade from the United Kingdom is, in present circumstances, 
comparatively secure from foreign com.petition, a portion, which may 
b€ reckoned at PxOt less than 15 millions sterling and which has a dis- 
tinct tendency to increase, remains in which competition is effective." 

Further details upon the questions of retaliation and of the benefit 
to be derived by the British Empire from imperial preferences in 
India may be taken from the committee's report and from the minute 
accompanying it. 

The committee do not fear retaliation because: 

there is every reason to suppose that the conclusion of peace initiates a period of keen 
competitioTi for the world's raw materials. * * * In respect of man7f of these 
materials, the position of the British Empire, and more particularly of India, appears 
to be one of great sti'ength. India holds a practical monopoly of jute and lac, a 
modified monopoly with respect to teak, mica, myrobalans. short-stapled cotton, and 
certain weights of liides, while in the case of oilseeds and rice, it is highly improbable 
that foreign nations would be able to dispense with or even materially reduce their 
demands on this coimtry.^^ 

The value of these materials for which the world is dependent in 
greater or less degree upon India is indicated in Table 42, but in 
reading these official figures it should be remembered that through 
1919 rupees were officiallv converted into pounds sterling at 15 

Es. = £l.«^ 

8' The tariff commission (British, 1908) estimated on the basis of the trade of 1906-7 that English trade to 
the extent of ,£10,000,000 annually might receive some benefit from a preferential duty in India. Tariff 
Com., London, M M 38, The Trade Reiations of India with the TJ. K., Br. Poss., and Foreign Coimtries, 
pt. 1. 

88 The committee continue: "If this view is correct, and our export trade is not likely to be seriously 
prejudiced, the danger of disturbing our favorable balance of trade and the risk to the" stability of om* 
currency policy, on which Lord Curzon's Government rightly laid grear stress, need not give cause lor 
serious anxiety. In this statement it is assumed that any nreference to be given in India to Empire prod- 
ucts shall in general be to a m.oderate extent. The view" lias not infrequently been expressed thafGne of 
the reasons why the world-wide extension of our Empire has hitherto received the acquiescence and even 
the good will of the majority of foreign nations has been cur adoption and maintenance of a policy of free 
trade. If the preference accorded were excessive, this good will would disappear, vrhile, on the other hand, 
a moderate degree of preference to Empire products should not be regarded by foreign nations as more 
than a matter of domestic concern." • " 

09 See note on p. 331. 



BRITISH CROWN COLONIES. 



349 



Table 42.— Value of -the materials for ivhich the vjorld depends upon India} 
[In thousands of pounds sterling.] 





Total exports' from India. 


Exports to countries outside 
the British Empire. 


Article. 


Average, 
1909-10 

to 
1913-14. 


1917-18 


191^19 


Average, 
190'^10 

tc 
1913-14. 


1917-18 


1918-19 


Cotton, raw . ... 


22, 186 
17,110 
4, 381 
14, 802 
13, 499 


28,438 

13, 774 

2,057 

4,303 

28, 562 

2,519 

575 


20,656 

15,310 

1,743 

8,480 

35, 102 

1,966 

599 


20,775 

9, 425 

4, 153 

8,814 

9,933 

1, 076 

98 

279 

1,633 

75 

1,480 

118 


24, 267 
4,018 
1,178 
3,181 

18,797 
2,012 


19, 040 


Rice 


6,814 


Hides, raw 


733 




3,984 

23,978 

1, 359 




Lac 

Mica.. 


1,468 
239 


Mowra seed 1 284 






Til (sesame) 


1,654 


230 

52 

11,782 

208 


47 

11 

11, 851 

399 


94 

26 

1,582 

70 


21 


Sandalwood 


92 

8,712 
518 


4 


Tea 


1,506 


Teakwood 


15 






Total 


84,945 


92,500 


96, 164 


57. 859 


55,225 


57. 454 



I 



i The selection of articles and the first column of figures are taken from the minute attached to the 
report, to which the other figures have been added from the Annual Statement of the Sea-borne Trade of 
India. 

In regard to the possibility of retaliation by the United States the 
committee's opinion is as follows: 

• Our chief exports to the United States of America are ^° jute manufactures 
£5,227,000; raw skins £1,866,000; raw jute £1,553,000; lac £625,000; raw hides 
£459,000; linseed £329,000. The jute position is secure, and the importance of our 
raw skins for the American boot and shoe industry renders it extremely improbable 
that America would take any action which would restrict our exports. The same 
remark applies, though with less force, to raw hides, while in lac we possess a not un- 
important monopoly. ^ The position of linseed is less secure. We could, if necessary, 
retaliate against American opposition by increased duties on mineral oils and on their 
rapidly extending trade in motor cars, though in the case of oil the interests of the 
Standard Oil Co. in other parts of the world are so great that the loss of this market 
would not seriously affect them. Altogether it seems extremely improbable that the 
United States would introduce a tariff specially directed against Indian exports, and 
it seems probable that they could not do us much harm if they did. 

The minute attached to the committee's report discusses in like 
manner the trade relations of India with each of the leading countries 
and then discusses the state of the trade of each commodity of im- 
portance among India's exports. The committee conclude: 

that while there is a possibility of some loss to our export trade in coconut products 
(copra and coir), linseed and possibly also in sesamum (til) seed and hemp from 
retaliatory action on the part of foreign countries, there is at least as great a gain to be 
anticipated from favorable treatment accorded by the Empire to some of our products, 
such as tanned hides and vegetable oils. The probable balance of advantage does 
not seem to be adverse to India. 

The minute submitted by the committee concludes as follows: 

The foregoing examination seems to suggest that a scheme of Imperial preference 
would result in some gain to the Indian export trade in rubber, coffee, tanned hides, 
vegetable oils, tea, and, temporarily at any rate, indigo, and possibly also in cotton 
manufactures and tobacco, while some loss from retaliatory action on the part of 
foreign countries is possible in coconut products, manganese, linseed and perhaps 
also in sesame (til), myrobalans and hemp. On the whole, it seems probable that 
the gain will be at least as great as the loss. 

'0 The committee uses the average figures for the quinquennium before the war. 



350 



COLONIAL TARIFF POLICIES. 



As far as the interests of the ITnited Kingdom and the rest of the Empire are con- 
cerned, it seems ob\ious that the position stated in the despatch of 1903 to the effect 
that a preferential tariff system in India might be of appreciable advantage to the 
United Kingdom still holds good. The aggregate value of our imports from the United 
Kingdom amounts to £61,000,000 sterling. By far the most important of these im- 
ports are, of course, cotton manufactures in which Lancashire holds the commanding 
position. In certain lines of this trade, however, the competition of foreign coimtries, 
particularly of Japan, has recently become of importance. Japanese producers work 
at a very small margin of profit and are year by year spinning more of the finer counts. 
A preferential tariff in favor of the United Kingdom would render the latter's position 
more secure. In addition to cotton manufactures, the L^nited Kingdom would have 
something to gain by a preferential tariff in India in respect of the following articles, 
the ligures being those for the quinquennium ending 1913-14 [see Table 43]: 

Table 43. — Trade in v:hich imperial preference would give an advantage to Great 

Britain} 

[In thousands of pounds sterling.] 



Article. 



Average imports, 

1909-10 

to 1913-14. 



From 
the 
United 
lOng- 
dom. 



i^rom 
foreign 
coun- 
tries. 



Imports, 1917-18. 



From 
the 
United 
King- 
dom. 



From 
foreign 
coun- 
tries. 



Imports, 1918-19. 



From 
the 
United 
King- 
dom. 



From 
foreign 
coun- 
tries. 



Chemicals 

Clocks and watches, and parts thereof. 

Drugs and medicines ' 

Dyeing and tanning materials 

Glass and glassware 

Hardware and cutlery 

Liquors 

Machinery and mill work 

Metals, copper 

Iron or steel 

Motor ears, cycles and parts thereof — 

Paper and pasteboard 

Provisions 

Silk manufactures 

Stationery (excluding paper) 

Toys, etc 

Urabrellas, etc 

Wool manufactures 



464 

19 

360 

46 

149 

1,336 

862 

3,298 

1,116 

4,641 

3 496 

490 

909 

127 

276 

112 

165 

1,235 



2 136 

129 

260 

2 785 

2 924 

2 916 

479 

2 362 

2 931 

2 1,293 

2 168 

2 354 

855 

1,567 

2 107 

2 151 

2 108 

2 817 



1,220 

4 

354 

391 

198 

749 

1,077 

2,066 

33 

1,947 

104 

413 

288 

88 

260 

63 

94 

1,227 



578 
98 
462 
425 
873 

1,016 
534 
854 
379 

2.352 
375 

1,109 
463 

1,594 
166 
108 
59 
117 



Total. 



I 16, 101 



10, 342 



10,576 i 11,562 



1,051 

20 

398 

367 

206 

767 

1,322 

2,139 

79 

2,564 

78 

358 

221 

73 

311 

55 

47 

1,183 



535 
124 
483 
577 
615 

1,329 
810 

1,164 
312 

3,447 
177 

1,424 
472 

2,070 

151 

174 

65 

251 



11,239 



14, 180 



1 The table and the next two footnotes are taken from the minutes of the committee, to which figures 
for 1917-18 and 1918-19 have been added. 

2 In the case of those articles against which a {}) has been placed, the chief foreign importer is an enemy 
country. 

3 Since the war the trade in motor cars has been diverted to America, the value of cars imported from 
America and the United Kingdom respectively in 1916-17 being £815,000 and £163,000. But see note on 
p. 332 for the inclusion of Canadian with American cars in the Indian statistics. 

x\s far as the Dominions and colonies are concerned, the position is materially the 
same as it was when Sir Edward Law wrote. ^^ They have not very much to gain 
from a preferential tariff in India except in the case of Mauritius, which will benefit 
BO far as her sugar is concerned. 

Indian writers seem to be almost as unanimous in opposing the 
granting of preference to other British territories as in favoring 
protection of Indian industry against all outsiders. ^^ 



81 1, e., the report of 1903. . y >, 

92 For an exception see Jadunath Sarkar, Economics of British India, 1913. V. G. Kale mentions 'oitQ 
member of the representative council who advocated preference, but his only object in so doing was that 
it should be vised in securing the introduction of protection. Indian Economics, p. 225. 



BEITISH CEOWN COLONIES. 351 

PROPOSED DIFFERENTIAL EXPORT DUTY ON JUTE. 

No general plans for differential import duties appear to have 
been worked out and presented for public discussion; nor have any 
such duties been imposed as yet. Differential export duties were 
not discussed in the reports mentioned, but export duties which are 
both protective and preferential have been imposed upon untanned 
hides and skins, and a proposal for. a similar duty on raw jute has 
been put forward ofRciallyo 

Jute is an article of great importance, since it is the commercial 
wrapper of the world. It is used chiefly as bags, sacks, burlap and 
'^cotton bagging"; in addition, enormous quantities are used as 
backing for linoleums and carpets, and in cordage and twines. 
Jute is grown exclusively in India and more than half of it is manu- 
factured there, but there are important factories in the United 
Kingdom, chiefly in Dundee. These latter had, formerly, a mo- 
nopoly so far as Europe was concerned, but protective tariffs have 
built up the industry on the continent, usually by the imposition of 
a duty iirst on the bags and sacks and then on the cloth. For many 
years the manufacture in the United Kingdom has remained prac- 
tically stationary, and the continental countries have begun to cut 
into the export trade. 

The departmental committee appointed by the Board of Trade to 
consider the position of the textile trades after the war recommended 
in 1918: 

That the attention of the Indian Government be called to the opportunity offered 
by India's monopoly in the production of jute to safeguard for the British Empire 
and its Allies the supplies of the fiber. To this end we recommend the imposition 
of an export duty (£5 per ton has been suggested by expert witnesses) on shipments 
of raw jute from India to all destinations with a total rebate of the duty in favor of 
the British Empire, total or graduated rebates in favor of its Allies, and graduated 
rebates in favor of such neutral countries as may offer reciprocal concessions. 

The committee reported that the representatives of the jute trade 
were unanimously in favor of the imposition of this duty of £5 a 
ton ($24.33) and they justif}^ it by pointing out the completeness 
of the Indian monopoly. Though the j)rice of jute has varied from 
£12 to £36 per ton in recent years, the high price has neither checked 
consumption nor brought forth any substitute fiber. The duty, 
therefore, would have to be paid by the foreigner if he did not buy 
from the British manufacturers. In other words, they present this 
as a clear example of the situation in which, it is agreed by all econo- 
mists when a country has an absolute monopoly of a certain product 
and the product is both a necessity and v/ithout a competing substi- 
tute, the whole or practically the whole of any reasonable export 
duty on that product must be paid by the foreign purchaser. 

The Bengal Chamber of Commerce, however, supported by the 
Indian Jute Mills Association, the Calcutta Baled Jute Association, 
the Baled Jute Shippers' Association, the Jute Fabrics Shippers' 
Association, the European Jute Dealers' Association, and the Jute 
Fabrics Brokers' Association, disapproves of the proposed export 
duty. They feel that conditions may arise endangering their monop- 
oly. The cost of labor in India is rising, and several materials are 
being experimented with which may eventually compete with jute. 
Substitutes are bound to appear if the rise in price be sufficiently 



352 COLONIAL TARIFF POLICIES. 

great. In particular these Indian interests object to the proposal 
on the ground that it would grant freedom from duty, partial or 
entire, to countries, including British possessions, which impose 
import duties on manufactured jute. 

There should be no question of giving something for nothing. The export duty 
on raw jute ought not to be a merely arbitrary imposition. On the contrary, it should 
be levied in respect of each country on a scale in direct relation to the import duties 
levied by that country on jute goods. The greatest advantage attaching to such a 
duty would be that, if skillfully used, if would enable India to force down the dutiea 
levied by importing countries on British-made goods; and there is no reason why the 
jute industry should forego this advantage. 

After mentioning some of the difficulties encountered in collect- 
ing different rates of duty on exports to different countries and 
stating that they are not insuperable, the statement of the Bengal 
Chamber of Commerce suggests that the existing duties on jute may 
be modified for purposes of retaliation against the imposition of 
foreign import duties upon jute manufactures, ''keeping in view the 
desirability of reducing to the lowest possible limit those [foreign 
import duties] on jute goods, and at the same time increasing those 
[British Empire export duties] on raw jute, to the extent necessary 
to protect the manufactures and interests of the Empire." 

THE DIFFERENTIAL EXPORT DUTY ON HIDES AND SKINS. 

Effects of the war on tJie Indian tanning industry. — Tanning is an 
ancient industry in India, but in recent times most of the hides and 
skins have been exported untanned or only half tanned, and India 
has imported large quantities of finished leather and leather goods. 
The war produced great changes. The trade in hides and skins was 
subject to strict control, and from August 1916 the British war 
office requisitioned all hides and every effort was made to develop 
the tanning industr}^ in India. These efforts met with considerable 
success, but hides must be distinguished from skins in this connection. 
Though the tanning of both was stimulated in the earlier part of 
the war, the demand for the heavier grades of leather was so much 
the greater that after April 28, 1917, the tanning of skins in India 
was prohibited entirely and the plants and employees were as much 
as possible converted and diverted to the tanning of hides. As a 
result of this measure the end of the war found India producing 
several times as much of the heavier leathers as ever before, but the 
industry of tanning skins had been completely disorganized. 

TJie differential- export duty. — On August 27, 1919, an embargo 
was imposed upon the exportation of hides and skins to points out- 
side of the British Empire, except as licensed. There was some 
criticism of this measure and it was practically withdrawn after a 
week's operation. ^^ 

On September 11, 1919, a plan which had received some considera- 
tion for several weeks was suddenly presented in the Indian legisla- 
tive council in the form of a bill. At the same time it was proclaimed 
provisionally in force under the act for the provisional collection of 
taxes, so as to avoid loss of revenue through large transactions in 
anticipation of its application. This bill was presented by' Sir 
George Barnes, commerce and industry member of the viceroy's 

93 It still applied to Scandinavian countries and the countries lately at war with the British Empire. 



BRITISH CEOWN COLONIES. 353 

legislative council — that is, it was a Government bill. It proposed 
an export duty of 15 per cent on untanned hides and skins, with a 
rebate of two-thirds of this amount on exports to be tanned within 
the British Empire. In introducing this measure Sir George Barnes 
spoke in part as follows: 

It is common knowledge to all honorable members that before the war the hide 
trade was monopolized by the Germans, and at that time the tanning trade in India 
was comparatively very small. Great changes were brought about by the war. Im- 
mense quantities of leather were required for war purposes for soldiers' boots, for 
saddlery and for equipment of various Kinds, and sufficient tanneries for converting 
hides into leather were not available outside Germany. The result was that tanneries 
for this purpose sprang into existence in India under the guidance, and with the 
friendly assistance, of the Indian munitions board. In this wa^r India rendered an 
immense service to Great Britain and her allies in the war, and incidentally greatly 
benefited herself. While the tanning of hides in India was fostered and stimulated 
by war requirements, the tanning of skins was injured, for it was found necessary to 
divert the energies of the skin tanners to the tanning of hides for miUtary requirements. 
In fact during a part of the war it was unfortunately necessary to prohibit absolutely 
the tanning of skins. The present position is_ that we have in India at the present 
time some hundreds of tanneries for the tanning of hides, a large number of which 
have come into existence in order to satisfy military requirements during the war. 

We have, in fact, the foundation of a flourishing tanning industry, but there is reason 
to fear that it may tend to dwindle and disappear with the diminution of miUtary 
req uirements if some other support is not given. We want to keep this industry alive, 
and we believe that in this case protection in the shape of a 15 per cent export duty 
ia justifiable and ought to be effective. It is clearly just also that the same measure 
of protection should be extended to the tanners of skins, whose business, as I have 
already stated, was injured by the necessities of the v/ar. Though Indian tanneries 
have enormously increased in number during the past three years, they can only deal 
with a comparatively small proportion of the raw hides and skins which India pro- 
duces, and it is to the advantage of India and the security of the Empire generally 
that the large surplus should so far as possible be tanned within the Empire. With 
this end in view the bill proposes a 10 per cent rebate in respect of hides and skins 
exported to any place within the Empire. I should add that it is proposed to limit 
by notification the benefit of this rebate to hides and skins actually tanned within 
the Empire, and Indian hides and skins reexported from the Empire for the purpose 
of being tanned abroad will not be entitled to any rebate. I need not tell you, sir, 
that the effect of the bill on the producers of raw hides and skins has been most care- 
fully examined by our expert advisers. We have no desire to benefit Indian tanners 
at the expense of Indian cattle owners or dealers in hides and skins. We are advised 
that the world demand for Indian hides and skins is so great that there is no risk of 
any injury being done. We have no cause to be afraid of the competition of the raw 
hides and skins from other countries in the world's leather market. India has almost 
a monopoly in respect of skins and produces such a very large proportion of the lighter 
types of hides, which are by far the most suitable for certain purposes, that the world 
will never be able to do without Indian hides in one form or another. 

It will be observed that the duty was justified by different reasons 
for hides and for skins. For hides the reasons were that hide tanning 
requires special protection because the industry made its great 
advance under abnormal conditions, because it supplies military 
needs, and because Germany is the country whose competition is 
feared and which, if previous conditions are allowed to return, will 
control the market. In the early eighties Germany and Austria- 
Hungary had taken only 4.7 per cent of the raw hides of India, but 
this percentage had grown until in the five years preceding the war 
the figure was 56.6 per cent. Special shipping facilities direct to 
Hamburg and Bremen had been provided and a combination of seven 
large firms (German or with strong German connections) controlled 
the trade.''* 

9* The Times Trade Supplement, Aug. 23, 1919, p. 601. 



354 COLOXIAL TABIFF POLICIES. 

The bill did not receive the support of the exporters of hides and 
skins and the opinion was expressed that it would seriously damage 
the producers, but on September 17 it was passed by the legislative 
council with only one dissenting voice. Amendments to make the 
rate 20 per cent, to omit the preference to the Dominions, and to omit 
the preference for any Dominions which discriminated against India 
were defeated. °^ 

Rate and differential. — The act which went into force on September 
11, li)19, levied an export duty of 15 per cent ad valorem on all raw 
hides and skins exported from India, except those V\'hich went in 
fulfillment of contracts made previously. The preferential feature 
of the act was its provision for a rebate of 10 per cent ad valorem — 
two-thirds of the duty imposed — upon all exports to any part of the 
British Empire for which bonds were given that within six months 
the goods would be delivered for tanning to a tannery within the 
Empire. The ad valorem duty was converted to specific rates by 
means of official valuations as is usual in the application of the Indian 
tariff. These valuations are subject to change by executive action 
and have been changed several times since their announcement in 
September, 1919. Under this system the rates actually levied may, 
of course, be greater or less than the 15 per cent ad valorem. The 
valuation first assigned was said to result in a rate equivalent to 
only 8 per cent ad valorem on prime light hides. On arsenicated 
cow and buffalo hides the rates are not thfe same in India and Burma. 

Effects of the differential export duty. — The short period and the un- 
settled conditions since this preferential duty went into operation 
prevent any statistical conclusions as to the extent to which it has 
affected trade, but it is evident that its effect can not be other than 
detrimental to the interests of the United States. Some points may 
be noted under three headings, the incidence of the duty, protection 
to the Indian tanning industry, and the preferential feature and the 
interests of the United States. 

TJie incidence of tlie duty, — Under ordinary circumstances export 
duties fall on the producer. Sir George Barnes in proposing the 
export duty on hides and skins told the legislative council that India 
had practically a monopoly on the lighter hides and on skins and that 
it was expected that the duty would be borne by the consumer. 
Three comments may be made on this: (1) India furnishes only 
about one-third of the world's supply of goatskins (in which the 
United States is chiefly interested) and has therefore oni}^ a very 
partial ^'monopoly." (2) The belief that the duty would be borne 
by the consumer was not shared by local producers and exporters 
who strongly opposed the duty.^^ (3) Such a duty can be shifted to 
the consmner only where the monopoly is sufficiently complete to 
force an increase in the level of prices for the whole world's supply 
and only to the extent of such price increase. This increase of 
price constitutes for the producers, or potential producers, in all 
other countries a premium as compared to former prices and so tends 
to stimulate production in other countries and therefore to break 
down the monopoly. A Calcutta paper. Capital (Oct. 31, 1919),^^ 

9' Manchester Guardian, Sept. 22, 1919. ' ' 

&6 But the exporters would expect to be injured by the protective feature, regardless of the incidence of 
the duty. 
" Quoted in The Labor Herald, Wilmington, Del., Mar. 13, 1920. 



BRITISH CROWN COLONIES. 355 

assumes that the duty could be shifted to the producer in this manner, 
but suggests that the Indian tanning industry can be put upon its 
feet and this duty removed before this shifting takes place. 

The immediate effect of the imposition of the duty was obscured 
by other factors. A writer, who signed himself '^Indian Merchant," ^^ 
states that the imposition of the duty lowered the price in India by 
13 per cent, making due allowances for contemporary changes in 
the value of the Indian and European currencies. The weekly 
reports published in Hide and Leather show that the market was 
dull at that time and that sales were held up because of the agitation 
to repeal the duty. Shortly after the duty went into effect the 
market stiffened and in a few weeks prices rose by 50 per cent. 
This rise, together with the complexities of the foreign exchange 
situation, make it even more difficult than usual to determine the 
effect of the duty. The rise in prices was due to shortage of stocks 
in the United States, orders from Germany, revival of skin tanning 
in India, a 20 per cent export duty in Spain, and an embargo in 
Sweden, as well as to less specific causes such as the realization that 
a return to peace conditions would not mean an immediate fall in 
prices. The differential feature of the duty also complicates the 
situation. Altogether it is perhaps impossible to determine what 
part the duty played in the price movements of the period. 

Protection of Indian tanning industry. — The Indian Government 
does not believe that the tanning industry as it now exists in India 
can hold its position, at least during the transition period, without 
protection. Tropical tanning has not been entirely successful and 
the chrome leather of India was not acceptable to the British war 
office. The vegetable barks used in India are not unlimited in 
quantity. The quantity and quality of the possible Indian pro- 
duction remain therefore problematic.'''^ On the other hand much 
scientific study is being given to the subject in India and the defects 
of quality may be overcome. The industr}^ is at present still expand- 
ing; 1 but it does not appear that India is likely for many years 
to come to supply even her own market. As to competition in 
foreign markets it may be noted that the cost of tanning has doubled 
in India and that the increased value of silver has put all exporters 
in India at a disadvantage as compared with the prewar situation. 
It may be noted further that the specific export rates fall less 
heavily in proportion to the value on the best grades of hides and 
skins and therefore these qualities will be exported, leaving the 
poorer materials for the Indian industry. The letter of "Indian 
Merchant" stated that the duty as actually levied came to only 
about 8 per cent ad valorem on prime light-weight hides but that 
it was 16 per cent on rejections.^ 

The preferential feature and the interests of the United States. — The 
preferential feature — the rebate of two- thirds of the duty, equal to 
10 per cent ad valorem— is undoubtedly of more importance to the 
United States than the protective feature. It is reported that the 

i's The Times Trade Supplement, Oct. 25, 1919. 
S9 Commerce Reports, Oct. 20, 1919. 

1 This is a general statement, but the industry was much depressed in 1920. The American consul at 
Madras reported in May that the Southern India Skin and Hide Merchants' Association had resolved that 
tanning and shipment of the product should be stopped in the case of skins for three months and in the 
case of hides for six months. (Commerce Reports, June 15, 1920.) 

2 The Times Trade Supplement, Oct. 25, 1919 



356 COLONIAL TARIFF POLICIES-. 

duty has already resulted in the importation of Indian hides into 
Canada directly instead of through New York because of the diffi- 
cult}" in establishing a claim to the rebate if the importation is 
indirect,^ but the exchange situation has also been operating against 
Canada's purchases through INew York, This change means some 
loss to American transportation interests but does not directly 
affect the question of competition in the leather industry. If the 
most convenient route previously was that through New York the 
■change to direct shipment to Canada presumably does not yield a 
net gain of the whole amount of the rebate= 

Whatever the incidence of the duty and whatever the price levels, 
the duty compels American importers to pay nearly 10 per cent 
more for Indian skins than is paid by British and Canadians, or to 
put it the other way, it enables the latter to obtain Indian skins 
about 9 per cent cheaper than their American competitors. When 
skins rose to $1.50 and $2.50 per pound this was a serious matter 
and the memorandum frora the Philadelphia Chamber of Commerce 
states that the amount of the differential duty exceeded the profit of 
the tanners in this country.^ The same memorandum states that 
American tanneries produced $100,000,000 w^orth of glazed kid 
annually. This leather is produced chiefly from goatskins. The 
Labor Herald gives 19,000 as the number of the employees in this 
country affected directly by the duties on Indian hides and skins. 

The extent to which the L'nited States has been dependent on 
India for its raw hides and skins is shown in Table 44 which gives 
the importations into the United States in recent years. The extent 
to which India is dependent upon the United States as a market is 
shown in Table 45. In reading the tables it must be remembered 
that the figures give the iromediate rather than the ultimate origin 
or destination of the trade and that Government control of trade 
and shipping during the war frequently diverted trade from its 
usual channels. Particularly, it should be noted that while Indian 
hides were practically monopolized by the British war office, India 
was forced to export its skins in a raw condition because from April 
1917 the use of tanning materials was restricted to hides. The 
United States imports also relatively small quantities of horse hides 
and miscellaneous hides not separately enumerated. In 1916 and 
earlier years small fractions of these small quantities were derived 
from India but it has not been thought necessary to tabulate the 
trade of these minor varieties. 

8 Journal of Coimnerce (Moatreal), Feb. 10, 1920, p. 19. 
* Hide and Leather, Oct. 4, 1919, p. 23. 



BRITISH CROWN COLOISriES. 



357 



Table 44. — Imports of untanned hides and sJcins into the United States from India for 

fiscal years 1916 to 1920.^ 

[In thousand of dollars.] 





1916 


1917 


1918 


Item. 


Total 
imports. 


Imports 

from 
India. 


Per cent 
from 
India. 


Total 
imports. 


Imports 
from 
India. 


Per cent 
from 
India. 


Total 
imports. 


Imports 
from 
India. 


Per cent 
from 
India. 


Goatskins 2 


27, 406 
88, 050 
16, 907 
18, 839 
2,463 


8, 157 
3,669 
2,348 
888 
1,273 


29.8 
4.2 

13.9 
.4.7 

51.7 


55, 420 
99, 951 
15, 593 
29, 581 
6, 125 


16, 719 
Z, 173 
4,523 
1,710 
3, 963 


30.2 
3.2 

29.0 
5.8 

64.7 


31, 731 

87, 750 
5,277 

19, 106 
2,809 


9,998 
140 
527 
622 
865 


31.5 


Cattle hides ^ 

Calfskins 4 


0.2 
10.0 


Sheepskins & 

Buff^o hides 


3.3 

30.8 


Total 


153, 665 


16, 335 


10.8 


206, 670 


30, 088 


14.6 


126, 673 


12, 152 


9.6 









1919 


1920 


Item. -^ 


Total 
imports. 


Imports 
from 
India. 


Per cent 
from 
India. 


Total 
imports. 


Imports 
from 
India. 


Per cent 
from 
India. 


Goatskins 2 . 


51, 226 
60,324 
10, 141 
21, 480 

2,175 


18, 415 

569 

977 

1, 430 

1,081 


35.9 

9.6 

6.7 
47.9 


121, 513 
151, 218 
38, 065 
47, 070 
3,502 


41, 260 
3,972 
6, 561 
2,504 
1, 908 


33.9 


Cattle hides ^ 


2.6 


Calfskins ^ 


16.9 




5.3 


Buffalo hides . . 


54.5 






Total.. 


145,346 ! 22.473 


15.5 


361, 368 


56, 205 


15.8 











1 Monthly Summary of Foreign Commerce of the United States, June, annually. 

3 In 1912-1916 from one-third to one-half of the goatskins were green and pickled and in this item the 
British East Indies and Malaya are included with British India for these years. 

3 For 1916-1918 these figures contain from per cent to about 16 per cent of hides green or pickled, and for 
these liides British India is not 'distinguished from other British possessions in Asia other than Hongkong. 

^ For 1916-1918 these figures contain from per cent to about 5 per cent of hides green or pickled, and for 
these hides British India is not distinguished from other British possessions in Asia other than Hongkong. 

" For 1916-1918 these figures contain not over 5 per cent of hides, green or pickled, and for these hides 
British India is not distinguished from other British possessions in Asia other than Hongkong. No green 
sheepskins were imported in 1917 or 1918 from this source. 

Table 45. — Exports of hides and slcins ^ from India {private merchandise).^ 
[In thousands of pounds sterling.] 



Country of destination. 


1913-14 


1914-15 


1915-16 


1916-17 


1917-18 


1918-19 


Raw hides: 

United Kingdom 

United States 


166 

698 

563 

296 

70 

2,044 

1,229 

465 


570 
846 
384 
353 
35 
833 
332 
148 


436 
1,501 
2,195 

166 

70 


795 

2,572 

1,008 

248 

171 


857 
391 

777 


989 
195 


Italy „ 

Spain 


469 
21 


France 

Germany 

Austria-Hungary 


7 


20 








All others 


156 


201 


25 


49 


Total 


5, 531 


3,501 


4,524 


4,995 


2,057 


1,743 


Raw skins: 

United Kingdom 


149 

1,668 

443 


136 

1,323 

237 


130 
1,784 

81 


287 

4,023 

301 


387 

2,592 

316 


357 


United States 


3,390 

734 


AU others 






Total 


2,260 


1,696 


1,995 


4,611 


3,295 


4,481 


Dressed and tanned hides: 

Unitfif! Kingdom. . 


1,031 

28 


1,589 

18 


2,033 
9 


2,986 
9 


3,261 
9 


4,727 


AU others 


18 






Total 


1,059 


1,607 


2,042 


2,995 


3,270 


4,745 


Dressed and tanned skins: 

United Kingdom 


1,404 
203 
152 


1,230 
173 

149 


1,109 

481 
109 


2,317 

826 

87 


655 

204 

45 


1,308 


United States 


270 


All others 


123 


Total 


1,759 


1,552 


1,699 


3.231 


904 


1,701 


Grand total . . . „ „ . 


10, 429 


8,356 


10, 260 


15, 832 


9,525 


12,670 





^ Excluding cuttings of hides and skins. 

« Annual Statement of the Sea-borne Trade of British India, 1918, 1919, and 1920. 



358 COLONIAL TAEIFF POLICIES. 

MINOR AND DOUBTFUL CASES OF PREFERENCE. 

In the Seychelles Islands the import duty on dogs from the United 
Kingdom is 3 rupees per head as against 8 rupees on other dogs. 
This provision dates from 1914 or later. 

In the Falkland Islands '^tobacco forming an ingredient in sheep 
dip or hop powder" is exempt from duty only if manufactured in- 
bond in the United Kingdom. This is a clear preference, however 
unimportant, though the motive is probably in essence administrative. 

In the British Crown colonies with their revenue tariffs of sim_ple 
schedules it is most unlikely that there are many or serious discrimina- 
tions concealed in the classifications. No complaints of such dis- 
criminations have been heard, and the immense labor of checking 
their tariff schedules with their trade returns has not been undei*- 
taken. Not only do the indications suggest, both positively and 
negatively, that the tariffs of the British Crown colonies do not con- 
tain concealed tariff preferences, but there are a number of cases in 
which closer consideration of differentials which appear openly in 
their tariffs reveals that it is questionable to what extent such terms 
as preferential or discriminatory duties should be applied. The 
cases in point are certain duties on tobacco and wines designated by 
the country of origin, and the valuations attached in Egypt to certain 
Indian yarns. 

In Egypt, since the autumn of 1917, special valuations have been 
put on certain classes of cotton yarn, differentiating in favor of 
imports from India. '^ Since, however, Indian yarns are known to be 
of a cheaper grade, and since foreign merchants can invoke the aid 
of their Governments if the rates upon their importations exceed 
8 per cent ad valorem, and since the valuations are in fact fixed by 
agreement between the Egyptian government and the merchants, 
it may be affirmed that the separate classification of Indian yarns 
does not operate as a tariff preference. With it may be compared the 
valuations upon ^' iron and steel plates, ordinary, without mark, one- 
eighth inch thick and upwards." These valuations are highest on 
British products and lowest on German and Belgian, and are, in 
milliemes per kilogram, as follows: British, 17 J; American, 14^; 
Belgian and German, 12.^ 

The Falkland Islands charge 2 shillings per gallon or 4 shillings 6 
pence per dozen reputed quart bottles of wine, but '^British" bot- 
tled wines pay only 3 shillings. 

Similar preferential classifications, to the advantage of Australian 
wines chiefly, are found m. Oceania. Australia has tried without 
great success to build up a wine industry, and the exportation in 
1911-1915 was only one-half to three-fourths of £1,000,000 annually. 
This went chiefly to Great Britain and New Zealand, but in smaller 
(][uantities to Ceylon, India, the Fiji Islands, and other South Pacific 
islands. In the Fiji Islands an apparent preference goes back at 
least to 1888, at which time wines were classified as: 

6 E . g. , cotton single yarns, gray or bleached, Nos. 4 to 12: From India, 135 milliemes per kilo, from other 
countries, 220; Nos. 14 to 20, from India, 190 nulh^mes per kilo, from other countries, 225. These rates were 
for the period from Feb. 5 to Apr. 4, 1921, or until denunciation. (B. T. J., Mar. 17, 1921, p. 310.) -^Tife- 
rates for June5-Aug. 4 show smaller differences in the valuations. (Ibid., July 21.) '\> 

a B.T.J,, July 28, 1921, p. 117; rates of June 10, 1921. After the national designations, occurs in each case 
the phrase "and similar articles from all other eoimtries; " so that inferior British products are not penal- 
ized nor do superior German products gain an advantage. 



BRITISH CROWN COLONIES. 359 

Shillings. 

Bordeaux (claret), Australian, gallon or 6 reputed quarts 2 

Sparkling wines, gallon or reputed quarts 6 

All other wines, gallon or G reputed quarts 4 

On December 21, 1911, ''New Zealand and South African" was 
added to "Australian," and on November 4, 1913, the first item of the 
classification was changed to: 

Shillings. 

Bordeaux (claret) and hock 2 

Australian, New Zealand, and South African wines 2 

Similarly, in the Gilbert and Ellice Islands, Australian wines at least 
frorn 1908 and New Zealand and South African wines from 1914 
have paid only one-half the rate laid on those from other sources. 
On the other hand, in the Solomon Islands the preference — after 
existing from at least 1908 — has been abohshed (about 1914), and 
the same is true of tfee Tonga or Friendly Islands, where the rate on 
Australian wines had formerly been only one-fourth of that on other 
wines. 

The only figures available in sufficient detail to exhibit the effect 
of this classification are those of the Fiji Islands for 1905-1908. 
These figures show the quantities, values, and duties paid on each 
class of wines for each port of entry and the totals for the whole 
colony. They show considerable variation in the valuations, espe- 
cially among tlie smaller items, but on the whole prove that the sep- 
arate classification of Australian wines was founded on an ad valorem 
basis. At the port of Suva, for instance, during the four years the 
duty on Australian claret came to 30.6 per cent ad valorem, and on 
other wines it averaged 29,2 per cent; while the higher rate paid by 
sparkling wines is shown to have been only 14.5 per cent ad valorem. 
tJnless therefore there was undervaluation of the Australian wines, 
it is evident that the preference here is only apparent and not real — 
if the true test of a preferential duty be the existence of a lower rate 
ad valorem. 

However, it may be noted that the rate in force in Tonga for sev- 
eral years (one-fourth of the rate of foreign wines) was a real prefer- 
ence even upon an ad valorem basis; that the wording of the tariff of 
the Fiji Islands has since 1915 admitted the sparkling wines ^ of 
Australia at the same low rate as the clarets; and that the special 
classification of one kind of wine may well raise the question whether 
other relatively cheap wines should not receive separate classification 
also. The British colonies which do not classify wines according to 
alcoholic content generally divide them into not more than two 
classes, sparkling and other, or, as in Gibraltar and as formerly in 
Borneo, they divide wines other than sparkling into two classes ac- 
cording to price. '^ It may be that the tariffs of Ceylon and the Straits 
Settlements are also to be interpreted as favoring Australian wines. 
In Ceylon, wines other than sparkling are divided into: 



Item, 


In bottles. 


In wood. 


Claret or still hock 




Rupees. 
1.25 
1.50 


Rupees. 
0.50 


Other vfines. . 


1.00 







(5 Australia's export of sparkluig wines, even including reexports, is very small compared to the total. 

' Borneo, for instance, in 1902 raised the dividing line from 6 shillings per gallon to 8 shillings, which, 
according to the prices disclosed by the Fiji figures, brought the Australian wines into the lower division, 
but in 1908 the distinction between wines other than sparkling was abolished. 



360 COLONIAL TAEIFF POLICIES. 

In the Straits Settlements and in Johore, claret under 26° is classed 
with ale, beer, etc., and thus bears only SO. 48 as against $1.60 ^ per 
gallon on other still wines. As the great bulk of the Australian 
wine is classed as claret, unless its relative value has fallen greatly 
since 1908, this classification admits Australian wine at an advantage 
as compared to other cheap wdnes not claret. It would appear then 
that the previous practice of the British Crown colonies in regard to 
the taxation of wines has been departed from in a number of cases in 
recent years to the special advantage of Australia and more recently 
of South Africa and New Zealand.® 

The recomm.endation ^^ of Mr. G. A. Moore of the committee on 
edible oils suggests that a part of the zeal of the English in raising the 
colonial duties on trade spirits -^ is due to the fact that most of these 
spirits have been imported from Germany and Holland and not from 
Great Britain. It would, however, be unduly suspicious to record 
the high duties long levied on these spirits in British West African 
colonies as instances of intentional differential treatment applied by 
classification. The activity of many philanthropic and missionary 
organizations (such as the Aborigines Protection Society w^hich has 
largely concerned itself with this very question) seems sufficient to 
account for the stand which has long been taken by Great Britain in 
regard both to slavery and the liquor trade. And it should be noted 
that the differential duty recommended by Mr. Moore has not been im- 
posedj but the policy actually adopted has been the entire prohibition 
of the imDortation into West Africa of trade spirits, whether foreign or 
British. 

CYPRUS— DIFFERENTIAL TARIFF OF 1920. 

Discriminatory duties were introduced in Malta and in Cyprus in 
March and May, 1920, but were soon dropped in Malta. ^^ The dif- 
ferential rates of Cyprus are in favor of articles produced in and con- 
signed from any part of the British Empire, and as may be seen from 
the schedule printed belov/, the preferential rates are granted upon all 
dutiable articles. A number of important manufactures of the 
British Empire — such as cottons, woolens, malt liquors, clocks and 
watches, musical instruments, china and earthenware, soap, matches, 
and dyes — now pay only two-thirds of the full duty, while all British 
products not enumerated on the preferential schedule pay five-sixths 
of the full rate. Since many of the more important classes of manu- 
factured goods are ordinarily dutiable at 10 per cent, the differential 
in favor of the British product is 3 J per cent ad valorem. In other 
cases the differential is usually less, as may be seen from Table 46. 

The law which inaugurated the preferential tariff rates of Cyprus 
attached no conditions, except that the articles which received the 
preferences should be consigned f?'om as well as produced 4n the 

8 Straits dollars, of which Sl=2s. 4d.=S0.57 U. S. (prewar par rates"). 

9 New Zealand also gives a preference to Australian wine, charging 5 shillings as against 6 shiUings on 
other wines, the rate for sparkling wines being 15 shiUings. This -oreference does not seem to offset the 
difference in price. 

10 See p. 342. 

11 See p. 313 for definitions. 

12 The preferential tariff rates of Malta were introduced as a Government bill in March, 1920, and;\^sre 
made effective provisionallj' from Mar. 13. The elected members of the council of Government opposed 
the preference and the secretary of state for the colonies instructed the governor (July 10) that he had^^na 
wish to force Malta to give such a preference against the wishes of Malta people" and that he would '"'only 
ask that they may give the matter full consideration next year when the new constitution comes into 
force." The Government bill provided for differential rates on 32 classes of manufactures, omitting textiles 
and some others. The differentiais were, for the most part, 2§ per cent ad valorem on necessaries dutiable 
at 10 per cent, and 5 per cent ad valorem on other articles dutiable at 15 or 20 per cent ad valorem. 



BRITISH CROWN COLONIES. 



361 



British Empire. The protectorates and India were specifically in- 
cluded, and the high commissioner was empowered to include by 
order in council any territories for which Great Britain or any part 
of the Empire might receive a mandate under the League of Nations. 

Table 46. — Preferential tariff rates of Cyprus. 



Goods. 



Full rate. 



Preferential rate. 



Differential in 

favor of British 

goods. 



Musical instruments, and parts thereof. 
Clocks and parts thereof 



Watches and parts thereof. 
Cinematograph films 



10 per cent . 
...-do 



Two-thirds of the 

full rate. 
do 



Beer, ale, porter, and all other malt liquors, 

pier gallon. 
Cotton yarns and thread, per 100 okes i. . . 



do... 

8 per cent . 

2 pence. . . 



Cotton piece goods. 



Matches, per gross of boxes 

Soap: 

Perfumed or toilet, per pound . 

Other 

Woolen yams and threaa 

Woolen manufactures 

Earthenware and china 

Furniture 

Haberdashery and millinery 

Dyes. 
Wine, 



Tine, sparkling, per gallon . 



11 to 18§ shiUings 
or 10 p'er cent. 

13-^ to 261 shilhngs 
or 10 per cent. 

2 pence 



f pence 

I pence — 
10 per cent . 

do 

.....do.... 

do 

do 

8 per cent . 
4 shillings . 



do.. 

do.. 

do.. 



Wine, other kinds: 
Bottled 



In wood . 



Spirits of all sorts, spirituous compounds, 

liqueurs and cordials. 
All goods not otherwise specified 



3 shillings . . 
1 J shillings. 
6 shillings . . 



do 

do 

do 

do 

do 

do.... 

66§ per cent of the 
full rate. 

60 per cent of the 

full rate. 
95 per cent of the 

full rate. 



dyes, 



Firearms 2 

Cartridges and fireworks 

Perfumery, cosmetics, hair 

pomades. 
Manufactures of iron, steel, brass, tin, 

zinc, and silver. 
Manufaetures of leather, linen, hemp, 

and silk. 
Provisions, tinned, bottled, smoked, 

dried, preserved, or pickled. 

Coffee, per 100 okes 

Petroleum, per gallon 



25 per cent . 
20 per cent . 
do 



' Five-si:xths of the 
full rate. 



10 per cent . 
do 

....do 



16 shillings . 
2 pence 



.do. 
.do- 
.do. 



.do. 

.do. 

.do. 

.do. 
.do. 



3-^ per cent ad 
valorem. 

3 per cent ad valo- 
rem. 
Do. 

2| per cent ad 
valorem. 

$0,018 per gallon. 

$0.0063 to S0.017 

per pound or 3^ 

per cent. 
$0,011 to TO.023 per 

pound or 3^ per 

cent. 
$0,013, 

$0,005. 
$0,003. 
3 J per cent. 

Do. 

Do. 

Do. 

Do. 
2f per cent. 
S0.324 per gallon, 



S0.29. 

$0,146. 

$0,073. 



4^ per cent. 

3^ per cent. 

Do. 

15 per cent. 

Do. 

Do. 

$0,002 per pound . 
$0,007 per gallon. 



UOO okes=280 poimds, 

2 Guns and pistols having a value of £4 or less have specific rates which come to 25 per cent or more. 
Certain other articles included in the general classes below also have specific rates. 

PREFERENTIAL WAR RESTRICTIONS I DYESTUFFS. 

During the war the trade of the British colonies was severely 
restricted. The export trade was strictly controlled to prevent 
materials capable of military use from going to hostile countries. 
Imports were reduced, because the European supply of many articles 
was limited and systems of rationing were enforced, and because it 
was considered advisable to reduce the importation of luxuries.^^ 



^3 For instance, there was a duty of 100 per cent ad valorem on motor cars in Ceylon and a prohibition 
upon their entry into the Straits Settlements except as licensed. There is ground, however, for thinking 
that these restrictions v.ere not wholly in theintei'ests of economy. Compare the action of the Federated 
Malay States by which no land was sold for rubber plantations during the war in order that nationals of 
neutral countries might have no advantage over those of the allied powers and particularly over the British. 



362 COLOISJ-IAL TAEIFF POLICIES. 

Trade was restricted also by the shortage of shipping and the neces- 
sity of allocating it to the most useful purposes. In these trade 
restrictions naturally Great Britain and her Alhes were favored, 
and neutrals, especially those contiguous to enemy countries, were 
discriminated against. These discriminations by no means ceased 
Avith the armistice of November 11, 1918, nor even with the signing 
of the treaty of peace with Germany (June 28, 1919). In fact one 
important discrimination was not initiated until three months after 
the armistice, the prohibition upon the importation of dyes tuffs not 
licensed. This measure originated in Great Britain and was recom- 
mended by the British Government to the colonial governments. 
Many of the colonies, including India which is one of the world's 
great markets for dyes, adopted this system of controlhng the im- 
ports of dyes tuffs, though in some cases the action followed that of 
the British Government by almost a year. Except where the pro- 
hibition was worded so as to be applicable only to non-British dyes, 
in every case the adoption of the policy was accompanied by an 
official or semiofficial announcement that licenses would be granted 
as a matter of course to products of the Empire but to foreign dyes 
only when they could not be supplied within the Empire.^* When it 
appeared, however, that the supply of British dyestuffs was quite 
inadequate to meet the demand, in the summer of 1920 the prohibi- 
tion was temporarily suspended in India and some of the other col- 
onies. In the Gold Coast the measure was repealed except as to 
d^^estuffs originating in the countries recently at war with Great 
Britain. 

This prohibition of imports, except as licensed may easily work 
out as a restriction even more severe than the imposition of a duty 
which appears to be prohibitive, since in an emergency even a rate 
ordinarily prohibitive may be paid and unless the duty be exces- 
sively high conditions may so change that the rate ceases to be 
prohibitive. (See pp. 337 and 343.) 

PREFERENTIAL TARIFFS IN THE WEST INDIES. 

Since the West Indies have established their tariff preferences 
almost exclusively in response to Canada's action and primarily to 
the products of that Dominion, the general account of the relations 
between Canada and the West Indies will be given in the chapter on 
the preferential policy in Canada (pp. 696-714), and this section 
will include only a summary of the preferences accorded by the West 
Indies in 1913, and since that 3^ear. 

With negligible exceptions ^^ the first preferential tariff^ rates 
granted by the British West Indies in recent times were those stipu- 
lated in the Canada- West Indies trade agreement of 1912. These 
preferences became effective on June 2, 1913, in ten of the British 
West Indian colonies (see Table 47). Products of Great Britain and 
Newfoundland shared in the preferential treatment. The preference 

1* No effort has been made to make a complete list of the colonies which license or did license the impor- 
tation of dyestuffs or of the exact dates upon which the ordinances became effective. India was ajaaong 
the early colonies to impose the restriction in September, 1919. Other colonies which took similar action 
were Jamaica, the Straits Settlements, Nigeria, the Gold Coast, and Gambia. In Hongkong the licensing 
svstem was applicable only to imports for consumption, and has been repealed. (Commerce F.eports, 
Aug. 11, 1921.) 

li See p. 321. For general description of the tariffs of the West Indies see pp. 318-321.. 



BEITISH CROWN COLONIES. 363 

consisted in granting a reduction of not less than one-fifth of the 
regular duty upon a list of 47 ^^ articles or classes of articles selected 
as being of importance in the trade between Canada and the West 
Indies. 

The legislation of the different West Indian colonies putting into 
effect in 1913 the terms of the agreement did not go beyond those 
terms to any appreciable extent, though upon articles dutiable at 
specific rates the preference was frequently made slightly greater than 
one-fifth in order to avoid awkward fractions or amounts. Barbados 
alone made some articles dutiable (at 2 per cent) under the general 
tariff and free under the preferential tariff.^^ In subsequent tariff 
laws various colonies made minor extensions of the preferential sys- 
tem beyond the provisions of the agreement, either in granting prefer- 
ential reductions greatel- than one-fifth or in admitting to the benefit 
of the preference other parts of the Empire. Trinidad in 1917 granted 
free admission under the preferential schedule to a few articles which 
remained dutiable under the general schedule. ^^ British Guiana, in 
her tariff revision of 1918, established preferential duties on articles 
not mentioned in the Canada- West Indies agreement, ^^ and in which 
Canada had no export trade, namely, fuel oil and crude petroleum, 
the preferences amounting to half the rates levied on foreign goods. 
Barbados in 1913 and Trinidad in 1917 extended the preferential tariff 
to the entire British Empire. In 1914, British Guiana, Grenada, and 
St. Vincent extended their preferential rates ^Ho all British posses- 
sions which are parties to the Canada- West Indies convention or 
which may hereafter become parties thereto," thus granting to the 
other British West Indies, parties to the agreement, the concessions 
which they granted to Canada, Newfoundland, and the United 
Kingdom. 

AGREEMENT OF 1920. 

In 1920, as a result of a second Canada-West Indies trade agree-, 
ment the scope of the preference granted by the West Indies was 
increased in three respects: (1) Preferential rates are now granted 
throughout the Vfhole of the tariff schedules with a very few exceptions 
instead of being confined to a selected list of items; (2) all the West 
Indian colonies except Bermuda are nov/ parties to the agreement, 
and (3) the amount of the differential has been increased in every 
case, though not uniformly. The more important colonies which ac- 
cepted the preferential policy in 1912 have now agreed to increase the 
differential to one half of the ordinary duty, and the colonies v/hich 
did not adopt the policy until 1920 have introduced differentials of 

16 Including flour, on which the reduction was to be not less than 12 cents per 100 pounds. In several 
of the colonies flour was dutiable at less than 5 shillings per barrel (196 pounds) , so that this provision required 
a larger preference than one-fifth. For the chief classes of articles on which the West Indies granted a 
preference see footnote on p. 709. The tariff of British Guiana, enacted in 1913, showed 60 preferential 
items or subitems as compared with 100 nonpreferential. Moreover, there was no preference on unenu- 
merated dutiable articles, notably textiles of all kinds. No preference was given on arms, ammunition, 
explosives and fireworks, bricks and lime, vinegar, candles, butter substitutes, animal fats other than 
lard, pickles, sugar, confectionery, jam and jellies, matches, iron and steel bars, sheets, bolts, etc, mineral 
oils, tar and turpentine, salt, and silver. 

^^ Paper, glass bottles, various kinds of machinery, poultry, and fresh meat, fruits, or vegetables. As 
the prevailing ad valorem rates of the general tariff" were only 10, Hi, and 12 per cent, the preferential reduc- 
tions were only from 2 to 2J per cent ad valorem, so that the preference to machinery, paper, etc. (though 
it was the whole of the duty), was smaller than some of the others. In the Leeward Islands the duties on 
flour were 6 shillings or 6 shillings 8 pence per barrel, but the preference of one-fifth was given instead of 
the minimum of 1 shilhng per barrel. 

18 Cattle, sheep, swine, and goats, dutiable respectively at 10 shillings, 2 shillings 6 pence, 1 shilhng, and 
1 shiUing per head, and coconut oil dutiable at 6 pence per gallon. Goats and coconut oil were not listed 
In the agreement as entitled to preferential entry into the West Indies. 

19 Also, in 1917, on cartridges, the preference being one-third of 60 per cent ad valorem. 

185766°— 22 24 



864 COLONIAL TAEIFF POLICIES. 

one-third or one-fourth. Table 47 shows the main features of the 
extension of these West Indian preferences, showing the increase of 
the rate of preference according to the 1920 agreement and the further 
increase in certain cases by legislation. In 1920-21, more fre- 
quently than in 1912-13, the West Indian governments have granted 
preferences which exceed the terms of their agreement with Canada, 
extending the preference to the whole Empire or including prefer- 
ences of greater amounts than those pledged, or putting the new 
preferential schedules into effect before the obligation matured. 
The representatives of the Bahamas had agreed to a preference of 
only 10 per cent, but the legislature of the islands not only increased 
this to 25 per cent, but made it effective from August 26, 1920. 
Though Canada did not put the agreement into effect until May 10, 
1921, and though the agreement was not proclaimed as in force in 
Canada and throughout the West Indies" until September 1, 1921, 
new tariffs designed to carry out its provisions became effective 
in British Honduras on October 12, 1920, in Trinidad ^^ and Grenada 
on November 5 and 23, and in British Guiana on December 13. 
These four colonies made the preference applicable to products of 
the whole. Empire ^^ and all granted some preferences greater than 
those pledged in the agreement. Trinidad reduced her general 
rates upon foodstuffs and feedstuffs, but by putting them on the 
Empire free list maintained or increased the absolute amount of the 
differentials. Machinery on which the differential had been only 
one-half per cent was also put on the Empire free list, while the rate 
on the foreign article was raised to 5 per cent. Cotton piece goods 
which were not included in the agreement of 1912 and on which there 
had been no preference, are, for the most part, now dutiable at 10^^° 
per cent under the general tariff and free under the preferential. 
Grenada exempted from duty, if produced within the Empire, 
machinery, blasting powder, and fuel and illuminating oils, and gave 
a preference of 50 per cent on lumber. St. Lucia granted a special 
preference upon wearing apparel and articles not enumerated in the 
tariff, levying 15 per cent upon foreign products while the products 
of the Empire are exempt. Table 48 sets forth some of the more 
important cases in which the preferences accorded by the West 
Indian Islands exceed the percentages of reduction stipulated in the 
agreement. 

20 Trinidad's tariff of Nov. 5, 1920, was annoimced as a fulnllment of the tenus of the trade agreement 
but through a misimderstanding the amount of the preference (the differential) vv'as made 50 per cent of 
the preferential rate instead of 50 per cent of the general rate. This tariff, however, not only increased the 
preference from 20 per cent to asj per cent, but removed the duty entirely from various products of the 
Empii'e. Thetariff of April, 1921, made eff'ective the 50 per cent preference as pledged in the agreement. 

21 Owing to the slowness of communication with the smaller islajids and to the fact that the agreement 
did not become effective until Sept. 1, 1021. the blanks in Table 47 probably represent lack of information 
rather than a failure to extend the preference to the United Kingdom or to the whole Empire. 

21a The rate was 15 per cent in the tariff of November, 1920. The present rates on goods whose value 
exceeds Is, Sd. per poujid are: General, 20 per cent; preferential, 10 per cent. 



BRITISH CBOWl^ COLONIES. 365 

Table 47. — Increases in preferences accorded by the British West Indies. 



Colony. 


Preferential reduc- 
tion granted by 
trade aj^reements 
of— 


Preference 

extended 

to the 

whole 

Empire. 


Preferences 

exceeding 

terms of 

agree- 




1912-13 


1920-21 


ments. 


Trinidad.' 


Per cent. 
20 
20 
20 

20 
20 
20 

20 
20 
20 
20 

None. 

None. 

None. 

None. 

None. 

None. 


Fer cent. 
50 
50 
50 

33J 
S?.l 

m 

33i 
33^ 
33J 
33J 

11 

25 

2 10 

4 25 


1917,1920 

1920 

1913, 1921 


1917,1020 
1917, 1C20 
1913 


British Guiana 


Barbados 


Windward Islands: 
St. Vincent 


1920 


Grenada 


1920 


1920 


St. Lucia. .. 


1920 


Leeward Islands: 

A.ntigna.. 


1921 




Dominica 




St. Kitts 


(}) 


1921 


Montserrat 




Virc;in Islands 








1920 


1920 


Jamaica 


1920 


Turks and Caicos 






Bahamas 


3 1921 


1920 


Bermuda . . 











1 The tariff act of Aug. l9, 1921, provides that the governor may, with the approval of the legislature 
and the sanction of the secretary of state, declare the preferential rates applicable to products of any 
part of the British Empire in which provision is made for according a preference to imports from St. 
Christopher-Nevis. 

2 See text. 

3 " Provided that the customs tariff of any such part of the Empire is on the whole as favorable to the 
colony as the said reduction of 25 per centum." 

i The trade agreement was debated in the Bermuda Assembly on Nov. 24, 1920, and referred to a 
select committee of nine. The committee, with one dissenting voice, recommended the ratification of the 
agreement, but ratification was defeated by the assembly on Mar. 18, 1921, by 1(5 votes to 11. 

The greater preferences accorded in the West Indies in 1920-21 
have been generally accompanied by the raising of the rates upon 
foreign articles. (See p. 318.) As the preference is in each case i\ 
percentage of the duty payable on foreign products, the difference 
between 20 per cent (the preference of 1912-13) and 25, S3|, or 50 
per cent (the present preferences) does not measure the full increase 
in the differential which burdens importers from nonpreferential 
sources. The typical preference in 1913 may be said to have been 
one-fifth of 10 or 15 per cent ad valorem, while now the typical 
British West Indian preference is one-third or one-half of 15 or 20 
per cent ad valorem, and while British Honduras in 1921 somewhat 
decreased the British preference by assigning to the pound sterling 
a value of |4,86 instead of $4, a number of the other colonies have 
increased the preference, so far as American competition is con- 
cerned and to the extent to which they employ ad valorem duties, 
by providing that foreign currencies shall be converted at m.arket 
rates of exchange. 



366 



COLONIAL TARIFF POLICIES. 



Table 48. — Illustrations of preferential rates granted by the British West Indies in excess 
of the terms of the Canada-West Indies trade agreement of 1920. 



Colonies and articles. 



Trinidad: 

Cornmeal, per 100 pounds 

Canned or cured meats, per 100 pounds 

Canned vegetables, per 100 pounds , 

Cheese, butter, and latd, per 100 pounds , 

Machinery and parts (agricultural, sugar, mining, 
electric, railway, marine, printing, sewing). 

Cotton piece goods, not exceeding in cost Is. 3d. 
per yard. 

Table glassware, not cut; bottles, lamp chimneys. . . 
Jamaica: 

Cotton piece goods 

British Guiana: 

Machinery (30 kinds) 

Grenada: 

Blasting powder, per pound ^ 

Fuel oil, per gallon 

Illuminating oil, per gallon 

Lumber, sawn or hewn, per 1 ,000 feet . . 

Machinery and parts (agricultural, sugar, mining, 
railway, printing; fire engines). 
British Honduras: 

Jewelry 

Clocks, watches, and parts 

Tea 

Nails, woven-wire fencing 

Cheese 

Cornmeal; beans and peas , 

Macaroni, oatmeal, sago and other cereal foods , 

Cement 

Blasting powder i 

Machinery (8 kinds) 

Dried fish 

Fuel oil, per gallon 



Previous rates. 



General. 



Is. 6d 

4s. 2d 

8s. Od 

8s. 4d 

2| per cent 



Preferen- 
tial. 



ls.2id.-. 

3s. 4d 

6s. 8d 

6s. 8d 

2 per cent , 



10 per cent 

10 per cent. 8 per cent 

16| per cent 

15 per cent. 



12 per cent. 



..6d., 
..9d. 
..4d. 
..10s. 
Free. 



15 per cent 

do... 

.10 cents per pound. 

15 per cent 

do 

do.... 



, do.... 

, do.... 

do 

do 

, do 

1 cent I free 



New rates. 



General. 



Is 

2s. Id 

4s. 2d 

4s. 2d 

5 per cent . 

10 per cent. 

10 per cent. 

16|percent. 

5 per cent . 



...do 

4d 

4d 

10s....... 

5 per cent 



25 per cent. 

'.'.'.do'.'.'.'.'.'. 
15 per cent. 

'.'.'.do'.'.'.'.'.'. 

,..do 

...do 

10 per cent. 
5 per cent . 

..do 

2 cents 



Preferen- 

tial. 



Free. 
Do. 
Do. 
Do. 
Do. 

Do. 

Do. 
10 per cent. 
Free. 

Do. 

Do. 
2d. 
5s. 
Free. 



10 per cent. 

Do. 

Do. 
5 per cent. 

Do. 

Do. 

Do. 
Free. 

Do. 

Do. 

Do. 

Do. 



Jamaica, on May 27, 1920, a few days before the signature of the 
Canada- West Indies trade agreement, granted an important pref- 
erence upon cottons produced in the United Kingdom. The pref- 
erential reduction is 40 per cent of the general duty and this is increased 
to 50 per cent for goods produced from cotton grown within the 
Empire. Jamaica's general rate is 16§ per cent ad valorem and the 
preferential rates are therefore 10 per cent and 8 J per cent, respec- 
tively. The governor proposed a preference upon woolen goods, but 
this was rejected by the Assembly on the ground that Great Britain 
already had a practical monopoly of the market, and that, therefore, 
the preference would cause a serious loss of revenue without being 
of benefit to British trade. (See p. 371.) 

This Jamaican preference to the United Kingdom — a preference 
greater than any that Jamaica grants to Canada— serves to emphasize 
the fact that the West Indian preferences of 1920-21 wear less of a 
Canadian and more of an imperial aspect than those of earlier years. 
This is seen in two ways. Four years after the agreement of 1912-13 
became effective, only two West Indian colonies had extended their 
preferences to the Empire, whereas in 1920-21, before the day had 
arrived for the formal operation of the agreement, half a dozen 
colonies had granted preferences to Great Britain or to the whole 
Empire. The rapid extension of the West Indian preferences to 
Great Britain ^^ undoubtedly has been influenced by the adoption, 

22 And to the rest of the Empire; but the trade of the West Indies is almost wholly with Great Britain, 
Canada, and the United States. 



BRITISH CROWN COLONIES. 367 

in 1919, of the preferential policy in Great Britain, resulting in sub- 
stantial preferences for West Indian sugar, cocoa, and rum. Secondly, 
the preferences granted in 1913 were restricted to articles in which 
Canadian manufacturers and traders were interested and the exten- 
sion of these limited preferences to products of the whole Empire was 
of little practical importance. The preferential list of 1912-13 did 
not include all of the articles exported from Canada to the West 
Indies, and to that extent the adoption of the principle of a preference 
upon all dutiable articles increased the advantage conferred upon 
Canada; but the adoption of this principle is of greater significance 
in connection with the extension of the preferences to products of 
the whole Empire. For while formerly, if exporters in the United 
Kingdom were specially interested in exporting a given article to the 
West Indies, the chances were that it was an article of not sufficient 
importance to Canadian trade to be included in the preferential list, 
now exporters of practically every article which is dutiable in the 
West Indies receive the tariflP advantage there. Every West Indian 
government, therefore, which extends to Great Britain the preferences 
of the 1920 trade agreement, confers a substantial advantage on 
British exporters, in proportion to the trade of the island concerned. 

Summary and Conclusion. 

In reviewing the history and the present status of the tariff policy 
pursued in the British Crown colonies and India, the most striking 
features are the maintenance of the open door for 60 years and the 
rapid introduction of differential duties beginning in 1919. Before 
the war, examples of such duties in the Crown colonies were found 
only 23 in the Federated Malay States and in some of the West Indian 
colonies. In the Federated Malay States there was a prohibitive 
duty on the exportation of tin ore to be smelted elsewhere than in 
the Straits Settlements or the United Kingdom. But while this was 
obviously a preferential duty in favor of a sister colony, the Federated 
Malay States and the Straits Settlements by geographical contiguity, 
commercial routes, and governmental organization are so much more 
closely united than neighboring colonies of the same power usually 
are, that the duty might be regarded almost as a protective rather 
than as a differential duty.^* The preferential rates granted in 1913 
in the West Indian colonies reflected Canadian rather than British 
policy, though the United Kingdom also benefited by the reductions. 
The preferences Vv^ere granted on a limited list of articles in which 
Canada was particularly interested, and the reductions were small — 
one-fifth of the general tariff rates, few of which exceeded 15 per cent 
ad valorem; i. e., the differential on most articles was only 2 or 3 per 
cent ad valorem. 

During, the Yv^ar, trade v/as controlled by prohibitions and licenses 
and only to a minor extent by tariff rates. These prohibitions 
frequently, if not usually, discriminated in favor of imperial trade 
and in some instances in favor of the trade of allied countries. With 

23 For other examples of minor importance see Rhodesia, Jamaica, and Fiji, pp. 755, 321, and 358. 
The preferences in the Crown colonies in South Africa, for reasons explained above, are not treated in 
this chapter. 

^^ All preferential duties may be said to be protective of the trade of the Empire in which they are found. 
The point here is that some might argue— though apparently this defense has not been mad.e — that the 
Federated Malay States and the Straits Settlements should be considered one and the same part of the 
Empire. 



368 COLONIAL T.\EIFF POLICIES. 

the return of peace, these methods of control are being gradually- 
abandoned and tariffs are resuming their importance in the determi- 
nation of trade channels. The trade in vegetable oils and oil seeds, 
for instance, was rigidly controlled during the war; after the cessa- 
tion of hostilities the exportation of these products from British 
colonies to destinations other than Great Britain, France, and Italy 
or their colonies was prohibited; and it was not until October, 1919, 
that the difierential duty on palm kernels exported from West- 
African colonies was put into effect. Preliminary steps taken in 
1916 for the introduction of this last named duty, as well 8.s certain 
decisions of the imperial war cabinet and imperial war conference, 
shovved clearly that the Government then in power in Great Britain 
held views on the tariff different from those of the Liberal Party 
which had been in power from 1906 until after the beginning of the 
war, but it was not until the introduction of the budget for 1919-20 
that the British Government reciprocated in some measure in the 
preferential practice. While the extreme partisans of imperial 
preference demand the imposition of a wide range of duties in the 
United Kingdom in order that an equally wide range of differentials 
may be instituted in favor of the trade of the colonies, the British 
Government up to the present time has confined its preferences to 
those articles upon which there were already duties in force. As 
thus limited, the 'imperial principle/' as the governor of Jamaica 
termed it, ^4s that you should not be obliged to impose any duties 
except those which suit the local interest of the colony, but that 
where duties are imposed, preferences should be given to goods of 
imperial origin/"' ^^ This policy or ^'principle," which in the Mother 
Country confines preferential rates to only 10.7 per cent of the 
total imports/® as only this proportion is dutiable, when applied in 
the Crown colonies, results in preferential rates upon 70 to 90 per 
cent of their imports. Moreover, in the colonies the preferential 
pohcy has been extended to export duties and new duties have been 
imposed in order to create the basis for a preference.^^ 

The differential duties which have been introduced since the sum- 
mer of 1919 are as follows: There has been imposed upon the expor- 
tation of tin ore from Nigeria a duty of 3| per cent ad valorem; and 
upon the exportation of palm kernels from the four British West 
African colonies a duty of £2 per ton, a rate considered prohibitive 
at the time of its imposition. In the British West Indies aU pre- 
viously existing preferential tariffs have been extended from a 
limited list of articles to all dutiable articles ^^ and the amount of 
the differential has been increased. The chief colonies which for- 
merly granted tariff favors to imperial trade have raised the differ- 
ential to ^'not less than 50 per cent," while those colonies which 
formerly held aloof from the preferential tariff movement have 
granted differentials of one-third or one-fourth, Jamaica — one of 

*5 Address of the governor of Jamaica to the legislative council, quoted from the Kingston Gleaner, 
Mar. 17, 1920. 

26 10.7 is the percentage of dutiable imports in Great Britain as shown by the statistics for 1918, excluding 
specie, bullion, and diamonds. 

27 In some instances the duty and the diSerential are coincident, but it is difficult to state which of the 
two has been the primary object. In the case of the export duty upon untanned hides and skins from 
India the protective feature of the duty was the primary object in the eyes of the Indians, but it is none 
the less possible that the duty might truthfully be said to have been imposed in order to create the basis 
for a preference. The imposition of duties with the specific object of granting a preference thereon played 
an important part in the negotiations between Canada and the West Indies. 

as With few exceptions. 



BRITISH CROWN COLONIES. 369 

the colonies which did not enter the reciprocity arrangement with 
Canada in 1912 and which in 1920 granted a differential of only 
one-fourth— ^had earher in 1920 granted a differential of 40 per cent 
on cotton goods, or of 50 per cent in case the goods were woven from 
cotton grown within the British Empire.^^ The base rates upon 
which these West Indian differentials are reckoned would not be 
considered high in countries which pursue a protective policy, but 
they have been going up, the differential in most cases now comes to 
from 4 to 10 per cent of the value of the goods. Cyprus has estab- 
lished differentials upon all dutiable goods, giving reductions chiefly 
of one- third or one-sixth. These reductions come to 1§, 2|, or 3| per 
cent on most classes of manufactures. The differentials in all these 
tariffs, therefore, are relatively small and are still comparable rather 
with the South African preferential rate than with the Canadian. 
The Fijian tariff of 1922 has greater differentials; see page 371. 

At this time, therefore, general systems of preferential import 
duties are found in Fiji, in Cyprus and in all the British West Indies; 
no general systems of differential export duties are found, but in nine 
colonies such duties are imposed upon one or tw^o products. But 
while the export-duties are so few in number, and wmle the duty on 
palm kernels is directed primarily against German trade and is pro- 
fessedly only a temporary measure, it must be noted that the rate 
on palm kernels was intended to be and that on Malayan tin is pro- 
hibitive. Compared to the differentials in the import duties (which 
are indeed large enough to give a perceptible advantage to British 
trade where competition is close), these export duties are drastic and 
indicate rather an intention of monopolizing the raw f)roducts than 
of giving a slight though perceptible advantage to British trade. 

As no colony enforces differentials both in its import duties and 
in its export duties, there are altogether 26 British colonies (out of 
the 57 vfhich are considered in this chapter) in which the principle 
of a differential duty has been accepted by the local government. 
Since there are at least five colonies in which all tariff diff'erentials 
are prohibited by treaty ^^ and since the imposition of such duties 
in the free ports would be a complete negation of the policy which 
has maintained them as free ports, ^^ the preferential tariff policy has 
been inaugurated in a majority of the colonies in which it is feasible 
to introduce it. This method of statement, however, greatly ex- 
aggerates the importance which has already been attained by the 
movement in favor of imperial preferences, since the 26 includes 
many small colonies, notably the eight Windward and Leeward 
Islands, and since the export duties fall on only a small part of the 
ex|)ort trade of the colonies in which they are levied. The 17 colonies 
which enforce differential import duties have, in fact, only about 
4 per cent ^^ of the total import trade of the Crown colonies and India, 
Differential export duties are found in 9 colonies, including India and 
others of importance. But important as these colonies are,^^ suice 
the differential export duties are confined to hides and skins, tin ore, 

^ The governor proposed a differential also upon woolen goods, but the assembly considered this unnec- 
essary in view of the fact that Great Britain held already a practical monopoly of the local market. 

30 Nyasaland, Kenya, Zanzibar, Egypt, and the New Hebrides. Diflerentialimport duties are also pro- 
hibitedin Nigeria and the Gold Coast. For the obligations in regard to the Pacific islands, see p. 78, 

«i But see footnote 35, p. 370, for the Straits Settlements. 

22 In 1918 the percentage was 4.3. As these colonies all have free lists, the differential duties are probably 
not levied upon more than 3^ per cent of the total import trade of the Crown colonies and India. 

»8 Their trade is nearly one-half of tbe total trade of the colonies under consideration. 



370 COLONIAL TAEIFF POLICIES. 

and palm kernels, the differentials are leviable upon only some 7 
per cent of the total export trade of the Crown colonies and India. 
At present, therefore, the principle of preferential tariffs has been 
applied to only 5 or 6 per cent of the total trade of these colonies. 
None the less, the movement in favor of preferential tariffs is signifi- 
cant by reason of (1) its comparatively rapid growth, (2) the special 
interests of the United States, and (3) because of the new features 
involved in the differential export duties. 

(1) Within the last three years the number of these colonies en- 
forcing differential import duties has increased by 8^- and of those 
enforcing differential export duties by 5; or a total, since there are 
no duplicates, of 13 colonies which have accepted the principle of 
preferential tariffs. Further, all the colonies which previously made 
use of differential import duties have increased the range and extent 
of these duties, and other colonies are considering the adoption of 
a preferential tariff policy.^^ 

(2) While the trade which has been already affected by the prefer- 
ential 'duties of the Croviai colonies and India is only a small fraction 
of the total, it includes the import trade of the West Indies, which for 
geographical reasons offer a natural market for American products, 
and it includes the trade in Indian hides and skins upon which 
American industries are dependent for supplies. 

(3) While the differential duties at present are so few, in so vast 
an Empire and one which controls the major part of the world's sup- 
plies of so many articles the reintroduction, on however limited a 
scale, of the old mercantilist principle of the reservation of colonial 
products to the Mother Country must cause serious concern to the 
rest of the world. 

Bibliography. 

(See p. 834 for bibliography of treaty collections, and p. 835 for general works and 
periodicals.) 

Bruce, Sir Charles. The Broad Stone of Empire. London, 1910. 

Fuchs, Karl. The Trade Policy of Great Britain and her Colonies since 1860. Lon- 
don, 1905. 

3< Cyprus, Bermuda,1 he Bahamas, British Honduras, Jamaica, TurksandCaicos,andthe Virgin Islands. 
If the Windward and Leeward Islands be grouped as two colonies, and Turks and Caicos be disregarded 
as a dependency of Jamaica, the number of colonies enforcing differential import duties before the war 
was 5 and is now 10, while those enforcing differential export duties have increased from 4 to 9. 

3i In Ceylon a committee was appointed in February, 1920, to make plans for "giving elTective preference 
to articles produced within the British Empire" (Commerce Reports, Feb. 28, 1920), and a similar com- 
mittee was appointed in April, 1920: 

" (1) To inquireinto the present tarift of import duties as existing both in the colony [Straits Settlements] 
and the Federated Malay States, and to advise Government as to the desirability of adopting some scheme 
of preferential rates of duty on goods consigned from and grown, produced, or manufactured in the British 
Empire. 

" (2) To inquire into and report to Goverrmaent as to the desirability of adopting some scheme of protec- 
tive Import duties for the purpose of encouraging the establishment of local industries in either the colony 
or the Federated Malay States." 

In the membership of these committees the consumer and the native merchant do not appear; both 
committees are composed of offieialsand British merchants. In the case of the ports of the Straits Settle- 
ments it seems likely that special care will be taken that only imports for consumpti-'-n are burdened with 
duties. The conclusions of the committee for British India,\vhich had the question under consideration, 
have been given at length elsewhere. It appears probable that the growing influence of the Indians in 
the government of that countr j will result in the introduction of protective duties, but it is highly probable 
that the British opponents of such protection will secure a compromise by which the fuU amount of the 
duties will not be levied upon British products. On the other hand, the preferential duties drafted by 
the governor of Malta were rejected by the assembly and unfavorable replies were received from Hongkong 
end Sierra Leone to the proposal of the colonial office suggesting the adoption of preferential tariff systems. 

The Government of Ceylon proposed (Ceylon Governmetit Gazette Extraordinary, Sept. 1, 1921) a 
preferential tariff for aU dutiable imports except foodstuffs, liquors, and tobacco. The chief differentials 
were: Arms and explosives, boots, furniture, Jewelry, silks, woolens and mixed goods, cutlery, motor cars, 
and electrical goods, 10 per cent; other metal wares, 5 per cent or 7^ per cent; cotton textiles, 5^ per cent; 
unenumerated articles, 5 per cent. These rates became effective Sept. 2, subject to ratification by the 
legislative council; the new tariff was abandoned, however, and the former rates restored from Sept. 10, 
(Commerce Reports, Sept. 19, 1921.) 



BRITISH CROWN COLONIES. 371 

Great Britain. Annual Statement of the Sea-borne Trade and Navigation of British 
India with the British Empire and Foreign Countries. Calcutta, annually. 
Colonial Office List. London, annually. 
Colonial Statistical Tables. London, annually. 
Parliamentary Debates. 

Report for 1914 on the Federated Malay States by the Resident General. Par- 
liamentary Papers, 1914, Cd. 8155. 
Review of the Trade of India. Calcutta and London, annually. 
Statistical Abstract for the Several British Self-Governing Dominions, Colonies, 

Possessions, and Protectorates. London, annually. 
Statistical Abstract relating to British India. Calcutta, annually. 
Jadunath Sarkar. Economics of British India. Calcutta, 1913. 
Kale, V. G. Introduction to Indian Economics. Poona, 1917. 
Ladd, Durant Ferson. Trade and Shipping in West Africa. Wash., 1920. 
Lajpat Rai. England's Debt to India. New York, 1917. 
The Mineral Industry. New York, annually. 
Pegna, Enrico. Le Regime Douanier de I'Egypte et ses Reform.es Possibles, L'Egypte 

Contemporaine. Cairo, vol. 8. 
Root, J. W. Colonial Tariffs. Liverpool, 1906. 

Strachey, Sir John. India, Its Administration and Progress. London, 1903, 3d ed. 
Swettenham, Sir Frank. British Malaya. London, 1907. 

Tariff Commission (London). The Trade Relations of India with the LTnited King- 
dom, British Possessions, and Foreign Countries, pt. 1, 1908. 
TJ. S. Tariff Commission. Reciprocity and Commercial Treaties. Wash., 1Q19. 

PERIODICALS. 

The Economist. London, weekly. 

Hide and Leather. Chicago, weekly. 

Journal of Commerce. Montreal, weekly. 

Kingston Gleaner. Jamaica, daily,. 

The Labor Herald. Wilmington, Del., daily. 

The Statist. London, weekly. 

Addenda. 

Kenya,_ Uganda, Nyasaland, and Zanzibar. — In Nyasaland from October 1, 1921, and in the other three 
East African colonies from August 10, 1921, the general rates were increased as follows: In Zanzibar, from 
11 to 10 per cent; in Nyasaland, from 10 to 15 per cent; and in Kenya and Uganda, from 10 to 20 per cent 
ad valorem. In Kenya, building materials (except timber), cement, chemicals, galvanized iron, scientific 
instruments, kerosene, paint, and soap remain dutiable at 10 per cent; rice, wheat, wheat flour, and sugar 
become subject to a rate of 15 per cent; and wines, tobaccoes, playing cards, jewelry, perfumery, silks, 
pianos, and gramophones at 30 per cent. The export duty on ivory is raised from 15 to 30 per cent ad 
valorem. (B. T. J., Aug. 11 and Sept. 22, 1921.) 

These rates of import duty in excess of 10 per cent are plainly contrary to the general act of the conference 
at BerUn, which is still in force. (See p. 401.) 

Egypt. — The duty on wood (except firewood) has been raised to 10 per cent, and that on benzine and 
mineral lubricating oils to 15 per cent ad valorem (decree of Mar. 31, 1921). A consumption duty of 2 per 
cent ad valorem has been imposed upon about 50 articles, including certain acids, vegetable oils, beer, 
preserved meats, condensed milk, dried fruits, spices, tea, coffee, cocoa, tarred paper, window glass, and 
iron and steel bars, angles, plates, etc. These duties are leviable upon domestic products as well as upon 
imports. (Decree of Aug. 1, 1921; Commerce Reports, Oct. 17, 1921.) 

India. — An act assented to on September 29, 1921, imposes an export duty on lac at the rate of 4 annas 
per maund (87f pounds), and at one-half of that rate for refuse lac. The proceeds are to be turned over 
to the Lac Association for the scientific promotion of the industry. 

Jamaica. — On December 7, 1921, the Government introduced a bill to raise the general rate of Jamaica's 
tariff to 20 per cent ad valorem. This bill provides for a preference of one-fourth upon British andC an adian 
goods, but the bill continues the rate of 10 per cent upon British cotton piece goods, thus increasing the 
preference to one-half. 

Preferential tariff in Fiji. — On January 1, 1922, a new tariff became effective in the Fiji Islands, contain- 
ing higher rates and larger differentials than those of any other British Crown Colony. The differentials 
are granted to products of any part of the British Empire. The free list includes books, periodicals and 
music, seeds and plants, manures, gas cylinders, and a few other items. On kerosene, gasoline, and sugar 
there are no differentials. Specific duties are levied on 84 items (chiefly foodstufl's and beverages, but 
also tobacco, matches, plain soaps, paints, iron, bags, and dynamite) and on these the differential is one- 
half, with the exception of coke, upon which the whole of the duty of 26s. 6d. per ton is remitted. On the 
other 120 items the differential is 12J per cent ad valorem. On most of these items the foreign and the 
British rates are, respectively, 27iand 15 per cent, so that the differential is somewhat less than one-half 
of the larger duty; but upon machinery, railway equipment, and lighters the rates are 12| and 10 per cent, 
respectively, except for certain agricultural machines and implements which are dutiable at 20 and 7J 
per cent. Coal, films, fresh fruit and vegetables, church furniture, unframed pictures, and a few other 
articles may be imported free if products of the British Empire, but are otherwise dutiable at 12| per cent 
ad valorem. 



Chapter VI. 
COLONIAL TARIFF POLICY OF ITALY. 



CONTENTS. 



Page. 
I. Introduction: 

The Italian colonies 373 

Area and population- 
Table 1.— Italian colonies in Af- 
rica 374 

Commercial importance 374 

Table 2.— Trade of the ItaUan 

colonies 375 

II. Government of the colonies and making 
of tariffs: 

The Central Government 375 

The colonial governors and their powers . 376 
Tariff making 378 

III. Italian colonial tariff policy and system: 
Treaty limitations- 
Free trade in the Congo Basin 379 

Restriction on sale of firearms and 

alcohol 380 

Commercial treaties with individual 

countries 381 

Tariff policy- 
Few preferences to Italian colonial 

products 382 

Objects sought: Chiefly local interest 

and conservation 382 

Certain preferences in the colonies to 
Italian trade- 
Open preferences 383 

Concealed preference in Libia 383 

Conclusions as to preferences 383 

Colonial tariff system — 
Character of schedules- 
Import duties and free lists 3S4 

Export and statistical duties 384 

IV. Tariffs of the colonies individually: 
Eritrea- 
Situation and commerce 384 

Table 3— Trade of Eritrea 385 

Table 4. —Imports into Eritrea . . 386 
Table 5. — Exports from Eritrea.. 386 
Tariff history— 

Assab and Massowa 387 

Exemption of Italian goods 387 

Export duties 388 

Treaty with the Anglo-Egyptian 

Sudan 388 

Changes in rates of import duties . 388 
Preferences in Italv to products of 

Eritrea \ 389 

Present tariff rates — 
Import duties — 

Tabular statement: Eritrean 

import duties 390 

Export duties — 

Tabular statement: Export 

duties 391 

Prohibitions, restrictions, and 

monopolies 392 

Present preferences in Italy to 

products of Eritrea 392 

Tabular statement: Itahan 

import duties 393 

Effects of the tariff differentials on 

Eritrean-Itahan trade 393 

Table 6.— Growth of Italian ex- ■ 
port trade to Eritrea and the 

trade in cottons, 1888-1915 394 

Oils, silks, and sugar 395 

372 



IV. Tariffs of the colonies individually— Con. 
Eritrea— Continued. 

Effects of the tariff differentials on 
Eritrean-Italian trade— Contd. 

C ott ons 395 

Effect of free entry to the Italian 

market 396 

Tables 7, 8, and 9.— Exports 

from Eritrea 398 

Somalia — 

Situation and commerce- 
Table 10.— Trade of Somalia 399 

Table 11. — Imports into Somalia. 400 
Table 12.— Exports from Somalia 400 
Tariff history— 

Under the administration of 

Zanzibar 400 

Under Italian companies 401 

Under the Italian Government . . 402 

Export duties, 1905 403 

Present tariff rates — 

Increase of differential rates in 

1911 404 

Differentials in export duties 405 

Preference to products of Eritrea. 405 
No preference in Italv to products 

of Somaha 405 

Tabular statement: SomaKan 

import duties 406 

Tabular statement: Somahan 

export duties 407 

Eft'ects of the differentials on Italian 

trade with Somalia 408 

Differentials of 1911 409 

Tabular statement: Somalian 
imports for the period 1908- 

1914 409 

Tabular statement: Value of 
certain cottons imported 

into Somaha 409 

Tabular statement: Somalian 

imports of foodstuffs 410 

Preferences in export duties 411 

The protectorates of Northern Somaliland 411 
Libia — 

Situation and commerce 413 

Table 13. — Imports into Cirenaica. 414 
Table 14.— Exports from Cirenaica 414 
Table 15. — Imports into Tripoli- 

tania 415 

Table 16.— Exports from Tripoli- 

tania 415 

Tariff history 415 

Rates of tbe'prcsent Libian tariff- 
Import duties 416 

Freelist -. 417 

Monopolies 418 

Prohibitions of importation 418 

Export duties 418 

Concealed differential in the applica- 
tion of the tariff 418 

Effects 419 

Preferences in Italv to products of 

Libia 420 

Appendix: 

The Dodecanese — 

Situation and commerce 420 

Tariff history. 421 

Bibliography. 422 



ITALY. 373 

I. Introduction. 

THE ITALIAN COLONIES. 

The Italian colonial empire is of comparatively recent origin and 
of comparatively limited extent. Acquired in its entirety since the 
formation of the Kingdom of Italy, it has a total area of 591,200 
square miles^ of which more than tWo-thirds was acquijred less than 
10 years ago/ and a total poj)ulation of ahout 1,700,000, The 
colonies are three in number: Eritrea, on the Red Sea; Somaliland, 
on the Indian Ocean; and Libia (formerly known as Tripolitania) ^ 
on the Mediterranean — all in Africa,^ 

The colony of Eritrea originated with the purchase of the port of 
Assab by an Italian steamship company in 1869, the year of the 
opening of the Suez Canal. The region was not occupied, however, 
until 1880. Two years later, in 1882, it was turned over to the 
Government.^ After many treaties with local chiefs,^ and with 
Abyssinia, Great Britain, and France, the colony attained by 1900 
approximately its-present boundaries.^ Two of the most im^portant 
events of the history of its development were the occupation of 
Massowa in 1885 and the issuing of the royal proclamation of January 
1, 1890, which designated the Italian possessions on the Red Sea the 
colony of Eritrea.® 

Italian Somaliland includes the colony proper- — Somalia Italiana 
Meridionale (Southern Italian Somaliland)^ — and to the north the 
Sultanates of Obbia and of the Mijertines (Protectorates), and the 
territory of Nogal.^ The colony proper is often called Benadir, but 
strictly speaking this name should be confined to the four ports,® 
which, when the rest of the country was taken under Italian sov- 
ereignty in 1889, were recognized as the property of the Sultan of 
Zanzibar. ^*^ These ports were leased by Italy in 1893 and purchased 
in 1905,^^ Agreements of 1891 and 1894 with Great Britain fixed 
the boundaries of the spheres of interest of the t¥7o countries to the 
south and north, respectively. ^^ In 1908 the inland boundary 
toward Abyssinia was determined and the country was opened to 

1 After 1911, by conquest from Tm"key. The figures for area and population do not include the territory 
ceded by France to round out the boundaries of Libia, and the proposed cession of Jubaland, south of 
Somalia. 

2 Italy "temporarily " occupied the Dodecanese Islands, off the coast of Asia Minor, in 1912. See Appen- 
dix to this chapter, 

3 Branialti, Attilio: Le Colonie degli italiani. Turin, 1897, Gorrini's Appendix, p. 532. Brusa, E.: 
Das Staatsrecht des Konigroichs Italien. Freiburg i. B., 1892, p. 507. Schanzer, Carlo: L'Acquisto della 
Colonie e 11 Diritto pubblico Italiano. Rome, 1912, pp. 61-68, 101-115. 

4 Miaistero delle Colonie. Manuale dilegislazione deiia Colonia Eritrea. Edited by Prof. Angiolo Mori, 
8 vol. Rmne, 1914-15. Cited hereafter as Erit. Man. This manual gives 14 protectorate agreements up 
to the end of 1890. 

B Erit. Man.; Vol. Ill, pp. 440, 570; Vol. IV, pp. 274, 387, 882, 963. 

6 Ibid., Vol. n, p. 5. 

J Law of Apr. 5, 1908, Art. I. 

8 Direzione centrale degli affari coloniali: Manuale di legislazione della Somalia Italiana. 3 vol. Roma 
1912-14. (Cited hereafter as Som. Man.) The introduction, pp. 5-17, defines the boundaries of these t-er- 
ritories. Cf, Schanzer: Op. cit., pp. 86-87. 

9 Tittoni, Tomasso: Italy's Foreign and Colonial Policy, 1914, p. 231. Gov. Giacomo de Martino- 
La Somalia Italiana nei Tie Anni del mio Governo, 1912, p. 92. The four ports were Brava, Merka, Moga- 
disho, and Warsheik. 

10 Som. Man., Vol. I, p. 30. Cateilani, S.: Les Possessions afrieaines et le Droit colonial de I'ltalie. 
(In the Revue de Droit International et de Legislation Comparee, Jan., 1885, p. 422.) Cateilani, Enrico.: 
L' Africa nuovo e 11 diritto pubblico afrieano. (In the Rivista Italiana de Sociologia, July-Oct. 1907, p. 523.) 

11 The lease was signed Aug. 12, 1892, and put in force provisionally July 16, 1893, and modified in 1896. 
Som. Man., Vol. II, pp. 5, 17, 48. British ana Foreign State Papers, vol. 82, p. 853; vol. 84, p. 630. For the 
earlier lease of the four ports to the Imperial British East Africa Co. and the transfer of theii- rights to Italy, 
see Hertslet, Map of Africa by Treaty, Vol. I, pp. 359, 362, 363; Vol. Ill, pp. 1086, 1091, 1094. 

12 Mar. 24, 1891, Som. Man., Vol. I, p. 31; May 5, 1894, Ibid. Vol. I, p. 3'3. 



374 



COLONIAL TARIFF POLICIES. 



trade. ^^ Up to 1910 only about one-sixth of the territory of Somalia 
had been occupied — a strip along the coast and inland as far as the 
Webi-Shebeli, and another strip running up the Juba River to 
Lugli.i^ Since 1910 most of the country has been occupied. 

Libia (better knov/n by the name Tripohtania, which the Italians 
reserve for one of its two provinces) was declared by Italy, after the 
outbreak of the Italian-Turkish War^^ to be under Italian sov- 
ereignty and v^as ceded to Italy by the treaty of Ouchy, which closed 
the war.'^ Subsequently local resistance to the Italians continued, 
in the form of guerrilla warfare, particularly in Cirenaica, where it 
has never entirely ceased." 

xirea and population. — The following table gives the area and 
population of the Italian colonies in Africa: 

Table 1. — Italian colonies in Africa: Area and population. 





Area 

(square 
miles). 


Apprcx- 

inaate 

coast 

line 

(miles). 


Estimated population. 


Colony. 


Total. 


Euro- 
pean. 


Average 

per 

square 

mile. 




4.5,800 

73, 800 

65, 600 

406, 000 


670 

450 

750 

1,150 


1300,000 

'1300,000 

150, 000 

1 1, 000, 000 


3,000 


6.5 


Somaliland: 
Somalia 2 


4 






2.3 


Libia (Tripolitania and Cirenaica) 


15, 000 


2 5 






Total . . 


591,200 




1,750,000 




3.0 











1 These figures are from the Annuario Statistico Italiano, 1916, p. -426. The population figures for Libia 
are there entered at 900,000 to 1,000,000. By the Turkish census of 1911 the population of Libia was returned 
at 523,000. 

2 The Italian form, Somalia, is here used for the colony of Southern Somaliland— Somalia Italiana Meridi- 
onale— as distinguished from the Protectorates of North Somaliland. 

Commercial importance. — ^The population of the Italian colonies 
is to a large extent pastoral and nomadic. Hides and skins are the 
principal exports of the colonies collectively, but other animal prod- 
ucts are of importance. Eritrea and Somalia export chiefly cattle 
hides with less quantities of goat and gazelle skins; but in Libia, 
sheep and goat skins have recently been of greater value than cattle 
hides, and camel hides are also of more importance than in the other 
colonies. Wool is the chief export of Libia. Butter is exported 
from all three colonies, and since the beginning of the war Eritrea has 
exported canned meats. 

Agriculture yields little surplus in any of the colonies, and few 
vegetable products are exported. Libia produces cereals and fruits — 
dates, figs, olives, lemons, oranges, etc. — but the foreign trade is 
limited to dates. Tripolitania exports henna and alf a (esparto grass) . 

13 Simultaneously, but by a separate convention, Italy gave Abyssinia 3,000,000 lire. British and For. 
eign State Papers, vol. 101, pp. 1000, 1001; vol. 102, p. 418. Vol. I of the Som. Man., pp. 27-66, gives the 
international acts relating to boimdaries, including the declaration by Italy of the taking possession of 
this territory, and the treaties of protectorates. Pages 69-147 give other international acts of interest; for 
instance, those of the conferences of Brussels, and the part of the final act of Berlin relating to the acquisi- 
tions of new territory, but omitting the free trade provisions. Or, see Piazza, Giuseppe. II Benadir. 
Rome, 1913. Chapter I, The Frontiers. 

i< See Marttno, Giacomo de: Op. cit., pp. 6, 7; and Marttno, G. de: La Somalia Nostra. Bergamo, 1913. 

16 Decree of Nov. 5, 1911. 

16 Signed Oct. 18, 1912. 

" Ministero delle Colonie, Relazione al Parlamento sulla Situazione politica, economica, ed amministra- 
tiva delle Colonie Italiane, 1918, p. 36. 



ITALY. 



375 



Diligent efforts have been made to obtain cotton from the colonies and 
small quantities are now produced in Somalia and Eritrea. Eritrea 
also exports considerable quantities of the seeds of the palma dum/^ 
and has at times exported wheat and linseed. Sponge fishing gave 
Tripolitania its greatest export before the war, and pearl and shell 
fishing, the chief industry of Eritrea before the Italian occupation, 
is still important. Manufacturing scarcely exists in the Italian 
colonies. The Somalis make a native cotton cloth, and the Provinces 
of Libia produce various textiles including carpets of wool, cotton, 
and silk, but the exportation is small. Salt production is the only 
industry of Eritrea. Mining is almost unknown in these colonies. 
There have been some unsuccessful ventures in Eritrea but the ex- 
port figures show no mineral production except potash, which began 
in 1915.^' 

The Italian colonies are small in population and little developed. 
The excess of their imports over their exports implies a substantial 
outlay in recent years for their development and defense. Table 2 
exhibits this excess of imports and also shows how comparatively un- 
important these colonies are commercially in their present state of 
development. The total of 76,296,000 lire for 1913 was equal to 
S15,725,000 ( at the prewar value of the lire) . In the same year, it may 
be said by way of comparison, the trade of Hawaii was $78, 635, 000. ^"^ 

Table 2. — Trade of the Italian colonies {excluding specie and imports and exports on 

Government account).^ 

[In thousands of lire.] 



Colony. 


1913 


1915 


1916 


1917 


Imports. 


Exports. 


Imports. 


Exports. 


Imports. 


Exports. 


Imports. 


Exports. 


Tripolitania 


26,299 

8,649 

16,617 

3 6, 961 


3,684 

1,173 

11,112 

3 1,801 


27, 068 

23,050 

22, 455 

5,835 


3,697 

1,615 

13, 386 

1,865 


29, 033 
29, 915 
20, 577 

7,286 


2,336 

1,978 

10, 716 

2,614 


32, 998 

27, 426 

2 20,577 

6,065 


2,971 

2,248 

2 10, 716 


Cirenaica . 


Eritrea 


Somalia 


3 878 






Total 


58,526 


17,770 


78, 408 


20, 563 


86, 811 


17,644 


87, 066 


19,813 







1 Ministero delle Colonie, Ufficio Economico, Bollettino di Informazioni, Vol. V, No. 1, Quadri Riassun- 
tivi del Movimento Commerciale delle Colonie Italiane durante gli anni 1912-1917. Rome, 1918. ("Anno 
V" is apparently an error; the series begins with 1913, and Anno V had already appeared on the volume 
for 1917. This is cited hereafter as Vol. VI.) 

2 For inclusion in the total, the figures for 1917 not being available, the figures for 1916 are repeated. 

3 Fiscal year July 1, 1913- June 30, 1914. 

II. Government of the Colonies and Making of Tariffs. 

THE CENTRAL GOVERNMENT. 

In the Italian system, although the constitution gives Parliament 
a legal omnipotence but little short of that which prevails in Great 
Britain,^- the executive exercises the dominant authority in the 
government of the colonies; the legislature does little more than 
vote the credits asked by the ministers, confirm the acts or adminis- 
trative arrangements already made by the executive, and define the 
powers to be thereafter exercised by the executive. And it must be 



18 A raw material for button manufacture. 

19 Exports in 1916, 1,029,000 lire. 



20 Imports $38,163,000, exports $43,472,000. 

21 Ogg, F. A.: Governments of Europe, 1913, p. 366. 



376 COLOICIAL TAETFF POLICIES. 

remembered that in a parliamentary government while in theory 
the action of the executive in all matters of importance must accord 
with the will of the legislatm^e, in practice the action of the legisla- 
ture in reference to foreign and colonial affairs is apt to be only 
another form of expression for the will of the executive. 

The constitutional lav^nrers of Italy do not agree as to the exact 
limits within which royal decrees m.ay be issued according to the 
StatutOj nor as to the exact power of the Crown in annexing terri- 
tory.^^ There, as in the United States, the question has been raised 
whether the constitution follows the flag, and the legal basis for the 
action of the executive, particularly as to the earlier phases of the 
colonial expansion, has been much disputed. ^^ The royal decrees 
are, of course, really the work of the ministers. Those governing 
the colonies were issued upon the responsibility of the minister of 
foreign affairs ^^ until a minister for the colonies was named, in 
1912,2^ This recognition of the increasing importance of the colonies 
was due directly to the acquisition of Libia. ^^ 

The minister of the colonies is assisted by a colonial council which 
must be consulted on important matters but which is purely advisory. 
This council consists of eleven members, of whom five hold their 
positions ex officio while six are appoint ed.^^ For advice in regard 
to Libia the minister has had since 1914 an administrative committee 
composed of six officials, and since 1917 a consultative committee, 
composed of five natives from. Tripolitania and iiTe from Cirenaica — 
selected by and from the provincial native advisory committees— 
and the directors general of the ministry of the colonies, together 
with not more than six others of special competence in colonial 
and Islamic affairs v,-ho are named by royal decree.^^ 

THE COLOXIAL G0VEE370RS AXD THEIE POWERS. 

The local governments in the Italian colonies v\'ere established 
under laws and decrees which were distinct for Eritrea, Somalia,^^ 
and Libia. These governments have been alike in general character; 
the greatest difference now is that provision was m^ade in 1919 for 
the introduction of representative bodies in Tripolitania and Cirenaica. 
The authority entrusted to the governors is considerable.^ The 
governors are appointed hy royal decree on the nomination of the 

22 Racioppi, F.. and Branelii. I.: Conmiento ailo Statute del Eemo. Turiii, 1909. 3 vols. Vol. I, 
pp. 292-296, 315-319. Arangiq-Rmz, Gaetano: Istiiuzioni di Diritto Costituzionale Italiano. Turm, 1913, 
pp. 4.S3-54. Mori, Angiolo: i Corpi Consulted deirAmministrazione Coloniale negli Statl d'Europe. 
Rome. 1912, pp. 402-403, and references cited there. • 

23 Mori: Od. eit.. Dp. 403-412. Schsnzer: Oo. cit., pp. 27-60. 

2^ Roval decree of Jan. 1, 1890. Law of Ma^T 24, 1903. arts. 7 and 12. 

25 Law of July 6. 1912, No. 749. Decree of Nov. 20, 1912. Erit. Man., Vol. IH, pp. 637, 703, 

26 Senate, Atti interni. Legislature 23, 1st sess., vol. 10, Nos. 883 and 883a. Vol. 3 of La Libia negii atti 
del Parlamento contains ail -the renorts and debates on this law, pn. 1365-1451. 

27 Law of May 24, 1903; decree of Nov. 23, 1912. Erit. Man., Vol, V, p. 5, Som. Man., Vol. Ill, p. 755. 
By decree of May 22, 1915, the provision that the colonial council must be consul t-ed was suspended for the 
duration of the war. Ministero delia Colonie, Relazione sulla Situazione, 1918, p. 36. 

23 Decree of Jan. 11, 1914, Ministero delle Colonie, Ordtaamento della Libia (Gennaio 1913-Gennaio 1914). 
Home, 1914, p. 43. R^lazione sulla Situazione. 1918, p. 163. 

2s The Italian designation " Somalia" is used throughout this report for the colony of Somalia Italiana 
Meridionale. This is a convenient meth<Dd of avoiding the repetition of the other terms which would be 
necessary to distinguish the colony from the protectomtes of Northern ItaUan Sqmaliland and from the 
British and French Somalilands.' The soeiling adopted for Eritrea, Libia, and Cirenaica also follows 
Italian usage. 

30 Eritrea: Law of Mav 24, 1903. and decrees of June 28, 1904, and Sept. 22. 1905. Lois Organiques des 
Colonies, Vol. in, pp. 399, 415, 434-500. Erit. Man., Vol. V, pp. 5, 464, 623. Somalia: La^ of Apr. 5, 1908, 
and decree of Oct. 5, 1911. Som. Man., Vol. Ill, pp. 5, 529. Schanzer: Op. cit., p. 204, Libia: Royal 
decree of Jan. 9, 1913. Ordinamento della Libia, p. 95. Brit, and For. Stat-e Papers, vol. 107, p. 925. 



ITALY. 377 

colonial minister after consultation with his colleagues. ^^ They are 
assisted in each case by an administrative council of four to six 
members, the majority of whom are officials. ^^ These councils are 
purely advisory, but the laws provide for their meeting and describe 
more or less specifically what matters shall be laid before them. 
By decrees of May 22, 1915, the requirement that the administrative 
councils of Eritrea and Somalia be consulted was suspended for the 
duration of the war. Recently there has been created for each of 
the Libian governors a native advisory committee. ^^ Each committee 
consists of 15 chiefs or notables appointed by the minister of the 
colonies on the nomination of the governor. They give advice on a 
wide range of subjects affecting the native population, and may 
initiate the study of such questions. 

The v/ide powers exercised by the governors are legislative as well 
as executive. In Eritrea and Somalia the laws invest the governor 
with all the power which the ministers of the King are able to dele- 
gate.^"* The Libian governors are supreme rulers over both civil 
and military affairs, but in practically all matters 'Hhe governor is 
under the direct and exclusive control of the minister of the colonies, 
and, in accordance with instructions received from him, directs the 
policy and administration of the colony, with the right to issue 
regulations of a local character, and to establish penalties for their 
infringement." ^^ This subordination to the colonial ministers is the 
most important limitation on the power of the governor, though, as 
will be seen below, in certain matters the powers of the governor, in 
Eritrea particularly, are closely defined by law. It is difficult to 
determine the extent of the freedom of action of the governor. A 
strong governor under favorable circumstances can doubtless obtain 
the decrees required for his policy. Governor de Martino, for instance, 
mentions that the striking tariff changes of 1911 which involved 
considerable sacrifice of revenue were worked out by his govern- 
ment which then obtained their embodiment in a royal decree. 

By a decree of June 1, 1919, important changes were made in the 
government of Tripolitania. The natives were recognized as citizens 
with the right of voting and of holding office.^'' The province is to 
have an elected parliament, with one representative for each 20,000 
inhabitants, to which certain officials are added ex officio, and others 
may be added ad hoc; but these official members may never exceed 
in number one-sixth of the number elected. Similar changes were 
introduced into the government of Cirenaica, hy a later decree. 
There the parliament is to have one representative for each 4,000 
of the population. The chief difference between the new governmen- 
tal organizations provided for Tripolitania and Cirenaica, respectively, 
is that in the latter territorial divisions are of less importance and 
tribal and commercial units are of greater importance.^^ It remains 
to be seen how much influence these parliaments will exercise. 

31 In the case of the Libian provinces, after consultation with the other ministers the colonial governors 
are nominated by the minister of the colonies in concert with the minister of war. Probably this is intended 
as a temporary provision, due to the continuance of military operations in Libia. 

32 These councils are made up as follows: In the Libian provinces three officials and two civilians, the 
latter nominated by the minister of the colonies; in Eritrea and Somalia, the heads of departments, to 
whom the governors may add others ad hoc. 

33 Decree of Mar. 11, 1917. Ministero delle Colonie, Relazione sulla Situazione, 1918, p. 163. 

3* Somalia, art. 8 of the law of Apr. 5, 1908; Eritrea, administrative ordinance of Sept. 22, 1905. 

35 Brit, and For. State Papers, vol. 107, p. 925. 

36 By an ItaUan law of June 13, 1912, the natives of Libia might be recognized as Italian citizens in so 
far as they met certain conditions, including abandonment of their tribal organizations. 

37 SeeL'AfriquerranQaise,1919,pp.224,311; 1920, p. 43; 1921, p. 131, and sup. p. 47, 



378 COLO>TIAL TAKIFF POLICIES. 

TARIFF MAKING. 

The laws for the government of Eritrea and Somalia contain 
specific provisions in respect to tariff making; those for the Libian 
provinces do not, and, in fact, after the first decrees by the military 
commander, the Libian tariff regulations have been promulgated 
almost exclusively by royal or ministerial decrees. The outbreak 
of the war, however, was followed immediately by the delegation 
to the governors of the power to prohibit the exportation of goods 
of any sort from these provinces.^ ^ Later the governors were 
authorized to permit the importation of arms, upon conditions, and 
to suspend or regulate (with the approval of the minister of the colo- 
nies) the exportation of quadrupeds.^^ 

For Somalia, the law of 1908 provided that taxes and customs 
should be fixed by royal decree, but by another article of the same 
law the delegation of this power to the governor was authorized, 
while a further. article invested the governor with all the power which 
the ministers have authority to delegate. The governor was em- 
powered to vary the export duties according to the necessities of 
commerce, but he was required to report to Rome immediately 
whenever he acted under these authorizations. In the following 
year the restriction was imposed that before modifying the export 
duties he must obtain the sanction of the Government of the King.^° 
In 1910 the governor was authorized to fix duties on imports from 
British East Africa entering via the Juba Eiver for consumption in 
the colony.^^ It does not appear that the governor ever exercised 
either of these powers, and both the export duties and the import 
duties which are in force to-day were fixed by royal decree.*^ 

In Eritrea, according to the law of 1903, the tariff is to be fixed 
by royal decrees issued on the proposal of the governor after consul- 
tation with the colonial council. However, three rather important 
powers are delegated to the governor : To increase to a maximum of 50 
per cent ad valorem duties which protect local agriculture; to reduce 
to as low as 8 per cent ad valorem the duty on any goods on which 
the rates are higher; and, when special circumstances require, to 
grant exemptions. The governor may also prohibit the importation 
or exportation of goods, and regulate their transshipment, or order 
their destruction when the public safety or the interests of agricul- 
ture and pasturage demand it, but this power is to be exercised only 
by a decree explaining the necessity, and such decrees are to be re- 
ferred immediately to Rome. Finally, the Governor may impose 
on products of the Sudan a duty of not more than 5 per cent.^^ The 

38 Royal deree of Aug. 2, 1914. This power was forthwith exercised by the governor of Tripolitania in 
the decree of Aug. 14, forbidding the exportation from Tripolitania of those articles whose export from 
Italy had been forbidden, and adding to this list. Ministero delle Finanze; Direzione Generale delle Ga- 
belle. BoUettino di legislazione e statistica doganale e commerciale, 1914, pp. 533, 966. Cited hereafter 
as Bol. dilegis. 

39 Ministerial decrees of Aug. 1 and Pec. 10, 1915. 

« Roval decree June 3, 1909. Som. Man; Vol. Ill, p. 107. 

« Royal decree, Dec. 18, 1910. No. 949. Som. Man; Vol. Ill, p. 324. 

42 Decree of Aug. 12, 1911. The Manuale di legislazione of Somalia gives only two gubernatorial decrees 
Issued between the time of the passage of the law of 1908 and the end of 1912 affecting tariff rates; that of 
June 20, 1909 (Som. Man; Vol. Ill, p. 113), reducing the basis of valuation for certain goods imported; and 
that of Mar. 6, 1911, specif>'ing the conditions under which plants and seeds might be imported. (Som. 
Man; Vol. Ill, p. 334.) But the chronological index refers to six others, in addition to the decrees fixing 
customs valuations, which are not given. One of the six concerned the importation of Italian tobacco, 
one related to export duties, and the other four granted exemptions from customs duty, in one case to a cer- 
tain man bv name. 

« Erit. Man; Vol. VI, p. 8-55. This enumeration is from the collection of acts of public authority, pre- 
ceding the law of 1903 and still in force on Dec. 30, 1909. Some of these powers date from the royal decree 
of Dec. 10, 1893, and others from those of Feb. 2 and Oct. 18, 1899. 



ITALY. 379 

power to reduce duties has been exercised in regard to the duties 
on cottons, silks, woolens, and sugar, and for all imports at the port 
of Assab; and the governor has granted exemption from import 
duty to Maria Theresa thalers, and Yemen coffee, and exemption 
from export duty to linseed and neukseed. The other powers men- 
tioned seem not to have been exercised. 

III. Italian Colonial Tariff Policy and System. 

TREATY limitations. 

FREE TRADE IN THE CONGO BASIN. 

Tlie free-trade zone which was established by the conference of 
Berlin in 1884-85, and which is usually known as the Conventional 
Basin of the Congo, included considerable territory not within the 
watershed of that river and notably all the territory eastward to 
the Indian Ocean between 5° north and the mouth of the Zambesi. 
The general act of the conference established the principle that the open 
door should be maintained in aU acquisitions of territory which the 
signatory powers might thereafter ^^ make within the limits defined. 
These limits clearly include Somalia, for the whole coast and all 
but a corner of the interior — a corner perhaps not yet occupied — He 
south of 5° north. The Italian Government officially recognized 
the applicability of the treaty to Somalia.*^ 

By the general act of the conference of Berlin, commercial discrimi- 
nations and differentials of every sort were carefully forbidden; 
navigation fees were limited to a reimbursement of the costs of im- 
provements in aid of commerce, and all import duties were forbidden.*^ 
The last-named regulation proved too sweeping, and in 1890 by an 
additional act at the conference of Brussels, this provision was changed 
to aUow import duties not greater than 10 per cent ad valorem.*^ 

The treaties of 1885 and 1890 made provision for the reconsidera- 
tion in 1905 of the rate of import duty to be permitted in the free- 
trade zone. This reconsideration did not take place, so that accord- 
ing to the treaty of 1890 the powers were to ''return to the condi- 
tions provided for by Article IV of the general act of Berlin, retain- 
ing the power of imposing duties up to a maximum of 10 per cent 
upon goods imported." Article IV of the treaty of 1885 clearly 
restricts the prospective revision to the single feature of the rate of 

«* The delegates at the conference recorded in one of the protocols their agreement that the principle 
should apply only to future acquisitions. By this, as well as by a more specific reservation, Portuguese 
Mozambique was excluded from the operation of the free-trade provisions of the act. (Ministere des Af- 
faires Etrangeres. Documents Diplomatiques: Aflaires du Congo et de PAfrique Occidentale. Paris, 
1885, p. 101.) This protocolmay be found in English in S. Ex. Doc. No. 196, 49th Cong., 1st sess.; but the 
translation is frequently at fault. Forinstance, the statement of Herr Busch, the German undersecretary 
of state, "I'engagement des puissances ne porte que sur les territoires qu'elles viendraient a occuper a 
I'avenir," is rendered, "the engagement of the powers did not bear upon the territories which they might 
come to occupy in the future," while a correct translation requires the rendering bears only or applies only 
instead of did not bear. It may be noted that this statement in regard to future acquisitions of territory 
was made in the course of a discussion of the first article— the article which lays down the principle of free 
trade— and referred particularly to the proposal (afterwards adopted) to extend the free-trade principle 
to the zone to the east. 

*5 See the Anglo- German-Italian treaty of 1890 (discussed below under the tariff history of Somalia), 
limiting duties in the " Eastern zone of the Conventional Basin of the Congo." See also the correspondence 
in the Green Book, La Somalia Italiana, 1885-1895, pp. 254-260. 

*« For the text of these provisions see the section on the tariff policy of the Congo Free State, p. 85. 

" Except on spirituous liquors. In 1910 a further exception was made of arms and munitions. 

185766''— 22 25 



880 C0L05TIAL TAETFF POLICIES. 

import duty; tlie treaty of 1890 is eqiialh^ clear and in two treaties *^ 
subsidiary to this latter, the United States, Great Britain, and the 
Congo Free State explicitly set forth the continuance of the obli- 
gation to maintain the open door so that none might make the mistake 
of thinking that this principle of equal opportunity had been revised 
or was open to revision. In view of the clearness with which this 
point is set forth in the treaties, it is hard to understand hov/ the 
Italian Government came to introduce differential duties shortly 
after the territory was '' redeemed" from the administering company 
and governed directly from Rome. The introduction of duties higher 
than 10 per cent on tobacco and on goods not enumerated in the 
short tariff schedule is equally inconsistent with the provisions of 
the treaty as amended in 1890. 

RESTRICTION ON SALE OF FIREARMS AND ALCOHOL. 

The Brussels conference of 1890 laid down certain definite pro- 
visions and additional suggestions, restricting the sale of arms and 
alcohol to the natives. The provisions applied to the whole of Africa 
between 22° south and 20° north, limits w^hich include Somaliiand and 
Eritrea and some of the southern oases of Libia. Most important, so 
far as the tariff is concerned, vf as the attempt to check the sale of alco- 
hol by imposing duties on its importation. These duties v/ere fixed 
at a minimum of 15 francs per hectoliter (26,42 gallons) on alcohol 
at 50° strength, a figure which was raised at the conference of 1899 
to 70 francs, and again at that of 1906 to 100 francs. Proportion- 
ately higher rates applied to greater strengths, according to the 
treaties made at these two later conferences. The third of the three 
treaties was ratified by the various powers, by France last — on 
November 2, 1907. It vvas to be in force for 10 years, and its revi- 
sion might be moved after the eighth year. Eritrea by this treaty 
was allowed to retain the rate of 70 francs, ^'the excess being in a 
general and continuous way represented by the aggregate of other 
duties existing in that colony." *^ 

In Eritrea the regulations restricting the importation of arms were 
decreed by the governor on December 23, 1891, ^^ and the duty on 
alcohol was imposed by royal decree of December 8, 1892.°^ By 
this decree the duty of i5 francs required by the Brussels conference 
was made additional to the existing duty, and on each degree above 
50° a further duty was levied at one-haK of the original rate. This 
did not apply to European liqueurs other than cognac, absinthe, and 
mastic, in bottles and selling for not less than 3 lire per bottle; 
nor was this duty to be levied as an excise on the local production. 
These rates were later raised to comply with the requirements of 
the international conferences of 1899 and 1906. 

In Somalia these acts were applied, apparently in 1894, to the 
four ports leased from Zanzibar, and during the spring of 1895, to 

43 Treaty between the United States and the Congo Free State, Jan. 24, 1891. Malloy, Wm. M.: Treaties 
Conventions, International Acts, Protocols, and agreements between the United States of America and 
other powers. Washington, 1910, 2 vols., Bol. I, p. 331. Articles X and XI of this treaty are quoted in 
the section on the colonial tariff policy of the Congo State, p. SS. Treaty between the United States and 
Great Britain in regard to the duties of Zanzibar, May 31, 1902. Malloy, Vol. I, p. 784. 

« Ivlalloy, Treaties, Conventions, etc., Vol. 11, p. 2205, Art. I. 

60 Brit, and For. State Papers, vol. 84, p. 419. 

51 Erit. Man., Vol. II, p. 548. Brit, and For. State Papers, vol. 84, p. 420 (in French). 



ITALY. 381 

the rest of Somalia. ^^ From the regulations it appears that custom- 
houses were established at the four leased ports and at Giumbo, 
Langione, Torre, Dgelleb (Gelib), Mruti, and Itala. 

The acts of Berlin and Brussels were explained to the Sultans of 
Obbia and of the Mijertines, and by letters of November 22, 1894, 
April 11, 1895, and of November 16, 1894, these rulers not only 
affirmed their adherence to those acts, but, stating that the religion 
of their peoples forbade the use of alcohol, they prohibited absolutely 
the importation of alcohol and also of arms into their dominions.^' 
The Sultan of the Mijertines affirmed, in a letter dated April 7, 1895, 
that these provisions were being fully executed in his territories. 
The accord of March 5, 1905, permitting the Mullah to occupy the 
territory between Has Garad and Ras Gabbe (i. e., Nogal), forbids 
that ruler to permit the slave trade or to trade in arms and amm.u- 
nition, but makes no mention of alcohol. ^^ 

In a treaty of Decenaber 13, 1906, France, Great Britain, and Italy 
agreed that no arms should be imported into Abyssinia through 
French, British, or Italian Somaliland or Eritrea, except on special 
request of the Negus or King, giving the names of those authorized 
to receive them.^^ 

The action of the Italian Government in signing this treaty and in 
adhering to the acts of Berlin and Brussels was attacked in the Cham- 
ber on February 15, 1908. A deputy, Sig. Martini, stated ^^ that 
Abyssinia was flooded by alcohol which entered by way of Djibuti, 
French Somaliland, so that the commerce of Eritrea had been injured 
to the benefit of Djibuti, because Italy had, and France had not, 
adhered to the acts of Brussels. ^^ He stated further that it was a 
mistake to free the slaves who were brought by caravan into Italian 
territory; that this simply cau^sed the caravans to go to other places. 
Therefore, no benefit accrued to the slaves, who remained slaves, 
while the commerce of the colony was diverted to other countries 
less zealous in their suppression of slavery. A report of a committee 
of the Italian Chamber of Deputies in 1912 ascribes the large de- 
creases in the trade of Somalia in 1903-4 and 1904-5 to discontent 
due to the action taken against slavery.^^ 

COMMERCIAL TREATIES WITH INDIVIDUAL COUNTRIES. 

The various commercial treaties between Italy and other single 
countries contain almost no references to the colonies. The most- 
favored-nation clause does not apply, ordinarily, to special relations 
between a country and its colonies unless it is specifically provided 
that it shall, and the form usually employed in the Italian treaties 
could in no case be so interpreted, as it specifies ^'favors granted to 
third powers," or, as in the treaty with Japan, '^duties the lowest 
applied to similar articles of all other foreign origins." ^^ The treaty 

52 Italian Green Book, La Somaiia Italiana, 1885-1895, Nos. 108, 111, 115, regulations of Mar. 15, 1895. 
Extracts from the regulations are given in Brit, and For. State Papers, vol. 87, p. 932. 

53 These declarations are given in French in the Brit, and For. State Papers, vol. 87, pp. 930-931, and in 
Italian and English in the Green Book just cited, No. 114, pp. 269-274. 

siSom. Man., Vol. I, p. 60. 

55 Brit, and For. State Papers, vol. 99, p. 252. 

56 Quoted by Papafava, Francesco: Dieci Anni de Vita Italiana, 1913, p. 691. 

57 His statement that France had not ratified this treaty is incorrect. 
53 Relazione della Giunta Generale del Bilancio, 1912, p. 66. 

59 Treaties with Austria-Hungary, Feb. 11, 1906, art. 7, Brit, and For. State Papers, vol. 99, p. 556. 
Treaty with Japan, Nov. 25, 1912, art. 5; Ibid., vol. 106, p. 1080. 



382 COLONIAL TARIFF POLICIES. 

with Servia, of January 1, 1907,^^ provided that special favors granted 
within a customs union are not to be considered incompatible with 
most-favored-nation obligations. This might perhaps be construed 
as applicable to Italy's relation with her colonies. 

Two of Italy's commercial agreements do refer specifically to the 
colonies. The treaty of July 14, 1906, with Egypt ®^ was applicable 
to the Italian colonies also, except Eritrea; and the exchange of 
notes of May 9, 1911, with Portugal provided that Italian and Italian 
colonial goods should enter Portugal, including Madeira, Porto Santo, 
and the Azores, on the most-favored-nation terms, but should not be 
entitled to such treatment in the Portuguese colonies. Likewise Por- 
tuguese and Portuguese colonial goods were not entitled to most- 
favored-nation treatment in the Italian colonies.®^ 

It should be observed, how^ever, that many of Italy's commercial 
treaties were due to expire in 1917, and that the remaining treaties 
guaranteeing most-favored-nation treatment have been recently de- 
nounced. 

The one treaty which Italy has negotiated on behalf of a single 
colony — the customs convention in regard to trade between Eritrea 
and the Anglo-Egyptian Sudan — will be mentioned in connection 
with the Eritrean tariff. 

TARIFF POLICY. 

FEW PREFERENCES IN ITALY TO ITALIAN COLONIAL PRODUCTS. 

The Italians have granted only on a very small scale preferential 
tariff treatment in Italy for imports from their colonies. This has 
been due to the strong protectionist feeling in Itaty; but it should 
be remembered that many of the colonial exports, notably raw hides 
and skins, enter Italy duty free, from all sources, and that the colo- 
nial product could be granted a tariff favor only by the imposition 
of a duty on products from foreign sources. Until 1904 no tariff 
concessions were made by Italy in favor of the colonies. In that 
year free entry was granted to a restricted list of Eritrean products, 
including a limited quantity of wheat. In 1915, shortly before Italy 
entered the World War, a new rate with a small preference was 
granted to Eritrean cattle. Durmg the war, many restrictions and 
prohibitions were imposed on colonial trade, but the tariff situation 
remained practically unchanged. Free entry was granted in Feb- 
ruary, 1917, to tanned hides and skins from all three colonies, and on 
February 8, 1918, to certain by-products of meat from Eritrea — in 
both cases only for the duration of the war. The Government was 
empowered to extend by decree the same favors to products of So-" 
malia as those granted to Eritrean products, but it seems to have 
taken no action under this power. The tariff of Somaiiland grants 
special rates to four products of Eritrea; but this is the only case of 
intercolonial preferences which appears in the Italian system. 

OBJECTS sought: CHIEFLY LOCAL INTEREST AND CONSERVATION. 

While the Italians have sought to promote their trade in the 
colonies and have employed preferences as a means to that end, their 

^ Brit, and For. State Papers, vol. 101, p. 401. Ratifications were exchanged Mar. 17, 1907. 
61 lb., vol. 100, p. 867, art. 26. 
e2Ib., vol. 105, p. 675. 



ITALY. 383 

trade does not appear to have been their foremost concern. In 
Eritrea, when the imposition of rates of 15 and 20 per cent upon 
goods of foreign origin®^ failed to bring Itahan goods onto the market, 
the rates were reduced in the interest of the colonial consumer and 
for the promotion of the transit trade. The development of the 
colonies was apparently considered more important than the afford- 
ing of particular advantages to Italian trade. Fiscal considerations, 
in Somalia certainly and in Libia apparently, account for failure to 
grant larger preferences to Italian trade with those colonies. In the 
import and export duties of Somalia there is evidence of the intention 
to afford a certain amount of protection to local industry: a duty of 
10 per cent is levied on imports whether foreign or Italian of tanned 
skins; leather, manufactures of wood, meats, and liunber; and duties 
of 10 per cent on exports of lumber, raw hides, and skins, but only 1 
per cent on manufacture^ of wood and on leather. The relatively 
nigh duties on animals and the prohibition on the exportation of 
camels are probably to be classed as conservation. The Eritrean 
duties on the exportation of wild animals were in conformity with con- 
clusions adopted in a European conference and treaty draft on the 
preservation of the game of Africa. 

CERTAIN PREFERENCES IN THE COLONIES TO ITALIAN TRADE. 

Ojpen 'preferences, — Exemption from the import duties of Massowa 
was granted to Italian goods in 1885. Smaller tariff favors have 
been granted in Somalia since 1905 (the beginning of the direct ad- 
ministration by Italy) and in Libia since 1914. In Eritrea the policy 
seems to have been to foster Italian trade as much as that could be 
done without raising the duties on foreign goods above 10 or 15 per 
cent, and the duties have remained almost unchanged since 1900. 
In Somalia, on the other hand, though none of the ad valorem rates 
have been raised above 15 per cent, the preferences have been in- 
creased several times and have been introduced into the export 
duties as well as import duties. 

Concealed preference in Lihia. — In Libia open tariff preferences 
were granted on some of the most important articles of trade in 1914, 
but even previous to that date a preference amounting to perhaps 50 
per cent of the duty had been given by the process of undervaluing 
Italian merchandise by about that amount.^^ 

CONCLUSIONS AS TO PREFERENCES. 

While preferences to colonial products on importation into Italy 
have been very slight, Italy is consistently committed to the policy 
of preference for her own products in the colonial markets. The 
extent of this preference is limited at the present time by the need 
of revenue and by the policy of not raising colonial duties beyond 
certain moderate rates ; the preferences accordingly are not so great 
as in the colonies of many other countries and, though the presence 
of other factors and the defects in the available statistics suggest 
caution in drawing conclusions, the effects seem to have been small 
outside of the trade in cottons — but cottons are the chief articles 
of import, at least in Eritrea and Somalia. 

^3 In the nineties, 
w See p. 418. 



384 COI^OXIAL TAEIFF POLICIES. 

COLOXIAL TAPvTFF SYSTEM. 
CHARACTER OF SCHEDULES. 

The Italian colonial tari^s are characterized by low but increasing 
rates of import duty, few and small export duties, short free lists, 
and a tendency toward increasingly preferential treatment of trade 
with Italy. 

Import duties and free lists. — The schedules of import duties in the 
three African colonies are aU short and simple: most kinds of non- 
Itahan goods pay in Eritrea 8 per cent, in Somalia 10 or 15 per cent, 
and in Libia 11 per cent ad valorem. Cotton goods however con- 
stitute much the most important of the articles of import, and on 
these the rate in Eritrea and Somalia is 10 per cent: while in Libia, 
in addition to 8 per cent ad valorem, there are specific surtaxes 
chiefly on foreign cottons. Except on tobacco and beverages, all the 
duties of Somalia are ad valorem: Eritrea has specific rates also on 
cereals and watches; while Libia has specific duties on playing cards, 
and mixed specific and ad valorem, rates on cotton and woolen yarns 
and textiles, on sugar and on Vrine — the specific duties falling most 
heavily or entirely on merchandise of non-Italian origin and con- 
stituting the differential part of the duty. Libia has a free list 
which is of some importance to the agricultural interests, but the 
other two colonies admit practically nothing free under the general 
laws, aside fromjfcravelers' baggage, military equipment, government 
supplies, etc. However, special laws and decrees grant concessions 
of land in Somalia and exempt from duty the imports of equipment 
for these concessions. It is not specified that such imports — 
machinery, etc. — must be of Italian origin, but there is little doubt 
that they usually are. 

Export and statistical duties. — In the fiscal system of the Italian 
colonies, little use is made of export duties. The chief exception is 
that hides from Somaha pay a duty of 10 per cent ad valorem if 
destined to foreign countries or of one-haK that amount if their 
destination is Italy. Aside from this, since the reductions made in 
the Somalian rates in 1911, the exports of Somaha and Eritrea pay 
but 1 per cent. In Eritrea this 1 per cent is termed a statistical duty 
and is levied on all goods vrhich cross the customs line free of other 
duties, i. e., on all exports to or imports from Italy and on all goods 
on the free list. The Libian provinces have a few export duties of 
1 to 5 per cent. 

lY. Tariffs of the Colonfes IxDivrDUALLY. 

[Tliose not wishing to follow the detailed discussion of Italian taiiff policy as apphed in the separate 
Italian colonies should pass over pp. 3S4-422, inclusive. They were prepared for detailed study, not 
for the general reader. The effects of the tariff differentials are discussed en pp. 393, 40S, and 41S.J 

ERITREA. 

SITUATION AXD COMMERCE. 

The colony of Eritrea lies between the Ked Sea and Abyssinia. 
Its area is 45,800 square miles and its population about 300,000, 
Cattle raising is the chief occupation, though cereals and cotton are 
produced and palm and other forest products are collected. Pearl 
fishing is the second industry of the country, the value of the pearls 



ITALY. 



385 



being estimated at some 4,000,000 lire annually, though, as will be 
seen from Table 3, only a small fraction passes through the custom- 
house. Mother-of-pearl and other shells are also of commercial 
importance, especially the trocas shell. This shell also largely escapes 
the Eritrean customs, being taken to Djibuti for direct shipment 
to its market, Havre. The salt pans which dated back to the 
Egyptian occupations were reequipped and exportation of salt was 
resumed in 1909.^^ Cereals are grown on the plateau in the interior 
but not in quantities sufficient for the local consumption. Since 
1910 much the most important vegetable export has been a kind of 
vegetable ivory, the seed of a species of palm. 

The chief articles of commerce and the share of Italy in the trade 
are shown, for the last year before the war, in Table 3. 



Tabl^^.— Trade of Eritrea, 1913 a 
[In thousands of lire.] 



Imports. 


Total. 


From 
Italy. 


Cotton goods 


5,323 
2,252 

852 
761 
593 
534 
482 
449 
412 
306 
273 
252 
237 
235 
227 
132 
109 
3,187 


4,519 


Dura 




Iron and steel 


178 


Wines . . 


743 


Sugar 




Utensils, machinery and parts of . - . 


353 


Manufactures of wood. . , 


453 


Cotton yarn . . 


3^.1 


Wheat flour. 


323 


Rice 


9 


Cement . . 


273 


Spirits, pure and sweetened 


38 




227 


Lumber 


223 


Coffee and coffee husks. 




Tobacco, raw 




Soap . . . 


102 


Ail other articles ^ 


1,738 








Total 


16,617 


c9,557 







Exports. 


Total. 


To Italy. 


Dried hides and skins 


5, 198 

1,434 

1,318 

1,020 

425 

384 

325 

252 

233 

142 

127 

252 


2,331 

1,203 


Seeds of the palma dum 


Mother-of-pearl 


139 


Sea salt 




Butter 




Pearls 




Trocasshells 




Wax 




Linseed... 


168 


Raw cotton . . ... 


142 


Gujus. 


126 


Ail other articles d. _ _ 


53 








Total 


11,112 


«4,161 








Total trade 


27, 729 


/ 13, 718 







a Bol. dilegis., 1914, Pt. 11, pp. 268-283. The figures are, strictly, those of the maritime trade of Massowa, 
excluding the transit trade in goods both imported and reexported by sea. The value of this transit trade 
was 2,896,000 hre in 1913. 

b Excluding specie to the value of 3,837,000. None of this came from Italy. 

c Or 57.5 percent. 

d Excluding specie to the value of 478,000. None of this was destined icr Italy. 

e Or 37.4 percent. 

/ Or 49.7 per cent. 



55 See articles on the trade 
III, p. 239. 



nd products of Eritrea, in the Bollettino di Informazioni, Vol. I, p. 39; VoL 



386 



COLONIAL TAKIFF POLICIES. 



The port of Massowa is a transshipment center for merchandise 
destined chiefly for Ai'abia. The value of the trade involved is 
about 5,000,000 lire annually. 

The war had less effect on the value of the commerce of Eritrea than 
on that of a good many other colonies. The change of greatest 
importance was the increase in the proportion of the exports which 
went to Italy. This increase appeared particularly in connection 
with the item hides. In 1915, the exports of hides, a product which 
had increased greatly in value, accounted for more than two-thirds 
in the value of the total exports; and of the quantity of hides ex- 
ported Italy took an increased share. Canned meats, exported to 
the value of 989,000 lire in 1915 and 765,000 lire in 1916, went 
entirely to Italy. The war affected the import trade less than the 
export trade, so far as values Vv^ere concerned. The decreased share 
of Italy in this trade was due chiefly to increased imports of cereals 
and other vegetable foodstuffs from other sources, Italy maintained 
her place in the cotton trade until 1916. In metals and metal manu- 
factures she increased her share from less than one-half in 1912 to 
1,123,000 out of 1,234,000 lu-e in 1916. 

Tables 4 and 5 show the total trade, excluding specie, of Eritrea, 
together with the Italian share of this trade and the amount of 
certain important items of import and export in the latest 3^ears for 
which the figures are available. The value of the cottons imported 
exceeded that of the foodstuffs tabulated but shows much less im- 
portant variations. 

Table 4. — Imports into Eritrea^ 
[ In thousands of lire . ] 





Total. 


From 
Italy. 


Per cent 
from 

Italy. 


Cereals, flours, vegetable 
foodstuffs. 


Year. 


Total. 


From 

Italy. 


Per cent 
from 
Italy. 


1912 


15,914 
16,617 
22,773 
22,455 
20,577 


9,932 
9,557 
13,212 
14,118 
11,397 


62 
58 
58 
63 
55 


1,745 
3,416 
6.162 
4,246 
5,462 


301 
487 
1,421 
481 
763 


17 


1913 


14 


1914 


26 


1915 


11 


1916 


14 







Excluding specie. Ministero delle Colonic, Bollettino di Informazioni, Vol. VI, No. 1. 
Table 5. — Exports from Eritrea.'^ 
[In thousands of lire.] 





Total. 


To 

Italy. 


Per cent 

to 

Italy. 


Hides and skins. 


Year. 


Total. 


To 

Italy. 


Per cent 

to 

Italy. 


1912 


7,998 
11,112 

9,271 
13,386 
10,716 


3,039 
4,161 
4,457 
10,079 
7.198 


38 1.290 


420 
2,331 
3,108 

7.796 
4.094 


33 


1913 


37 
48 
75 
67 


5,207 
5,622 
9,241 
5,410 


45 


1914 


55 


1915 


84 


1916 


76 











Excluding specie. Ministero delle Colonie, Bollettino di Informazioni, Vol. VI, No. I. 



ITALY. . 387 

TARIFF HISTORY. 

Assah and Massowa. — The port of Assab had been purchased in 1869 
but it was not occupied until 1880. By a ministerial ordinance of 
December 24, 1880, it was declared a free port without customs 
duties, anchorage, or lighthouse fees. The residents, including 
natives, were to pay neither direct nor indirect taxes; but it was 
provided that all these exemptions might be revoked if conditions 
changed.^^ In 1899 the Eritrean customs line was extended to 
include Assab, and a customhouse was established there, but later in 
the same year the governor reduced to 8 per cent all duties that 
were above that rate.^^ 

Massowa, the chief port of Eritrea, was occupied by the Italians 
on February 5, 1885. On June 3 of the preceding year the British 
admiral, Sir W. Hewett/ had negotiated, and on behalf of Great 
Britain had signed, the treaty to which the Khedive of Egypt and 
the Negus of Abyssinia were the principal parties. ^^ This treaty 
provided for free transit of goods to and from Abyssinia through 
Massowa. The Italian consul on mission, Sig. Maissa, reported in 
March, 1885, that this provision for free transit had not been observed 
by the Egyptian administration. Presumably therefore that admin- 
istration had been collecting duties at the uniform rate of 8 per cent 
ad valorem to which the import duties of Egypt are limited by treaty.®* 
Prof. Betocchi states that the Italians continued the ^'vexatious 
system of the Egyptians, making it worse.'' ^^ 

The earliest Italian tariff of Eritrea is not available, but presum- 
ably the 8 per cent rate was continued in force for a time ; at least a 
table of valuations for the collection of an ad valorem duty was pro- 
claimed by royal decree of November 2, 1885.^^ 

Exemption of Italian goods. — The first decree relating to the tariff 
regime of Massowa, November 2, 1885, announced the exemption 
from duties of all Italian goods shipped from Italian ports with the 
proper formalities.'^^ Further, these goods were to receive the same 
drawbacks in Italy as if they were exported to foreign countries.'^^ 
This policy has been consistently maintained, with the exceptions 
that since 1893 goods exempt from import or export duty have been 
subject to a statistical duty whose rate was fixed in 1899 at 1 per cent,'^'* 

66 Erit. Man., Vol. I, p. 1, art. 17. 

«? Royal decree of Feb. 2, 1899, art. 26; governor's decrees May 31, and Aug. 21, 1899. Any goods wliich 
werereexportedfromAssabtootherportsof Eritrea were to pay in the latter the difference in the rates of 
duty in the two places. Erit. Man., Vol. IV, pp. 312, 386, 505. By royal decree of May 16, 1900, Eritrean 
taxes of all sorts were extended to Assab. lb., Vol. TV, p. 608. 

68 Italian Green Book, Massaua. Camera dei Deputati, 16th legislature, 2d sess. (1888), Atti Parlamen- 
tari, Doc. XVIII, p. 28. This provision for free transit is put first; probably of more pressing importance 
were arts. 2 and 3 v/hich provided for the evacuation of Kassala and other territory by the forces of the 
Khedive in favor of the Negus, and that the Negus should facilitate the return of these troops through 
Massowa. 

69 lb., p. 23, letter of Mar. 20. The consul recommended that, as heir to this obligation, Italy should make 
a new agreement with the Negus and should impose duties. Italy, however, refused to recognize any suc- 
cession in regard to the capitulations, and the view expressed by the consul in regard to the obligation under 
this treaty was probably not shared by his Government. 

™ Betocchi, Carlo. Sulla politica commereiale Italiana nel porto di Massaua. Atti del Congresso Colo- 
nlale Italiano in Asmara, 1905, p. 292. 

71 It is not likely that the Eritrean Manuale would omit a general tariff decree, while the continuation 
of the collection of the old duty during the organization of the new administration is probable. The tables 
of valuation are omitted from the Manuale, regularly, but a decree of Oct. 14, 1897, refers to a table of valua- 
tion of Nov. 2, 1885. Specific duties on tobacco were imposed by decree of Dec. 10, 1885. Erit., Man., 
Vol. I, p. 151. 

72 The formalities are laid down in detail in the ministerial circular of May 3, 1886. Erit. Man., Vol. I, 
p. 183. 

" Circular of Sept. 4, 1886, lb., Vol. I, p. 321; Erit. Man., Vol. I, p. 183. 

1* Decree of Feb. 2, 1899. lb.. Vol. IV, p. 309. Raccolta, Dec. 30, 1909. lb., Vol. VI, p. 848. By the 
decree of Dec. 10, 1893, the rate had been 25 centesimi ($0.05) on each package or each quintal (220.4 pounds) 
of goods in packages exceeding that weight or in bulk with exceptions. Erit. Man., Vol. II, p. 836. 



388 , COLONIAL TAKIFF POLICIES. 

and that since 1892 Italian liquors have been dutiable. The duties 
prescribed in the Brussels conventions were imposed as surtaxes on 
both Italian and foreign liquors (except on some which already paid 
a higher rate than the minimuni prescribed) and the foreign liquors 
continued to pay the 15 per cent ad valorem prescribed in the tariff. 
In 1912 this surtax was abolished, but the Italian liquors, instead of 
being allowed free entry , were ^iven a preferential rate of three-fourths 
the amount of the rate on foreign liquors J-^ 

The governor is empowered to farm out the sale of the cigars of the 
Italian government monopoly.^® 

Export duties. — In the early years of the Italian occupation of 
Eritrea small export duties were collected in Massowa,'^'' A custom- 
house was also maintained on the landward side of Massov/a and all 
produce coming from the interior whether Eritrean or Abyssinian 
paid the import duty (8 per cent) at this point in advance of exporta- 
tion. By decree of June 14, 1893, this customhouse and the export 
duties upon the produce of the Eritrean mainland were abolished.'^® 
This same decree instituted a statistical duty (as already mentioned) 
on all imports or exports otherwise free. By decree of February 2, 
1899, all export duties, including those on Abyssinian products, were 
swept away and the rate of the statistical duty was made 1 per cent.'^^ 
In 1902 a list of specific duties was imposed upon the exportation of 
wild animals. This was the result of a general agreement among 
the African pov/ers for the preservation of wild animals, but the agree- 
ment was not ratified b^^ all the powers and never became obligatory.^" 
From 1903 to 1912 ^^ linseed was exempt from even the statistical 
duty.^- 

Treaty with the Anglo- Egyptian Sudan. — In 1901-2 Italy made a 
treaty with Egypt by which maximum rates were established for the 
trade between Eritrea and the Sudan. In each of the two regions 
the import duty upon the products of the other was limited to 5 per 
cent, and the rate of export duty on merchandise bound for the other 
for consumption there was limited to 1 per cent. This treaty was 
denounced on July 2, 1916, to take effect January 2, 1917, but the 
5 per cent rate was continued in force. ^^ 

Changes in rates of import duties. — Apparently from the beginning 
the general rate of the Eritrean tariff has been 8 per cent. The 
tendency has been, however, toward increasing complexities by 
mtroducing new rates both specific and ad valorem. Specific rates 

75 Royal decree, Apr. 18, 1912. Erit. Man., Vol. VIII, r). 600. 

75 Decree of Feb. 2, 1899, lb., Vol. IV, p. 303; art. 88 of provisions annexed. 

77 The rates are not given in the Erit. Man. But see B. I. d. D., 1892-93, No. 51. 

78 Governor's decree. Bol. di legis., 1893, Vol. 10, pt. I, p. 491. Some of the export duties had been 
abolished by an Avviso of July 13, 1886. Som. Man., Vol. I, p. 320. Camera del Deputati, Legis. XXI, 
1st sess., 1900, Atti Parlamentari, Doc. VII, Relazione sulla Colonia Eritrea, pp. 24-25. 

79 Erit. Man., Vol. IV, p, 309. 

80 The text of the convention of May 19, 1900, may be found in Som. Man., Vol. I, p. 120. The failure to 
ratify was due partly to the raising of the question whether the v/ild animals were not carriers of the sleep- 
ing sickness. 

81 Erit. Man., Vol. V, p. 216; governor's decree of Sept. 10; Bol. di l«gis. 1912, p. 1172; governor's decree 
of Dec. 10, 1912. 

82 In 1903 the Official Bulletin of Eritrea announced a bounty of 6 lire per hundred kilograms on wheat 
exported to Italy and a bounty smaller in proportion on exportation to countries where the duty on wheat 
was less than that of the Italian tariff. The payment of the bounty was limited to a total of 7,000 tons and 
to a period of three years. No mention of this bounty- is found in the Eritrean Manuale, but a criticism of 
it and a ministerial apology is found in L' Africa Italiana al Parlamento Nazionale, 18S2- 1905, p. 716. The 
governor had acted on his own authority, and the ministries of finance and agriculture denied all knowledge 
of it. The measure was soon abandoned. Sonnino, Senator Giorgio: Per il progresso della colonia Eritrea. 
Nuova Antologia, Sept. 16, 1904, p. 271. 

83 Treaty in Brit, and For. State Papers, vol. 94, p. 581. Denunciation in Bol. di legis., 1916, p. 475. 
Maintenance of the 5 per cent rate, Ibid., 1917, p. 121. 



ITALY. 389 

have been applied to tobacco since 1885^*; to grain, flour, and bran 
since 1896;^^ and to watches since 1899.^^ 

Rates higher than 8 per cent were put on cotton, silk, and sugar, 
in 1894;^^ and on wood and mineral oil, in 1899.^^ These higher 
rates were 15 per cent ad valorem, except on sugar where the rate 
was 20 per cent. In 1899 and 1900 these higher rates were reduced 
to the rates now in force, to facilitate competition in markets beyond 
the frontier.^^ In 1897 an ad valorem rate of only 1 per cent was 
put on raw gold, pearls, and precious stones ,^^ but since 1899 this 
rate has been applied only to raw gold. There are several provis- 
ions under which the personal effects of travelers, colonists, and 
officials enter free,^^ but the only goods marked free on the tariff 
schedules are coal and rough building stone ^^ and gold and silver 
coin. The silver admitted free is the coinage of the Latin League 
and the special coins of Eritrea. The exemptions are not absolute, 
for all goods free of customs duty pay 1 per cent as a statistical 
duty.^^ The treatment accorded the Maria Theresa thaler has 
varied; ^^ it is not included in the tariff schedules, but by special 
decree is now exempt both from the customs duty and from the 
statistical duty.^^ 

Between 1900 and the beginning of the war, changes were very 
few. In 1912 coffee the produce of the Yemen (Southwestern Arabia) 
was granted free entry. ^^ No reason for this is assigned except the 
desire to increase the -importation, but it appears from other evi- 
dences that the object was to encourage the cultivation of the Yemen 
variety. In 1913 the duty on wheat flour was somewhat reduced, 
that on wheat w^as almost cut in half, while that on flour of other 
cereals was more than doubled — making it the same as that on 
wheat flour. ^^ 

The war brought numxcrous prohibitions and other exceptional 
provisions, but the only change in the general tariff schedule was the 
doubling of the rates on tobacco, except that on surati leaf tobacco.®^ 

Preferences in Italy to products of Eritrea. — By a law of July 18, 
1904,®° Eritrean wheat to a limit of 20,000 quintals annually was to 
be admitted to Ital}^ free. In addition, the following products, in 
unlimited quantities, were granted free entry : Kousso flowers^ senna 
flowers,^ tamarinds, juice of aloes, gums and resins, raw cotton, 
wheat, barley, dura, millet, sorghum succharatum, bran. 

On April 1, 1915, a law was finally passed granting the rate of 5 
lire per hundred kilograms to Eritrean cattle and exempting them 

84 Erit. Man., Vol. I, p. 151; Vol. HI, pp. 213, 682. 
85lb., Vol. Ill, p. 529. 
86 lb. Vol. IV, p. 301. 
8vlb.,Vol. III.p. 213. 
88Ib. .Vol. IV,p. 300. 

89 Camera dei Deputati, Legis. XXI, 1st sess., 1900. Atti Pat-lamentari, Documento VII. Relazione 
sulla Colonia Eritrea , . . del Ferdinando Martini (Anni 1898 e 1899), presented July 6, 1900. 
90Ib., Vol. III,p. 682. 

91 lb., Vol. IV, p. 306; Vol. VI, p. 842, par. 9 from the decree of Dec. 2, 1899. 

92 Since 1897. 

93 Art. 19 of the provisions annexed to the decree of Feb. 2, 1899. lb., Vol. Ill, p. 309; Vol. VI, p. 848. 

94 lb., Vol. IV, p. 1035; Vol. V, pp. 373, 726; also in regard to gold and silver, Vol. I, pp. 326, 540, 589. 

95 lb., Vol. V, pp. 726, 742; Vol. VI, p. 25; Vol. VIII, p. 296. 
98 Governor's decree, Aug. 7, Erit. Man., Vol. VII, p. 665. 

97 Governor's decree of Dec. 4, 1913. Bol. di Legis., 1913, p. 1027. The rates were (lire per quintal): 
Wheat, 1900, 7.50; 1913, 4. Wheat flour, 1900, 12.50; 1913, 11.50. Other flour, 1900, 5; 1913, 11.50. 

98 A ministerial decree of Oct. 1, 1916, Gazzetta UfTiciale, Dec. 27, 1916. 

99 Erit. Man., Vol. V, p. 483. Regulations, Vol. V, pp. 534, 583; Vol. VI, p. 315. 

1 A decree of Sept. 2, 1915 (Bol. di Legis. 1915, p. 1152), corrects an error of transcription and makes this 
item now read "leaves of senna." That this error remained uncorrected so long suggests that the 
provision was of little or no importance. 



390 COLONIAL TARIFF POLICIES. 

also' from tPxG statistical duty. This favor was to be limited to a 
quantity to be specified annually b}^ ro3-al decree after consultation 
with the governor of Eritrea.^ "By"^ the same law the favor granted 
to Eritrean wheat in 1904 v/as withdrawn;-^ but the duty on wheat 
of all origins had been suspended.'' This suspension was continued 
at least until June 30, 1920. It was also provided that special cus- 
toms fa^cilities should be given to meat and meat products from 
Eritrea. To four Eritrean products a further favor was extended 
by the new tariff of Somalia proclaimed by the Royal decree of 
August 12, 1911, which was in force from January 1, 1912.^ 

PRESENT TARIFF RATES. 

Import duties.— As may be seen from the schedules which foUow, 
the present import tariff of Eritrea is characterized by the imposition 
of the rate of 8 per cent ad valorem on all articles of non-Italian pro- 
duction, with a few important exceptions. Tobacco, certain cereals, 
and watches pay specific rates; cottons pay 10 per cent ad valorem; 
while alcoholic beverages, oils, sugar, and linen pay 15 per cent. 
The free list is very short. The preference to Italian goods consists 
in their being admitted free, except for the statistical duty of 1 per 
cent and except that liquors pay three-fourths of the rate levied on 
the foreign product^ i. e., llj per cent instead of 15 per cent. 

Eritrean import duties.^ 

General Tariff. 

Lire. c. 

Cigars of all kinds " (kilo.) 15 00 

Cigarettes ' (kilo.) 10 00 

Tobacco; otherwise manufactured " (kilo.) 8 00 

Tobacco, in the leaf (except Surati) (kilo.) 5 00 

Tobacco, Surati (in the leaf and stalks) (kilo.) 75 

Wheats (quintal) '. 4 00 

Wheat flour « (quintal) 11 50 

Flour of other cereals ® (quintal) ] 1 50 

Bran » (quintal) 2 50 

Wine, beer, spirits, and liqueurs 15% ad valorem. 

Oils, fixed, mineral, or volatile 15 % ad valorem. 

Flax, raw or manufactured 15 % ad valorem. 

Wool, raw or manufactured 8 % ad valorem. 

Gold, crude or manufactured : 1 % ad valorem. 

Lire. c. 

Watches, gold (each) 2 

Watches, silver (each) 1 

Gold coin legally current Free. 

2 Bol. diLegis. 1915, p. 677. The absence of decrees specifying quantities, and of other regulations, makes 
it appear probable that this cattle trade does not exist and that the special rate remains thus a dead letter. 
In 1913 a factory was established in Eritrea for preparing m..eat products, especially those suitable for the use 
of the army. Considerable quantities of these products were shipped from Eritrea to Italy in the later 
years of the war, which probably took the place of shipments of cattle. 

3 lb.; p. 678. A decree of Feb. 3, 1918, exempted from duties, for the duration of the war, by-products 
of slaughtering (tongue, brains, etc.) prepared and conserved in boxes, when of Eritrean production. Min- 
istero delle Colonie, Bollettino Ufhciale, 1918, p. 54. 

* The abrogation of the favor to Eritrean wheat was dated back to July 1, 1914. The duty on wheat had 
beenreduced to 3 lire, per quintal (lOOlcilos) from Oct. 20, 1914, and was suspended from Feb. 1, 1915. (Board 
of Trade Journal, Feb. 25,' 1915.) 

5 The products and rates were: Coffee, 8 per cent; salt, 5 per cent; corn or wheat and flour, 1 per cent. 
Som. Man., Vol. Ill, p. 505. The favor to Eritrean corn or wheat and flour was established in 1905, but at 
5 per cent. On products coming from other sources the rate was 10 per cent. See under Somalia, p. 405. 
e A rebate of 10 per cent shall be allowed on the evaluation established by the customs appraisement. 
This rebate shall not apply to goods dutiable at the rate of 1 per cent ad valorem nor to those of a value 
inferior to 10 lire. 

7 Duties are established on real net weight. 

8 Duties are established on gross weight. 



ITALY. 391 

Lire. c. 

Silver coin of the Latin Union and of Eritrea Free. 

Cotton, raw or manufactured 10 % ad valorem. 

Silk, raw or manufactured 8 % ad valorem. 

Sugar and preparations of sugar 15 % ad valorem. 

Coal Free. 

Stones, building, unwrought Free. 

Scientific collections; products of the fisheries intended for con- 
sumption in the colony; cement, charcoal, and other materials 
proceeding from shores in the colony near a customs office, trans- 
ported by sea to facilitate transit by land, provided no doubt exists 
as to their origin ; samples of no value ; plants alive ; goods having 
paid duties and shipwrecked within sight of the littoral ; remains 
of masts, sails, anchors, and cordage of national vessels, wrecked; 
ship stores for use of the crew and passengers during their sojourn 
in port. - Free. 

Effects: Furniture, books, linen/ arms, and implements, having 
been in use, belonging to travelers and imported in a quantity 
proportionate to their position; war material and articles of equip- 
ment proceeding from military magazines and imported on ac- 
count of the royal colonial troops Free. 

Products of the entire colony, furnished with certificates of origin 
issued by the competent authority and proving the local produc- 
tion Free. 

Goods not specially mentioned 8 % ad valorem. 

Preferential Tariff, 

Italian spirits 11^^ ad valorem. 

Other ® national or nationalized goods within the meaning of the 
customs law, including those which have enjoyed drawback, if 
furnished with seals ^^ of the Italian customs and accompanied 
by customs bulletins replacing certificates of origin, and packages 
directed to public administrations by permission of the governor . . 1 % ad valorem. 

Export duties. — There are specific duties on the exportation of 
wild animals.^,* Mother-of-pearl is scheduled to pay 3 per cent.^^ 
Sheep and goat skins were temporarily exempted from export duty 
by decree of March 26, 1917, and this exemption was made definitive 
and extended to hides and skins of all kinds by decree of February 
18, 1919.^^ With these exceptions'^ all exports pay only the sta- 
tistical fee of 1 per cent. 

Export duties. 

Mother-of-pearl 3% ad valorem. 

Hides and skins Free. 

Goods cleared on importation and reembarked Free. 

Neukseed Free. 

Wild animals (each): Lire. 

Lions 130 

Leopards - 80 

Elephants 1, 300 

Giraffes 700 

Rhinoceros. - 1, 300 

Hippopotamus 600 

Gurezza and other long-haired monkeys 50 

Buffaloes 600 

Wild donkeys - 650 

Zebras 650 

9 The customs may, in exceptional cases, admit free of duty goods which are evidently of national origin 
even if they do not conform with these conditions. 

'0 Gypsum, lime, cement, bricks, roofing tiles, and other similar products shall not require seals. 

» Governor's decree of May 10, 1902 (Erit. Man., Vol. IV, p. 960), authorized by royal decree of Apr. 18, 
1902. 
. 12 Royal decree of Sept. 15, 1904. Erit. Man., Vol. V, p. 504. 

13 Bol. di legis., 1918, p. 287; 1919, p. 192. 

" Neukseed has been exempt from duty since 1909. Decree of May 11, 1909, Erit. Man.^ Vol- VI, p. 578. 



392 COLOIS'IAL TARIFF POLICIES. 

Wild animals (each) — Continued. Lire. 

Antelopes: addax nasomaculatiis, strespicerus capensis (etc.). 600 

Antelopes and gazelles: damaliscus tiang, bubaliis tora (etc.)- - 250 

Antelopes and gazelles: ariel, madoqua, digdig (etc.) 10 

Wild boar (phacocaer as africanns) ."...... 50 

Or^^cteropus oethiopiciis (arabic al3ii delef ) 50 

Ostriches 70 

Articles of archeological or ethnographical interest :^^ 

On the first 300 (? 500) lire of their value 6 % ad valorem. 

On the second 500 lire of their value Sfo ad valorem. 

On the third 500 lire of their value 10 % ad valorem. 

And so on up to 20% ad valorem. 

All other exports (statistical duty) 1 % ad valorem. 

Proliibitions , restncUons, and. monopolies. — ^Tlie importation of 
hashish is prohibited, and medicines enter only after special authori- 
zation.^^ The Italian Government monopoly of tobacco does not 
apply to Eritrea, but the monopoly's cigars pay a special lower tax — 
diritto di privatiya — and private individuals are not permitted to 
import them.^^ Salt is a Government monopoly. It is sold hj the 
customs administration at a fixed price. The chief prohibitions and 
restrictions in Eritrea have been those on the export of beasts of 
burden/^^ those on the sale of arms and munitions — including 
lead,^® and those imposed for sanitary reasons on the importation of 
cattle and plants.^^ A decree of September 21, 1916, prohibited the 
exportation of cattle hides to other than Italian ports.^^ 

Present "preferences in Italy to products of EAtrea. — The products 
of Eritrea enter Italy on the same basis as those of the most-favored 
nations, except cattle and the articles enumerated below. Cattle 
are given a rate of 5 lire per hundred kilograms up to a limit which 
is to be fixed annually by a royal decree. These cattle weigh usually 
250 to 300 kilograms, so that they pay about 15 lire each, as compared 
with the foreign cattle which average about 600 kilogram.s in weight 
and pay 38 lire per head (without reference to weight). On the basis 
of weight, therefore, and presumably on that of value also, the prefer- 
ence to colonial cattle is small. The change consists rather in the 
adoption of a different basis for the levying of the duty, so that 
small size will have no effect in the case of colonial cattle, whereas in 
the case of other cattle it will have an adverse effect.^^ Hides and 
skins, tanned without the hair, from all the Italian colonies were 
granted in February, 1917, free entry — for the duration of the war^^ — 
but this is of no importance to Eritrea. Since 1904 the following 
Eritrean products specified in the following table have entered free 
both from customs duty and from the statistical duty, and have had 
the protection of the duties, if any, specified on .articles of other 
origins: 

55 Decree of Oct. 3, 191S. Bollettino Ufficiale, 191S, p. 476. The authorization of tlte governor is neces- 
sary for the exportation of these articles. The text reads 300 lire, but the use of the words *'first" and 
"second," as well as a comparison with the similar laws of Italy and I>ibia, makes it seem probal)le that it 
should read 500. 

16 Erit. Man., Vol. IV, p. S49, art. 35. 

17 lb., Vol. Ill, p. 88S; decree of Oct. U, 1897, art. 15. This tobacco is admitted only through Massowa 
Governor's decree, Jan. 31, 1899. lb.. Vol. IV, p. 297, Reexportation of this tobacco is forbidden. 

18 Originally put on in the interest of the military force. lb., Vol. II, p. 734; Vol. Ill, pp. 173, 689; 
VoL IV, p. 310, art. 23. 

19 Tb., Vol. n. p. 548; royal decree of Dec. 8, 1892; Vol, W, pp. 884. 976. 

20 lb.. Vol. VII, pp. 281^ 374, 507. Between the decree of Dec. 24, 1904, and that of Apr. 19, 1906, the entry 
of American cottonseed was prohibited. B. I. d. D., 5th Supplement to >io. 57. 

^1 Southard, A. E.: Abyssinia, Special Consular Keports. No. 81, 1917, p. 59. Sheep and goat skins were 
not included, as the Italian tanneries were not in a position to treat them. Relazione sulla Situazione 
1918, p. 315. 

22 Italian Senate, Atti Interni, No. 708, Vol. 8, 1911. But probably no cattle are exported. 

5» Decree of Teb. 11, 1917. Bol. di legis., 1917, p. 219. 



ITALY. 



393 



Italian import duties. 
[Lire per quintal.] 



Articles, 


Tariff 

of 

1895-96. 


Tariffs 

of 1906 

and 1910. 


Rate 

in 
1920. 


Koiisso flowers. .\ 

Senna leaves . . . ./ 


/not pulverized . . 
\pulverized 


2 

4 

1.15 

1.15 

1.15 

3.50 


3 

30 

7 
10 

2 

3 
Free to 7 
Free to 4 

4 

1.15 

1.15 

1.15 

2 


3 

30 


Juice of aloes 








Raw cotton . . . . 








Wood conventional rates ^ ..... 




Barley 2 


Free 


Dura 


Free 


Millet , - - -/- 


Free. 


Sorgiium succharatunn 


y 


Free 


Bran 


Free, 







1 Some of the tariff items under the general term " wood " have lower rates under the conventional tariff: 
all the other articles on the list have the same rates in both columns of the tariff. 

2 Free for manufacture of beer. 

EFFECTS OF THE TARIFF DIFFERENTIALS ON ERITRE AN -ITALIAN TRADE. 

As Italian products have enjoj-^d practically the same differen- 
tial advantage in Massowa almost from the day of its occupation 
the effect of this differential can not be distinguished from the effects 
of the political and sentimental advantages which commonly bring 
a considerable proportion of the trade of a colony, even without a 
tariff preference, to the merchants of the mother country. As may 
be judged from Table 6, the imports from Italy were negligible before 
1886; they developed slowly to 1903 and rapidly since that year, 
and have come to constitute practically one-half of the total. The 
import totals from other countries decreased on the whole steadily 
from 1886 to 1905, and the recovery shov/n in the years 1910-1915 
does not bring the value of their imports — even with the inclusion 
of large quantities of bullion and specie — to the figures of 1886-1891 
which excluded that item. Detailed examination of the figures 
would no doubt show that this relatively constant foreign trade was 
made up to an increasing extent of certain articles in which Italy 
can not compete, and that the growing Italian trade represents to a 
considerable degree the substitution of Italian for foreign articles 
of the kinds in which Italy can compete; but this would be of little 
assistance toward determining the relative importance of the tariff 
differential as compared v/ith other factors in the development of 
Italian trade. In 1913, nearly one-third of the imports from foreign 
countries consisted of dura, rice, sugar, coffee, and raw tobacco, of 
which Italy supplied none.^* Italy supplied, however, all the ce- 
ment and most of the cottons and yams, lumber and wood manu- 
factures, wines, soaps, wheat flour, and kerosene. This last item 
represents transit trade. 



24 Except 9,300 lire worth of rice. 



394 



COLONIAL TARIFF POLICIES. 



Table 6. — Groivth of Italian export trade to Eritrea and the trade in cottons, 1886-1915. 

[In thousands of lire.] 





Eritrean imports. 


Cottons. 


Year. 


Total 
paying 
duty.i 


From 
Italy.i 


Total 
paying 
duty. 


From 
Italy. 


1886 


9,196 
8, 457 
11,172 
11, 742 
12, 646 
11,120 
9.543 
7,089 
7,875 
7,659 
12,098 
9,542 
10, 460 


591 

1,070 

1,262 

1,004 

1,215 

1,102 

929 

916 

849 

1,308 

4,686 

1,712 

1,758 


1 


1887 


1 


1888 






1889 






1899 






1891 






1892 


1,118 
2.293 
3; 116 

3,067 
2,232 
2,476 

2,489 


16 


1893 


17 


1894 


8 


1895 


21 


1896 


234 


1897 


28 


1898 


49 







Year. 



From 

all 
coun- 
tries. 2 



From 
Italv. 



Cottons 3 
imported. 



Imports of- 



Italian 
cottons. 



Foreign 
cottons. 



1899 
1900 
1901 
1902 
1903 
1904 
1905 
1906 
1907 
1908 
1909 
1910 
1911 
1912 
1913 
1914 
1915 



9,071 
9,277 
9,342 
7,990 
7,761 
7,777 
9,152 
10, 100 
10, 605 
9,133 

17, 226 
16, 373 
17, 161 

18, 845 
20, 453 
26, 368 
23, 623 



3,322 

2,806 

3,392 

2,633 

3, 152 

2,805 

3,468 

4,368 

4,266 

0) 

0) 

0) 

{') 

6,903 

5,792 

6,381 

9, 118 



90 
277 
345 
170 
184 
487 
1,916 
3,060 
2,900 
{') 
0) 
(*) 
(*) 

5,798 
4,908 
5, .575 
7, 711 



3,232 
2,529 
3,047 
2,463 
2,968 
2,318 
1,552 
1,308 
1,366 

{') 

0) 

(') 

(*) 

1,105 

884 

803 

1,407 



1 In addition to these figures the Eritrean statistics of the above years give imports from Assab (for 1893- 
1898 about 500,000 to 800,000 lire), and other imports free of duty, not otherwise explained. After 1887 this 
last item never exceeds 53,000 lire and disappears in tlie last forir years. Imports of coin and gold bullion 
are recorded separately, reaching 4.527,000 in 1895 and 11,266.000 in 1896. 

2 The totalincludes much foreign specie, e. g., in 1910-1913, 3,000,000-4,000,000 lire annually. The decrease 
of total imports in 1902 and years immediately following has been attributed to the progress toward self- 
sufficiency on the part of the colony: that of the early nineties to decreased mihtary expenditure. 

3 "Cottons" here includes all cottons, cotton yarns, and cotton goods made up, which are all included in 
the cotton item of the difl'erential tariff. 

•> No data available. 

The break in the table between 1898 and 1899 is due to the changes 
in the methods of tabulating the statistics. The ^'imports from all 
countries" of 1899 and after include not onl}^ all that is comprised 
in the first two columns C' Imports pa-ying duty" and '' Imports from 
Italy") for the years preceding but coin and bullion as well. *' Im- 
ports paying duty" and '^ Imports from all countries" include both 
imports for consumption and imports in transit for Abyssinia but 
exclude imported goods wa^rehoused at the ports and reexported by 
sea. 2^ 

In the tariff history of Eritrea the outstanding changes of rates 
on foreign goods, and therefore the important changes in the difier- 



*5 Reexports by sea have been tabulated (and included in general commerce) only in and since 1903, 
and for these years the figures here given are therefore of "special commerce." 



ITALY. 395 

entials, are the increases to 15 per cent on cottons and silks in 1894 
and on mineral oils in 1899 and the increase to 20 per cent on sugar 
and sugar products in 1894. If a sudden increase in Italian impor- 
tation had followed these tariff changes, the increase might be at- 
tributed to this raising of the barrier against the foreign product. 
That there was no such increase will be shown. 

Oils, silks, and sugar. — The figures dealing with oils are unsatis- 
factory in that the manner of entering them differs from year to 
year, but they show at least that the imports of Italian mineral 
oils did not exceed 1,000 lire in round numbers in any of the years 
1895-1899, and did not exceed 5,000 lire in 1900-1903, even though 
all oils other than olive oil aje recorded together. In 1904 and 1905 
imports from Italy of mineral oils other than kerosene vfere 5,000 
and 8,000 lire, compared with imports from foreign countries of 
18,000 and 15,000 lire. The total importation of mineral oils from 
1896 on was usually well over 100,000 lire. 

The increase in the duty on foreign silk in 1894 to 15 per cent, 
and its reduction in 1899 to 10 per cent and in 1900 to 8 per cent 
had no apparent effect on the importation of silks from Italy. For 
the 13 years beginning with 1892 the imports of Italian silks of all 
kinds were as follows, in thousands of lire: 13, 1, 2,3, J^, 0. 1, 3, 11, 
10, 1, 9, 19, the figures in italics representing the values imported 
in the years during the whole or part of which the higher differen- 
tials were in force. The imports of foreign silks usually exceeded 
100,000 lire. Similar figures for wool and woolens are, in thousands 
of lire, 3, 2, 3, 3, 15, 4, 11, 10,^ 6, 13, 7, 5.^^ 

Imports of sugar from Italy in the years 1 892-1 898-were negligible, 
the maximum being 1,505 lire. In 1903-1905 there v/ere none. In the 
intervening years, 1899-1902, beginning five years after the differ- 
ential on sugar and sugar products had been increased to 20 per 
cent and continuing two years after it was reduced to 15 per cent, 
the figures were given only as including sirups and were, in thou- 
sands of lire, 50, 58, 68, 55 — i. e., roughly one-sixth of the total 
imports, which were 337, 333, 328, and 315. 

Cottons. — Cottons are much the most important of the articles 
imported into Eritrea, and on them the higher differential duty of 
15 per cent put on in 1894 was reduced only to 10 per cent, instead 
of returning to 8 per cent, as in the case of silks and wool.^^ How 
little these rate changes affected the importation of Italian cottons 
is seen in Table 6, page 394. It is obvious that the years 1894 and 
1895 show no advantage gained by the merchants of the mother 
country, while 1896 is an exceptional year on account of the war 
with Abyssinia.2^ The interruption of the big items of the regular 
foreign trade, only slightly offset by Italian increases, and the stimulus 
to imports of the kinds used by the troops are seen in the following 
figures for 1896 as compared with those of 1895 (in thousands of lire) : 

26 The rate on wool and woolens was increased to 15 per cent, going into effect on Apr. 4, 1899. It was put 
ack to 8 per cent by decree of Mar. 23, 1900 (Erit. Man., Vol. IV, p. 645), going into effect immediately. 

27 Decree of Apr. 8, 1899; ib., Vol. IV, p. 353. 

28 The Eritrean figures through 1898 enter separately foreign products paying duty and Italian goods 
entering free. There is, therefore, no reason to distinguish imports made by the State. The military 
supplies landed at Gherar instead of Massowa, however, are not included. 

185766°— 22 26 



COLOXIAL TAEIFF POLICIES. 



Cotton goods. 


Foreign 

decreases. 


Italian 
increases. 


Foreign 
increases. 


Unbleached 


809 

47S 

•32 

30 


49 
11 




Dyed 








Yam . 








62 
24 
38 

1 


106 


Bleached 




110 


Knit e;oods 






Oilcloth 






Cordafre 






Embroidered 




108 


Muslin 






88 


Printed 






24 









Comparison ma}' be made with, the similarly short-lived increase 
in the total Italian imports for the year 1896, It was not until 1904 
that the Italian trade in cottons increased in such a way as to cut 
into the foreign trade. For 1912 and 1913 the figures are (in thou- 
sands of lire) : 





Cotton goods. 


1 

i 1912 


191-3 


Unbleached cottons: 

Italian 




3,929 


3,381 
3, .519 

1,527 


Total 




4,194 


All othei-s and yarns: 

Italian 




...] 1,869 


Total . 




2 7()Q 


2 273 







The Italians had attained before the war almost a monopoly of 
the trade in unbleached goods, and about two-thirds of the trade in 
the better grades of cottons. 

The statistics available are not as satisfactory as might be desired, 
but they show with sufficient clearness that the trade in mineral oils, 
silks, woolens, sugar, and sugar products has not gone to the Italians 
even with the aid of the preferential tariff, and that the increases and 
decreases in the differential rates in 1894 and the following 5^ears 
produced no effect discoverable in the trade statistics. The more 
important trade in cottons likewise shows no effect from the higher 
differential of 1894-1899; but in this case other causes, aided no 
doubt by the continued differential duty of only 1 per cent on Italian 
as against that of 10 per cent on foreign cottons, have brought since 
1904 the great bulk of this trade into the hands of the Itahans. 

Effect of free entry to the Italian rrtarlcet. — The effects of the free 
entry to the Italian market granted to certain Eritrean products ^^ 
in 1904 can not be shown very conclusively from the available 
figures. ^^ 

When the exemptions from the Italian duties were granted, the 
exports from Eritrea consisted almost wholly of pearls, mother-of- 
pearl, coffee, and hides. Gums and resins appear in the Italian 
statistics for 1901, 1902, and 1904, to the values of 17,000, 25,000, 
and 37,000 lire, respectively. In gums alone of the articles on the free 
list was there an existing trade of substantial amount. In the years 

23 Seep. 392 above. 

20 Complete figures through 191.5 are available for the imports of Italy fi'om Eritrea as reported by the 
Italian customs, but the Eritrean figures sho^\-ing what proportion of the total Eritrean exports went to 
foreign coimtries are not complete in the material availalDle. The Eritrean figures for 1902-1904 shov a total 
exportation to Italy of only 954,000 lire, while the Italian figures show imports from Eritrea of 5,550,000 lire. 
In later years the discrepancies between the two sets of figures are very much less. 



ITALY. 397 

1905-1908, inclusive, the importation of gums from Eritrea into Italy 
never reached one-half of the 37,000 lire of 1904, and apparently it 
was at no time more than a small part of the total exportation of 
Eritrea. But in 1909 the figm-e suddenly rises to 195,000 lire, and 
the Eritrean figu.res of 1912-1914 show that Italy was taking practi- 
cally the whole exportation. 

In addition to gums the only article on the Italian free list in which 
any previous trade appeared .was medicinal herbs, including pre- 
sumably kousso flowers and senna leaves. The usual total exporta- 
tion under this head, indicated by a few figures for years before the 
war, was 1,000 to 4,000 lire, destined chiefly to Arabia. Of these 
herbs, importations into It^ly of 1,000 lire or less are recorded for 
1904, 1908, 1909, and 1913, and an item of 47,000 lire in 1915. 

The articles on the exemption hst in which there was no export 
trade in 1904 m_ay be divided into two groups: (1) In barley, millet, 
dura, and bran no regular export trade has gTown up, though in 
occasional years there has been an exportable surplus of all except 
dura — ^for instance, Italy imported baiiey from Eritrea in 1909 and 
in 1910 to the value of 94,000 lire and 18,000 lire, respectively, and 
bran in 1915 to the value of 18,000 lire. Heavy imports of dura into 
Eritrea are the rule. No exports of wood appear. (2) In wheat 
and cotton a considerable trade has developed. Wheat from Eritrea 
appeared suddenly in 1908 as an Italian import item of 451,000 lire; 
it rose in 1912 to 651,000 lire; after which it dropped to 19,000 lire 
in 1913, none in 1914, and 73,000 lire in 1915. But it appears from 
the Eritrean figures that this represented a decline in the exportation 
and not a diversion of the trade from Italy; indeed, in the last two 
years there was considerable importation— in. 1914:, two-thirds of it 
from Italy. The Eritrean figures also show that in 1908-1912 the 
exportation to Italy was somewhat greater than the 20,000 quintals ^^ 
admitted to Italy free. Roughly, the greater the surplus above 
20,000 quintals the smaller was the proportion of the surplus which 
went to Italy. 

In the same way cotton, though the first small quantities exported 
in 1905-6 w^ent mostly to Egypt, appears to have been sent since 
1907 exclusively, or almost exclusively, to Italy. 

To conclude, it appears probable that the exemption of these vari- 
ous articles from the Italian duty has helped to divert the trade in 
gums to Italy and to establish wheat and cotton growing, of which 
practically the v/hole production was shipped before the war to Italy; 
but, in the absence of a careful study of comparative prices and 
tariffs in alternative markets, these conclusions can be put forward 
only as suggestions of probabilities. Evidently it has not sufficed to 
stimulate an exporting industry in other grains and wood^ nor to 
divert the trade in mediciiiai herbs from Arabia^ One of the mono- 
graphs published by the Italian colonial ministry ^^ states that the 
law of 1904, by offering a secure and profitable market for wheat, 
intensified wheat cultivation on the part of Europeans and turned 
the natives from barley to wheat. But later the writer gives figures 
for oleaginous seeds or nuts,^^ whose exportation developed more 
rapidly than that of wheat, and he pays a tribute to the Italian mer- 

31 With a shortage of a few hixndred quintals in 1911. 
. S2 Monografie e Happorti Coloniale. 1914, No. 14, La Mostra rjoloniaie di Genova, p. 194, 
33 Practically the whole is flaxseed.. Its exportation all but ceased during the war. 



398 



COLONIAL TARIFF POLICIES. 



chants, who send the product almost entirely to Italy in spite of the 
fact that the opposition of the olive interests has preYented the 
granting of any exemption on this product. The trade in the seeds 
of the palma dum, a raw material for button manufacture, admitted 
'free to the Italian market from all sources, before as well as after 
1904, shows a like development. 

A comparison of the figures in Tables 7 to 9, inclusive, shows that: 
(1) the exportation of wheat to Italy manifested a tendency to be 
limited to the 20,000 quintals which was granted free entry, but 
when the production was large, dutiable wheat as well as free wheat 
was exported to Italy; and (2) the limited free admission of Eritrean 
wheat (that from all other sources being dutiable) was not a suffi- 
cient stimulus to develop as great an external trade in wheat as 
developed at the same time in oleaginous seeds and in the seeds of the 
palma dum, of which the former has been continuously dutiable and 
the latter continuously free on entry to Italy from all sources. Evi- 
dently, therefore, caution is required in attributing the development 
of wheat growing in Eritrea and its exportation to Italy solely or 
mainly to the differential feature of the Italian tariff. 

Table 7, — Export of wheat from Eritrea. 
(Eritrean Avheat up to 20.000 quintals entered Italy free 1904-1914, other wheat being dutiable.) 



Year. 


Total (in 

thou- 
sands of 
lire). 


Total (in 

thou- 
sands of 
quintals). 


To Italy 
(in thou- 
sands of 
quintals). 


1908 


365 
702 
398 
295 
304 
27 


24 
47 
27 
19 
20. 
1 


21 


1909 


31 


1910. 


24 


1911 


19 


1912 .. • . 


20 


1913 


1 







Table 8. — Export of oleaginous seeds from Eritrea. 

(Continuously dutiable in Italy.) 

[In thousands of lire.] 



Year. 


Total. 


To Italy. 


Year. 


Total. 


To Italy. 


1906 






1910 


309 

688 

977 

1236 


164 


1907 


3 

18 
292 




1911. . 


513 


1908 


10 
236 


1912. 


946 


1909 - --- 


1913.. 


171 









1 Linseed constituted 233,000 out of this 236,000. 
Ml to 56,000, 40,000, and 2,000, respectively. 



In the three years following 1913 the export of linseed 



Table 9. 



-Export of seeds of the jjalma dum from Eritrea. 
(Continuously free in Italy.) 
[In thousands of lire.] 



Year. 


Total. 


To Italy. 


Year. 


Total. 


To Italy. 


1906 . . 


167 

533 

153 

1,009 

1,207 


(0 
166 
519 
144 
856 
799 


1912.. . ... 


1,174 

1,434 

1,084 

716 

982 


728 


1907 


1913 


1,203 


1908 


1914 


802 


1909 


1915 


716 


1910. 


1916 


973 


1911 











Not recorded separately. 



ITALY. 



399 



SOMALIA. 



SITUATION AND COMMERCE, 

The colony of Somalia lies on the east coast of Africa, extending 
from just below the Equator northward, with British East Africa 
and Abyssinia to the west. It embraces the southern portion and a 
little more than one-half the area of Italian Somaliland, 

Agriculture is carried on in the river valleys, but most of the land 
is adapted only to pasturage. The natives, for the most part nomadic 
herdsmen, weave some cloth and make baskets, but there is little 
foreign trade in the product^ of these industries. Cotton goods con- 
stitute nearly one-half of the total importation; sugar, coffee, to- 
bacco, and flour are other important items. The chief articles of 
commerce and the share of Italy in the trade for the last year before 
the war are shown in Tables 10 to 12, inclusive. 

Table 10. — Trade of Somalia, 1913-14. 
[In thousands of lire.] 



Imports. 


Total. 


From 
Italy. 




2,865 
594 
507 
364 
297 
208 
181 
170 
149 

1,566 


2.547 


other cotton goods. 


' 30 






Coffee and coffee shells . . 








Flour 


1 


Petroleum 




Rice . 


2 


Cotton yam 


5 


All other articles ' 


393 








Total 


6,960 


2 2,977 






Exports. 


Total. 


To Italy. 


Dried skins .... 


1,067 
200 , 
175 

87 

72 

200 


3 






Native butter . 




Cotton 


41 


Cotton cloth . . 


1 


All other articles i. 


1 








Total 


1,801 


3 46 








Total trade .... 


8,762 


^ 3 022 







1 Excluding specie and imports and exports on government account. 

2 Or 42.8 per cent of total. 3 Or 2.5 per cent. * Or 34.5 per cent. 

The effect of the war on the total value of the commerce of Somalia 
was not marked. As may be seen from Tables 11 and 12 the most 
noticeable feature of the totals is the increase in the value of exports 
in 1917. But great changes appear in single items; imports of cotton 
decreased in value from 3,464,000 lire in 1913-14 to 1,941,000 in 1917, 
and raw sugar from 523,000 to 178,000 lire, and these smaller values 
indicate still larger decreases in the quantities imported. The in- 
crease in the total exports in 1917 was due largely to the appearance 
of a new item, wool, valued at 484,000 lire and to increases in cattle 
hides and goat skins from 661,000 in 1913-14 to 1,083,000 lire in 1916 
and to 1,659,000 in 1917. The effect of the war on the source of the 
imports and the destination of the exports was likewise marked. The 



400 



COLOIs^IAL TARIFF POLICIES. 



share of Italy in the imports steadily decreased and her share of the 
exports rapidly increased, so that instead of nearly one-half of the 
import trade, Italy came to have practically none of the import trade 
and two-thirds of the export trade. The import trade lost by Italy 
was taken largely by India, British East Africa, and Australia. While 
the published figures do not give the destination of the exports by 
items, there can be no doubt that — even before May 1, 1917, while 
the exportation of hides to other countries than Italy was still per- 
mitted — Italy was taking all or nearly all the hides, skins, and wool 
from Somalia as well as from her other colonies.^- 

Tables 11 and 12 show the value of the total trade of Somalia and 
the share of this trade with Italy. Figures are included for the most 
important item, of imports, cottons, and the m^ost important item of 
exports, cattle hides. The figures for the goods imported free for the 
civil services of the government are not included in the imports from 
Italy nor in the totals, and these goods may not have come exclusively 
from Italy. 

Table 11. — Imports into Somalia.''- 

[In thousands of lire.] 





Commercialimports. 


Govern- 
ment 
imports. 




Year. 


Total. 


^'^^^- Italy. 

i 


Cottons. 


1912-13 2 


6,088 
6,961 
5,555 
5,835 
7,286 
6,065 


2,422 
2,977 
1,737 
1,550 
1,202 
381 


40 
43 
31 
27 
16 
6 


2 399 


?! lOQ 


1913-14 2 


'643 ^ 3,' 464 


1914 . . 


652 1 2 0^9 


1915 


993 2,431 
703 2,376 

824 1 . 941 


1916... 


1917 









1 Ministero delle Colonie, BoUettino di Informazioni , Vol. VI, No. 1. 

2 Fiscal years endiiig Jime 30. The difEerence between the fiscal j'ear 1913-14 and the calendar year 1914 
shows the immediate effect of the outbreak of the war on the imports from Italy and on the trade iri cottons. 

Table 12. — Exports from Somalia ^ 

[In thousands of lire.] 



Year. 


Total. 


To Italy. 


Per 
cent to 
Italy. 


Cattle 
hides. 


1912-13 


2,063 

1.801 
1,611 
1,865 
2,614 


14 

46 

112 

894 

745 

2.515 


1 
3 

7 
48 
29 
65 


738 


1913-14 


519 


1914 


533 


1915 . 


796 


1916 


855 


1917 


3,878 


1,209 







1 Ministero delle Colonie, BoUettino di Informazioni , Vol. VI, No. 1. 



TARIFF HISTORY. 



Under the administration of Zanzihar. — While the four ports of 
Somalia, known as Benadir/^ were still under the adniinistration of 



3^ The increase in the Italian share of the exports of Somalia may not be so great as appears from the 
figures for the direct trade. Two-thirds of the exports formerl}^ went through Aden, but in 1916 only 40 per 
cent, and in 1917 only 10 per cent; i. e., Italy may pre\'lously have obtained Somalian products ^ia Aden. 
Aden's share of the import trade of Somalia decreased_durLng the war, but not greatly, so that both before 
the war and novv'- the figures probably do not disclose Italy's full share of the trade. But as the Italians 
have made special efforts to develop direct trade mth their colonies probably only a small part of the 
merchandise transshipped at Aden is for Soraalia Italiana. 

8* See p. 373. 



ITALY. 401 

Zanzibar, the import duties levied there were restricted by treaties. 
As early as 1833 the Sultan^® had agreed with the United States 
not to levy on imports duties higher than 5 percent ad valorem. 
This provision was modified by treaties of 1886 with Great Britain, 
Germany, and the United States to permit a rate of 25 per cent 
on liquor containing over 25 per cent of alcohol. ^^ The treaties with 
Germany and Great Britain limited the export duties also; the 
rate on ivory, rubber, and copal was restricted to 15 per cent, that 
on hides and various other articles to 10 per cent, that on tobacco 
to 25 per cent, and that on cloves to 30 per cent. Other rates 
were prescribed for other ^products. The ad valorem rate on goods 
not specified was to be not over 5 per cent. There were, in addi- 
tion, a few specific rates — as, for example, horses, 10 M, T.^^ thalers 
each; and camels, 2 M, T. thalers each. 

Under Italian comi)anies. — The Italian occupation of Somalia 
apparently began with the taking over of the port of Itala on March 
14 J ^1891._ Thereafter the coast was gradually occupied. The ad- 
ministration of the colony was intrusted at first to the ^^ Italian 
Company for Somalia, V. Filonardi and C," and in 1899-1905 to 
the Benadir Compan}^. Customhouses were opened at the four 
Benadir ports whi^h had formerly been leased from Zanzibar, namely, 
Brava, Merka, Mogadisho, and Warsheik, as well as at Giumbo, 
Itala, Langione, Torre, Mruti, and Dgelleb (Gehb Mare).^® 

By a treaty of December 22, 1890, Italy, Germany, and Great 
Britain agreed to limit to 5 per cent all import duties in their 

Possessions in the eastern zone of the Conventional Basin of the 
ongo.*« 

This treaty went into effect in April, 1892, at the same time as the 
Brussels convention of 1890, and apparently remained in effect 
throughout the period of the administration of Somalia by com- 
mercial companies. These companies were bound to carry out 
Italy's international obhgations. Further, by the terms of the lease 
of the four Benadir ports, ''the obligations which are or could be 
imposed by adhesion to the general act of Berlin" were imposed 
upon the Italian company which signed the lease.^^ The regulations 
promulgated on April 14, 1895, for the territory not leased from 
Zanzibar, and which had already been proclaimed in the four leased 
ports, levied 5 per cent on both imports and exports, except as other- 
wise specified. The only higher rate on imports was 25 per cent 
ad valorem on liquors containing over 20 per cent of alcohol. Export 
duties in excess of 5 per cent but not exceeding 15 per cent were 
levied on most of the principal products of the country. 

S6 The Sultan of Muscat, whose domains then included Zanzibar. The Sultan of Zanzibar definitely 
aclcnowledged this treaty after he had established his independence. 

37 Brit, and For. State Papers, vol. 78, p, 777, treaty with United States signed July 3, 1886, and ratifica- 
tions exchanged Jtme 29, 1888, modifying treaty of Sept. 21, 1833. lb., vol. 77, p. 54, treaty with Great 
Britain, Apr, 30-Aug. 17, 1886. The American treaty contained no time limit; tlie English treaty v/as 
for 15 years. Anitalian missionin 1892 found a uniform import and export duty of 5 par cent in force in 
Merka. Italian Green Book, La Somalia Italiana, p. 131. 

38 M. T.=Maria Theresa (thaler), approximately S0.50. 

S3 Some of these were later abandoned. The regulations accompanying the tariff in 1910 mention eus" 
tomhouses at the first six of those named and also at Gesira, and in the interior at Bardera, Lugh, Gelib 
(Gelib Juba), Kansuma, and Margherita. Som. Man., Vol. 11, p. 333, Art. i. The regulations of 1911 
do not mention the stations. 

40 Brit, and For. State Papers, vol. 82, p. 81. Trattati e Convenzione, vol. 12, p. 493. This treaty is listed 
in the Elenco degli Atti Internazionali . . . invigoreall Gennaio 1908, p. 81, under treaties with Ger- 
many, bat it is omitted from the list of those in force with Great Britain. It provided for a conditional 
duty of 10 per cent on arms and munitions, and for the free importation of agricultural tools and machinery, 
and materials for the building and maintenance of ways of communication. As this treaty was subsidiary 
to that of Brussels, the limitation to 5 per cent did not apply to distilled liquors. 

« Brit, and For. State Papers, vol. 84, p. 632. 



402 coLo:^nAL tariff policies. 

Under the Italian Government. — The Italian Government took over 
the administration of Somalia in 1905. Shortly afterwards a new 
tariff was decreed, containing both differential duties and import 
rates higher than 10 per cent. This tariff was set forth under 73 
heads.^2 Most of the articles were subject only to import or to export 
duties, but a few were subject to both. Import duties of 15 or 20 
per cent were levied on iron bars and manufactured iron, arm^s, and 
munitions, salt, tea, spirits, and suaheli tobacco. Even higher rates 
were levied on other tobaccos and on nickel and copper money. 
Machines and their parts and pulse paid 5 per cent. Cottons, 
including yams, were listed at 5 to 8 per cent. Other articles paid 
for the most part 10 per cent, which was also the rate on goods not 
enumerated. The duties were payable in gold. Payments made in 
Maria Theresa thalers or in nickel were subject to an increase of 3 
to 5 per cent. 

Under this tariff the articles appear in a single schedule with tha 
same rates for goods of Italian as for goods of foreign origin. Thir- 
teen items, however, have subheads ^ ^foreign" and ' 'Italian,'' so 
that the differential can not be overlooked. In the case of these 
thirteen items, the rates on Italian goods were, except for cottons 
and beads, just one-half those on the foreign goods. ^^ Bottled wines 
and vermuth had a specific rate^^ and the other articles paid 5 or 10 
per cent accordingly as they came from Ital}^ or from foreign countries. 

''Cotton textiles'' of foreign origin paid 7 per cent; other cotton 
textiles called "Merican" and "Bofta" were scheduled for 6 per cent 
and 8 per cent respectively. These latter came only from foreign 
sources, and the duties were therefore also differential in so far as 
the goods competed with the cottons of Italian origin which paid 
only 5 per cent. On this point an extract from a decree of June 29, 
1906, may be quoted: 

Considering that the customs tariff in force in Somalia Italiana Meridionale is in- 
spired by the principle of the concession of preferential rates (dazi di favore) for some 
of the dutiable national goods; considering that when the said tariff [that of Sept. 
12, 1905] was compiled, national cotton textiles of the type Merican and Marduf 
were not specified, probably because no importation had as yet been made of them, 
considering that for some months the laudable initiative of certain merchants has 
begun to introduce upon this_ market someof the aforesaid textiles of national manu- 
facture; and whereas it is suitable to facilitate, in so far as it may be done without 
grave injury to the finances of the colony, the penetration of this national product 
also into the different markets of Somalia Italiana Meridionale for the advantage 
that would result from the development of the trade with the mother country 
[the duty on these cottons, if of Italian manufacture and certified in the proper 
manner, was reduced from 6 per cent to 5 per cent.]"*^ 

This change was incorporated in the tariff of August 20, 1907, in 
which cottons were classified and given rates as follows: "Cotton 
textiles" — foreign 6 per cent, Italian 5 per cent; ''Bofta," 8 per 
cent; "various" — foreign 7 per cent, Italian 5 per cent. 

The Governor, Comandante Cerrina, who signed this decree, 
feared (rightly) that the slight reduction would not be sufficient to 
enable Italy to compete with the quantity production and cheap 

^2 Som. Man., Vol. H, pp. 815-325. Deereto Conunissariale No. 27, Sept. 12, 1905. 

« The rates on beads were 10 and 15 per cent. 

«4 The surtax of 100 lire per hectoliter of spirits, pure, sweetened or perfumed, of 50° strength with an 
increase of 2 lire for each additional degree, was doubled Avhen applied to foreign products. Art. 151 of 
the Regulations of Sept. 12, 1905. Som. Man., Vol. II, p. 297. 

« Som. Man., Vol. II, p. 492. 



ITALY. 403 

he regretted that fiscal reasons 
preYented greater preferences^ and he looked forward to a time when 
by admitting her own cottons duty free Italy might completely 
conquer this market.^' 

Two other changes in the differential duties appear in the customs 
statistics. From the figures for 1909-10 and 1910-11, it appears that 
^oods not specially enumerated in the tariff (merci diversi) were pay- 
ing only 5 per cent if of Italian production and 10 per cent otherwise.^^ 
Likewise the figures for 1909-10 and 1911-12 show a differential 
duty on cement.'^^ Changes in the nondifferential rates are likewise 
few. Perhaps the most important was the reduction of the rate on 
salt from 20 per cent to 10 per cent.^^ 

A change, which on the face of it was only for administrative pur- 
poses, increased and may have been intended to increase certain of 
these differential duties. A decree of June 20, 1909,^^ provided that 
thereafter goods not listed in the official tables of valuations, should 
pay duty on the invoice value plus 20 per cent, instead of plus 40 per 
cent ^^ which had been the rule for some years. Most of the articles 
enumerated in the tariff have valuations assigned to them, but those 
articles on which the duties are differential have for the most part no 
valuations assigned. But there are four exceptions to this rule. 
On flour, matches, corn, and wheat, and on Merican and Marduf 
cottons, ^^ the foreign articles have valuations assigned to them, and 
the Italian have not; so that the change of basis for the levying of the 
duty reduces the amount payable on the Italian goods by one- 
seventh,^^ without affecting the amount collectible from the foreign 
goods. 

Export duties, 1905. — Under the tariff law of 1905, duties were 
levied on all exports, the rates being specific on grain and animals 
and ad valorem on all other articles. Ambergris paid 20 per cent; 
tortoise shell, ivory, rhinoceros horns, and myrrh, 15 per cent; ostrich 
feathers, 8 per cent; gums, 6 per cent; native butter, pottery, oil of ^ 
sesame, cotton, cotton textiles, and a few other articles paid 5 per * 
cent, and practically everything else 10 per cent. The specific rate 

■s^In his report of 1906 he states more specifically that ''Merican" and "Marduf," come almost wholly 
from North America. Senato del Regno, Ses. 1904-1909, Legis. XXII. Atti Interni, No. 264. Annex 1. 
Estratti dalla Relazione del reggente il Governo del Benadir, G. Cerrina Feroni ... in data del 23 
Marzo, 1906. 

47 Minister© degli Affari Esteri, Benadir, pp. 116-177. 

^8 This differential possibly goes back to 1905-6, as a differential at that rate appears on certain cotton 
goods imported in that year; these cottons were called "diversi" and no other "merci diversi" from 
Italy v/ere recorded in that year. 

« That is, unless the rate had been changed in the interval. A shipment from Italy in the former j^ear 
paid 5 per cent and one from abroad in the latter year paid 6 per cent. * 

50 Decreeof Feb.l6, 1907. Som. Man., Vol. II, p. 521. Thechiefobjectof the tariff of 1907 apparently was 
to classify minutely various articles, for the purpose of assigning them official valuations. For instance, 
17 kinds of leaf tobacco are enumerated where only 3 had been before, and 5 varieties of Bofta cottons as 
against 1 before. Four kinds of sugar are named, which had the effect of raising the duty on other kinds 
from 5 to 10 per cent, by transferring them to " articles not specially enumerated, " a classification according 
to which refined sugars were subject to the maximum differential under the tariff of 1911. Cf. Mono- 
grafie, No. 14, 1914, p. 395. If the text of the tariff of 1905 in the Som. Man. and the Bol. di leeis. is correct 
in showing a higher duty on a bottle of beer than on a liter, then the figures were reversed in 1907. The same 
reversal appears in the valuations placed on ginned and unginned cotton. There are a number of tj^po- 
graphical errors in the tables. 

51 Decreto Governatoriale, No. 366, Som. Man., Vol. Ill, p. 113. 

52 The tariff' regulations provide that the table of valuations shall appear early in September, based on 
the average prices of the four preceding months. Regulations of Sept. 12, 1905, art. 144, Som. Man., 
Vol. II, p. 292, and preliminary provisions of the tariff of 1911, art. 2, lb.. Vol. Ill, p. 489. Comandante 
Cerrina's report of 1906, p. 22, notes that as the coast was closed by the monsoons during these months, 
prices were very high. He thought that the 40 per cent added to the invoice valuation as corresponding 
to the increase in the value due to costs of transportation, etc., was perhaps too high, and he suggested its 
reduction to 30 per cent. 

53 This applies to the valuation tables of 1905, 1907, 1911-12, 1912-13, and 1913-14; the only ones found 
in the Som.. Man. and Bol. di Legis.; and with little doubt was true of the table current in 1909. 

5* The ad valorem duty is paid on 120 per cent of the invoice value instead of upon 140 per cent of that 
value. 



404 COLOIl^IAL TAEIFF POLICIES. 

on dura and maize, 1 Maria Theresa thaler per gisla ^^ was equal to 
20 or 25 per cent ad valorem, and the rates of 1 J to 7+ Maria Theresa 
thalers each on animals were equivalent to rates of 12^ to 33 per cent 
ad valorem, if the official valuations show the market prices ;^^ while 
the rates of 20 and 25 Maria Theresa thalers on horses and mules 
were 40 and 60 per cent, respectively, of their valuations. The 
Comandante's report ^^ complains that the heaviness of the export 
duties restricted the trade, and he particularly mentions those on 
cereals, animals, myi^rh, and gum (which is of poor quality and on 
which 6 per cent is almost prohibitive). Most of them were later 
greatly reduced. 

PRESENT TARIFF RATES. 

The present tariff of Somalia appears in ^yq schedules, there being 
different schedules for imports from foreign countries, from Italy, 
and from Eritrea; and separate schedules for exports to Italy and to 
foreign countries. With few m.odifications, the rates are those of the 
royal decree of August 12, 1911, which came into force on January 1, 
1912.^® They are given in extenso on pages 406-7 below, rearranged 
into a single table of import duties and one of export duties in order 
to exhibit the differential rates. 

It will be observed that the rates on tobaccos ^^ and on goods not 
enumerated exceed the 10 per cent allowed by the additional act of 
the Brussels conference of 1890 for the Congo free trade zone. 

Increo.se of differentiol rates in 191 L — The differentials in favor of 
Italian goods are greatest on the articles not enumerated and partic- 
ularly on those not listed in either schedule. In fact more than one- 
haK the items in the schedule for imports from Italy have rates the 
same as those on similar foreign articles. The preferences are for 
the most part unenumerated and to that extent concealed. 

it will be observed also by comparing the rates with those previ- 
ously m force that every increase over the rates of 1905 — on wine, on 
machines and parts thereof, on cotton yarn and ail cotton textiles 
not mercerized, and on all articles not enumerated — falls only on the 
foreign product, i. e., is used only to increase the differential. Fur- 
thermore, every preference (with the single exception of the surtax 
on spirits, fomidnot in the tariff schedules but m the preliminary 
provisions) previously granted w£is increased at this time. Thus on 
cottons of ail kinds (except those mixed with silk) the differential was 
changed from 5 per cent on Italian, compared with 7 per cent on 
foreign goods, to 3 per cent on Italian against 10 per cent on foreign 
goods. The rate on Italian wines remamed unchanged, but that on 
foreign wines v/as made three times instead of twice as great; on 
linen made up, and on flour, corn, and wheat the rate on Itahan 
products was reduced from 5 per cent to 1 per cent, the rate on the 
foreign article remained at 10 per cent. The following articles on 

55 The gisla is equivalent to approximately 3i huBdredweight. 

66 As the duties are specific and the valuations are merely for statistical purposes, there is no reason to 
suppose that they greatly misrepresent the low values on "this isolated coast. Cf. the market quotations 
pubUshed in later years in the BoUettino di Inf ormazioni of the Colonial Ministry; e. s;.. Vol. I\ , No. 10-12, 
according to which camels were selling in July, 1916, in the lower part of the Webi Scebeli at prices from 35 
to 70 rupees, and oxen from 12 to 40 rupees. 

57 Ministero degli Affari Esteri, Benadir, p. 116. And see the official valuations in Som. Man., Vol. II, 
pp. 326-337. The tariff of 1907 increased the duty on Benadir beans from 1 per cent to 1 Maria Theresa 
thaler per gisla, equivalent to 15 per cent according to the official valuation. Bol. di legis., Vol. 25, p. 221. 
- 58 Som. Man., Vol. Hi, p. 486. 

69 The duties actually collected in 1914 were on leaf tobacco 15.5 per cent and on manufactured tobacco 
41.2 per cent of the value imported. 



ITALY. 405 

which the preference was formerly not more than one-half of the rate 
on foreign goods were transferred to the list of articles not enmneratedj 
where the duty is 1 per cent as compared with 15 per cent paid by 
similar foreign goods: Beads, matches, alimentary products, knit 
goods, silks, and cottons mixed with silk; and other goods on which 
there had been no preference were by the same transfer given the 
maximum differential: Tea, dry fish, mercery, spices, earthen and 
glass ware, mineral oil, and refined sugar. Other articles which have 
never been enumerated, but which are of som.e importance in the 
trade, are enameled ironware, Marzocchi lamps, candies^ and two 
kinds of cloth called bit and abdalla.can.^*' 

Differentials in export duties. — In the export duties two points are 
striking — the reduction of most of the list to 1 per cent, and the accord- 
ing of a 5 per cent preference to Italy in the exportation of hides and 
skins. This is important, not because of any success that it has had 
in diverting the trade,^^ but as showing the relative magnitude of the 
trade on which the Italians granted themselves this preference. 
Differentials on four items in the whole list do not look impressive, 
and thre^ of these have no great importance, but hides and skins 
usually constitute about two-thirds of the total export,^^ The export 
duty on hides and skins yields a considerable revenue and fear of the 
loss of this revenue prevented a greater reduction on exports to Italy. 
The striking increase in the export duty on oxen, in 1914, made that 
preference to Italy much the greatest in percentage of all the differ- 
entials. It would seem that the increases on goats, ewes, and cows 
must have been intended as a prohibition, a conclusion strengthened 
by the appearance in 1913 of a direct prohibition on the exportation 
01 camels. The rates on dura and maize, which the Comandante 
termed excessive in 1907, were left unchanged. 

Preference to products of Eritrea, — By the tariff of 1905, wheat 
from Eritrea was entitled to the same rate as wheat from Italy, 
namely, 5 per cent, as against 10 per cent levied on wheat of other 
origins. In 1911, Eritrean wheat, flour, corn, and salt shared the 
Italian preferential rate which was then m.ade 1 per cent (except salt, 
5 per cent) as against 10 f)er cent on the foreign product. In addition, 
coffee from Eritrea was given the special rate of 8 per cent, as against 
10 per cent on foreign coffees, though that from Italy pays only 1 per 
cent. ^ I 

No preference in Italy to products of Somalia. — No preference is 
given in Italy to products of Somalia. The only exception has been 
that a decree of February 11, 1917, exempted irom import duty in 
Italy, for the duration of the war, hides and skins which had been 
tanned without the hair in the Italian colonies. \ 

Italian imports from Somalia have not received the exemptions 
from the Italian duties made to certain products of Eritrea in 1904. 
If exemptions were granted on the same articles (the grant which the 
Government is empowered to make), the exporters of cotton and gums 
alone would in all probability benefit. The total exportation of 
cotton for the three years 1910-1913 was 174,000 lire, of which 10,000 

80 These are mentioned in Monografie, 1914, No. 14, p. 395, Italy being given as a source only in the case 
of the candles. The trade in these miscellaneous articles, i. e., those not enumerated on either list, is tv/o 
to three hundred thousand lire annually. 

61 Seep. 411. 

82 Martino, Tre Anni del mio Governo, p. 101, 139, 141. The fraction was three-fourths in 1911-12 and 
1912-13. In 1917, in spite of the large increasein this item, the fraction decreased toless than one-half. 



406 



COLONIAL TAEIFF POLICIES. 



lii'e went to Italy in 19 12-13 , according to the figures of Somalia. For 
gums, the total was about 43,000 lire, Italy receiving 15,000 in 1912 
and 1,000 in 1913, according to the Italian figures,^^ 

Import duties. 



TarifE 
Nos. 



Goods. 



39 



36 



Arms and ammimition ad val. . 

Manufactures of hides and skins do 

Tanned skins do 

Wood manufactures. do 

Lumber do 

Empty bags do 

Mats , do 

Sesame oil „ do 

Molasses do 

Chemical products for industrial use do 

SjTup for beverages bottle. . 

Dura" and '^'Mehinda" (maize) ., ad val,. 

Medicinalproducts do 

Vegetables do 

Cottonseed do 

Sesam e seed do 

Animals do. . . . 

Mineral and aerated waters: 

(a) Natural bottle. . 

(b) Artificial do.... 

(c) Soda water and lemonade do 

Crude iron and wrought iron ad val. . 

Machines and carts thereof do 

Salt \ ....do.... 

Dates do. . . . 

Cotton yarns : do 

Cotton tissues, except those mixed with silk do 

Sugar 

(a) "Bengar' do 

(b ) '' Seiau-sciau" do 

(c) Red do.... 

(d) "Nabad" do.... 

Coin: 

(a) Gold 

( b ) Thalers 

(c) Nickel .ad val. . 

(d) Copper 1 do 

Spirits, sweetened or perfumed, c in bottles or demijohns 

(in casks or barrels 15%) ad val.. 

Pure alcohol c do 

Wine in bottles or flasks bottle or flask. . 

In casks or demijohns 

Vermouth bottle. . 

In casks or demijohns 

j Beer: 

' (a) In bottles ....bottle.. 

(b) In casks litre. . 

Tobacco: 

(a) Arabian kilo. . 

(b) " Suaheh' ' do 

(c) "Bacumoni" ....do 

(d) "Sihui" : do.... 

(e) ' ' Kilva " do 

(f) Manufactured in the same way as tobacco manu- 

factured by the Italian State do.... 

(g) Other .....do.... 

Rice ad val . . 

Linen, made up do 

Coffee and coffee husks do 

Flour do 

Corn ("grano") and wheat do 



On goods 
of foreign 
origin.a 



10% 

10% 

10% 

10% 

10% 

10% 

10% 

10% 

8% 

5% 

J)B.10 

1% 

1% 

1% 

1% 

1% 

1% 

B. 6 

B.17 

B.3 

10% 
10% 
10% 
5% 
6% 
10% 



On goods 
of Italiaji 
origin.a 



20% 



B.30 



B.IO 
B. 15 



L. 2 
L. 1 
L. 1 
L. 1 
L. 1 

L. 8 
L. 6 



40 

72 
8% 
10% 
10% 
10% 
10% 



10% 
10% 
10% 
10% 
10% 
10% 
10% 
10% 
8% 
5% 
B.IO 



B.2 

B.17 

B.3 

5% 

5% 
5% 



3% 



On goods 

from 
Eritrea.o 



5% 



5%> 

5% 
5% 
5% 

Free. Free. 

■^/fw ilCurrent in colony, free; 
Duyo 

50% 



not current, 50%. 



20% 
15% 
B.IO 
5% 
B.IO 
5% 



8% 
1% 
1% 



a In the original these are given as separate schedules. They are here combined for convenience of 
reference. 

h B (besa)= 1/100 rupee; R (rupee)=S0.32; L (lira)=S0.193. (Pre war values.) ; 

c In addition to the duties in the tariff schedules the tariff regulations proyide for a sm^tax on spirits, 
pure, sweetened or perfumed. The rate of the surtax is 200 lire per hectoliter of 50° strength with an 
additional 4 lii-e for each degree above 50°. Denatured alcohol for industrial use is exempt, as are also 
fine liquors other than cognac, absinthe, and mastic, consumed ordinarily by Europeans and which sell 
for more than 3 lire per bottle. Itahan products pay only half of this surtax. This was the only prefer- 
ential dutv existing in 1911 where the preference was not increased at that time. 

63 According to the agreement with the commercial company v/hich governed Somalia in 1899-1905, the 
products of the country were to be subject on their importation into Italy to the same customs regime as 
those of Eritrea. But apparently there was no exportation of these articles to Italy. 



ITALY. 
Import duties — Continued. 



407 



Tariff 
Nos. 



Goods. 



On goods 

of foreign 

origin. 



On goods On goods 
of Italian from 

origin, i Erirtea. 



Wood, barks, and scented resins ad val. . 

Antiseptic wadding and absorbent cotton do. . . . 

Dried or salted shark, and shark fins do 

Soap do 

Spices do 

Articles not specially mentioned i do. . , . 



10% 
10% 
10% 
10% 



15% 



10% 
1% 



1 All goods for which no rate is given in the column "On goods of Italian origin" are "articles not 
specially mentioned" for the purposes of that column and they pay a duty of 1 per cent when imported 
from Italy. 

Export duties. 



Goods. 


On goods 

going 

abroad. 


On goods 

bound 

for Italy. 


Animals: 

Asses, male. . . 


head (thalers) . . 

do 


2* 

5 

1E..20 

R.IO 

20 

25 

R.30 

R. 12 

20% 

1 
1 

50% 
10% 
10% 
5% 

1% 

1% 
1% 
1% 

Free. 

^2% 

Free, 

Free. 

5% 




Asses, female 




Oxen 


' head . . 


1% 


Camels 










head (thalers) 




Mules 


„ do... 






head. . 




Calves over 1 year old 






Miscellaneous 


ad val. . 




Cereals: 

(a) "Dura" 


gisla3 (thaler). . 

do.... 

do.. „, 




(b) "Mehinda" (maize) 

Vegetables, native beans 






Ambergris 


..... ......... ad val.. 






do.... 




Dried hides or skins 


do 


5% 


Native butter 


do 


Linen, native thread, native cotton tissues, manufactures of wood, tamied hides and 
skins, manufactures of hides and skins, "tungi" earthenware, mats, "magad" 
(potash salt) .. .. .. . -- - - ad val. . 




Ivorj'^, rhinoceros horns, gazelle and 
crude wax, dried or salted shark, ai 


similar horns, ostrich feathers, tortoise shell, 

id shark fins ad val. . 

, flour, alimentary products, cotton do 

spices, woods, barks, and scented resins, .do 








Sesame oil, sesame seed, myrrh, orchil, 
Coins: 

(a) Gold 






(b) Thalers 


n.d vfl.l 




(e) Nickel 




(d) Copper , 




Articles not specially mentioned 


..ad val.. 






do 


1% 


Camel fat . ... 


fin 




1% 







1 R (rupee)=$0.32. The thaler is the Maria Theresa thaler of Austria coined with date 1780 for use in 
Abyssinia and neighboring parts of Africa and worth about 50 cents. A decree of Jxine 16, 1911, ordained 
that the new silver rupee should have legal coiu"se from July 1, and that the thaler should cease to be 
legal tender on Jan. 1,'1912, After that date, debts contracted in thalers were to be paid at the rate of 
R. 1.3928 (=2.34 lire) to the thaler. Sora. Man., vol. Ill, p. 417; cf. Bol. di legis., vol. 28, p. 977. 

2 Prohibited. The prohibition was imposed in 1913. Bol. di legis., 1913, p. 1071. The previous rate 
was, male camels 5 M. T., female Ih M. T. Som. Man., vol. Ill, pp. 495-506. 

3 The gisla equals approximately 3J hundredweight. 



408 



COLONIAL TARIFF POLICIES. 



EFFECTS OF THE DIFFERENTIALS ON ITALIAN TRADE WITH SOMALIA.^* 

The tariff differentials granted in the period 1905-1909 had little 
effect in building up Italian trade with Somalia. No figures are 
available to show the amount of Italian trade before 1905, but the 
figures for 1910-11 show that at the end of the period in which 
these differentials were in force the imports from Italy amounted 
to only 4.3 per cent of the total. In 1905-6 ^^ the importation 
from Italy was only 8,800 Maria Theresa thalers out of a total of 
1,201,000 thalers. Wine and alimentary products were the chief 
item.s, and of these the Italians furnished the greater part. The 
figures for 1910-11 show that the Italian ^ines had displaced the for- 
eign, that Italy supplied the mineral waters (on which the duty was 
not differential) and that in cotton goods and in goods not separately 
enumerated Italian trade had made a beginning as foUows : 





Goods. 


Italian. 


Foreign. 


Cottons 


Lire. 
46,922 
24, 427 


Lire. 
1,367,044 




201,380 





The item of mineral waters suggests that the differential duties may 
have been minor factors in the trade situation. The ''laudable ini- 
tiative of merchants" and the exhortations of the governor and others 



6< The following table shows the changes made in the differential duties of Somalia (the smaller rate in 
each case is that on Italian goods, the larger that on foreign), those now in force appearing in the last column: 



Goods. 


Sept. 12, 
1905. 


June 29, 
1906. 


Jime 20, 
1909. 


Jan. 1, 
1912. 


Cottons — Canichi, banagar, sciader 


5%- 7% 
6%- 6% 
5%-10% 
5%-10% 
5%-iO% 
5%-l0% 
5%-10% 
5%-10% 
5%-10% 
5%-10% 
5%-10% 
B. 10-20 
B. 10-20 
10%-15% 
5%-10% 






3%-10% 


Cottons — Merican, marduf, danga. 


5%-6% 


?c') 


3%-10% 


Cottons, mercerized 




3%-10% 


Cottons im'xpd v.ith silk.. 


1 


1%-15% 


TCnit ffoods 


1 


1%-15% 


Matches 




(a) 


1%-15% 


Alimentary products, pastes, conserves, etc 




1%-15% 








1%-15% 


F]nnr Cincluding Eritreari) 




(a) 
(a) 


1%-15% 






1%-15% 


Wine in casks or demiiohns 




5%-15% 


Wine in bottles ". 






B. 10-30 











Beads 






i%-i5% 




! 


1%-15% 


Coffee 






1%-10% 


Soap 








1%-10% 


Salted shai'Jc ... 











Woods, barks, and resins 








l%-iO% 


Absorbent cotton 








1%-10% 


Eice 








1%- 8% 










1%- 6% 


Dates 








1%- 0% 










5%-10% 


Machines and parts 








5%-10% 


Salt 








5%-10% 










B. 2 - 8 


Beer, bottle 








B.IO - 1% 










B.15 - 1% 










oO%-Free 













a Valuation of ItaHan goods reduced one-seventh. 

b Goods not enumerated included in 1905 enameled iron, candles, lamps, certain sugars, etc., and in 1912 
there was added to the previous list earthen and glassware, tea, mercery, dry fish, spices, and mineral oil 
(formerly dutiable without discrimination at ra^es not exceeding 10 %), and those enumerated in the column 
above with the differential of 1%-15%. 

65 The differentials of the tariff of September 12, 1905, were in operation through this whole year. The 
fiscal j-ear begins July 1, but at that time the monsoons prevent trading on the Somali coast and tmde is 
resurned in September. 



ITALY. 



409 



to imitate the American packing and patterns may easily have been 
of greater importance. ^^ That the Italians were not satisfied with 
the results is obvious from the increases made in every preference in 
1911 and from the extension of the list to include over tv/ice as many 
articles as before. 

Differentials of 1911. — ^The preferences granted in 1911 scored one 
very striking success — so striking that it may be seen even in the 
figures for the total imports of Somalia for the years 1908-1914, and 
for the Italian share of those imports. 

Somalian imports for the period 1908-1914. 
[In thousands of lire.] 



Year. 


Total im- 
ports. 


Imports 
from Italy. 


1908-9 


2,896 
4,238 
4,299 
5,533 
6,088 
6,961 


237 


1909-10 


97 


1910-1 1 


186 


1911-12 


527 


1912-13 


2 422 


1913-14 


2 976 







The great increase of Italian trade in the period 1912-1914 is 
accounted for almost entirely by the enormous jump in the exporta- 
tion of cottons. The cottons called Bofta all came from foreign 
countries after 1911 as before, but cottons other than the Bofta 
variety now come from Italy in increased quantities^ as the following 
table shows : 

Values of certain cottons imported into Somalia. 



Year. 


Merican and Marduf. 


Canichl, banagar, 
sciader. 




Italian. 


Foreign. 


Italian. 


Foreign. 


1910-11 


Lire. 
38, 762 


Lire. 
1,217,312 


Lire. 
8,158 


Lire. 
138, 286 


1911-12 I 


1912-13 


2,054,166 
2, 546, 792 


662, 614 
318, 455 


3,439 
30,007 


438, 558 
518, 256 


1913-14 





1 The preferences having been granted in the middle of this year, the figures are omitted. 

Comparing the figures in the above tables, it will be seen that 
almost exactly 90 j)er cent of the increase in Somalian imports from 
Italy represented increased imports of cottons. One-half of the 
remaining 10 per cent was in foodstuffs, where the preference seems 
to have induced an increase of imports from Italy without decreas- 
ing those from 'foreign countries. This is shown in the following 
table : 



6« See both reports of Governor Cerrina, cited on pp. 403 and 422; also, though of later date, the Mono- 
grafie already cited, e. g., No. 14, 1914, p. 391, and Tittoni, op. cit., p. 291. 



410 COLOXIAI. TAEIFF POLICIES. 

Somalmn iiwports of foodstuffs. 



Year. 


From 
Italy. 


From 

foreign 

countries. 


1910-11 


Lire. 

25,000 
124,000 
119,000 


Lire. 
23 000 


1912-13 


32,000 


1913-14 


29,000 





Examination of the various other imports on which, the Italian 
product receiyed a preference shows that the Italian trade increased 
in one or both of the fiscal years 1912-1914^ in beer, manuiactured 
iron, earthen and glassware, yarns, and soap; but the amounts in- 
volved were small, and the foreign trade in most of these cases 
increased absolutely to a much greater extent than the Italian. It 
is unsafe to conclude more than that the preference assisted the 
Italians to start a trade in these articles. The imports of wines and 
of mineral waters from Italy increased considerably after 1911, but the 
Italians already had almost a monopoly of the market, and the 
increased preferences of 1911 did not prevent the entry of small 
c{uantities of foreign products. In articles not enumerated ^^ the 
Italian trade of 1912-13 was of smaller value than that of 1909-10, 
and was a smaller fraction of the total than in 1910-11. 

The figures show that Somalia has never imported in c^uantities 
of any conseciuence knit goods, linen made up, cotton mixed with 
silk, or m^ercerized cotton. All the other commodities mentioned in 
the list of preferences continue to be imported exclusively or almost 
exclusively from foreign sources. The figures show nothing con- 
clusive concerning machinery; but it may be observed that Gov- 
ernor de Martino justified the duty of 5 per cent on ironware and 
machinery on the ground that such quantities as were required for 
the various industrial or landed concessions were admitted, and 
would continue to be admitted free so that the rate of duty was 
unimportant.^^ He defended the retention of the duty of 3 per 
cent on Italian cottons by pointing out that a complete conquest 
of the market b}^ free Italian cottons would cost the colony one- 
fourth of its customs revenue. (This would be about one-sixth of 
the colonial income from all sources other than the State subsidy.) 

To conclude, it can not be affirmed v/ith certainty that the small 
preferences of the earlier years were responsible for particular de- 
velopments in trade which took place after their imposition. The 
much larger preferences of 1911 had one striking consequence, a 
great gain to Italian trade in cotton goods. This was at the ex- 
pense of American trade, for the success of the Italian in supplanting 
the foreign was confined to those varieties of cottons which came 
almost exclusively from the United States. The preference on cot- 
tons is among the smallest on the list and other factors than the tariff 
may have had an influence in the change; yet since nearly one-half 
of the total importation of cottons was in the hands of one Italian 
firm, as was pointed out by Comandante Cerrina in 1907, if this firm 

67 This refers to articles not enumerated in the trade returns, i. e., those articles not enumerated in the 
tariff as it stood before the changes of 1911. 

63 See Som. Man., Vol. Ill, pp. 45, 105, for the decrees defining the terms of agricultural concessions, 
and lb., Vol. II, p. 547; Vol. Ill, pp. 50, 52, 97, 99, 100, 105, lOS, 133, 171, 187, 277, etc., for specific concessions. 
These concessions generally grant exemption from import duties but in no case discriminate between 
Italian and foreign goods. See also Martino, Tre Anni del mio Governo, p. 100. 



ITALY. 411 

found that the balance of conditions had turned even slightly in 
favor of Italian goods it could produce a very considerable shifting 
of the tr^de in a very short time.^^ Italy lost this cotton trade during 
the war. The figures for the trade by articles are not available, 
but the figures for the total trade, given on page 400, show a rapid 
decrease of imports from Italy: in 1917 only 6.3 per cent of the total 
came from that country. 

^ Preferences in export duties. — Up to the beginning of the war prac- 
tically none of the exports of Somalia were recorded as having been 
shipped to Italy. '^*^ Small quantities may have reached Italy via Aden; 
but the differential export duty constituted a premium upon the 
billing of hides and gums direct to Italy if that were the real market, 
and it is not likely that the exportation to Italy via Aden reached 
any considerable amount. In other words, the differentials intro- 
duced in 1911 in the export schedules of Somalia had diverted no 
trade to Italy before the war, 

_ After Italy entered the World War, her demands took most of the 
hides of Somalia. The Italian figures for 1915 show an importation 
of 823,000 lire of cattle hides, and 10,000 lire of other hides. After 
May 1, 1917, the export of cattle, sheep, and goat skins from Somalia 
was prohibited unless the destination was Italy. ^^ Just before this 
time, hides and skins tanned in the colonies were exempted from 
the Italian import duty — but tanned hides constitute an insignificant 
part of the total export from Somalia.'^^ It is obvious that the cir- 
cumstances and legislation of the war diverted the trade— at least 
temporarily — into new channels into which the differential export 
duty had shown little prospect of bringing it. 

THE PROTECTORATES OF NORTHERN SOMALILAND. 

The Protectorates of Northern Somaliland cover an area of over 
65,000 square miles, but the population is small and the commerce 
insignificant. The foreign minister, Tommaso Tittoni, said in 1904: 

I do not anticipate any future for Italian Northern Somaliland, which consists in 
a great measure of unproductive sands. ''^ 

Piazza alone gives any figures, other than round number totals, for 
the trade of this region. He gives the total trade as 4,000,000 lire 
for Mijertina, and 3,000,000 for Obbia, and names the following 
exports, but cites no authority and names no particular year:^^ 

Lire. 

Incense - 500, 000 

Gums 400, 000 

Cattle 200, 000 

Resin. 187, 000 

Skins, ostrich feathers, mother-of-pearl 250, 000 

Myrrh 17, 000 

Ambergris 34, 000 

Salt .......-.-., 56, 000 

69 Mimstero degli Affari Esteri, 11 Benadir, p. 117. The finn was the Society Coloniale Italiana. 

'0 The trade statistics of Somalia show exports to Italy of less than 1,000 lire worth of gums in 1912-13 
and about 3,000 lire worth of liides in that and in the following year. ( Total exports of hides and skins were 
over a million lire each year. ) The Italian figures show imports from Somalia of 15,000 lire worth of gums, 
in 1912 and of 1,000 in 1913; and of hides in successive years, beginning with 1911, of 10,000, 19,000, 23,000, 
and 8,000 lire. 

71 Governor's decree of Apr. 12, 1917, Bol. di legis., 1917, p. 497. These three kinds constitute about 
two-thirds to three-fourths of the total. 

73 1b., 1917, p. 219. Deereto Luogotenenziale, Feb. 11, 1917. The exemption was limited to the dura- 
tion of the war, and to hides and skins tanned without the hair. 

" Tittoni, Italy's Foreign and Colonial Policy, p. 240. 

'4 Piazza, Giuseppe: U Benadir, 1913, p. 192. 

185766°— 22 27 



412 ' COLOITLiL TARIFF POLICIES. 

The suzerainty of Italy over the Protectorates of Northern Somali- 
land was still purely nominal after 20 years of possession, and has 
made no great progress since. In 1913 Piazza wrote that no Euro- 
pean had even penetrated the country except in the yicrinity of 
Cape Guardafui, v/hich forms the extreme northeast corner, and 
there only to a little distance. Italian writers give these Protecto- 
rates some attention in their historical chapters and thereafter as a 
rule scarcely mention them. 

There are three of these Protectorates, namely, the Sultanate of 
the Mijertines, the Territory of Nogal, and the Sultanate of Obhia. 
The one to the north (Mijertina) was not clearly under Italian 
protection until 1901.^^ In the treaty of 1901 the Sultan of the 
Mijer tines and his chiefs ''^ agreed to raise the Italian flag, to pro- 
tect commerce and wrecked property, and not to land a single 
cartridge without permission. Again, in 1910, a convention of 
chiefs was held at which Italian protection was recognized, and it 
was agreed that certain disputes should be referred to the Italians 
for settlement." No mention is made in this treaty, nor in any of 
the discussions relating to the subject, of any tariff in Mijertina, 
but it may be assumed that some payment is made on the landing 
of goods. 

The treaty of April 7, 1889,^^ placed that portion of the Territory 
of Nogal, the ownership of which had been disputed by the Sultans 
of Obbia a.nd the Mijertines, under Italian protection, but for those 
of his possessions which were left undisputed Sultan Osman !Mah- 
mud Jusuf promised only that he would make no treaties or con- 
tracts with other governments or persons, and that he would protect 
Italian subjects— i. e., it made the territory a sphere of interest 
rather than a protectorate.^'^ The Mullah, Sayed Mohammed, who 
was recognized as ruler of Nogal in 1905, agreed to suppress the 
trade in slaves and arms and to let the Italians settle his disputes 
^\ath his neighbors, to maintain a resident v/ith a guard, and to 
establish customhouses. 

A residency was established in Obbia in 1909, and the Italian Govern- 
ment undertook to pay 2,400 Maria Theresa thaiers per month toward 
the maintenance of a force of 600 askaris, armed and trained in the 
Italian manner .^^ After the death of Sultan Jusuf illi, a declaration 
was obtained from his son Ali Jusuf, renewing previous obligations, 
recognizing explicitly Italian jurisdiction over his armed forces and 
his quarrels. By this the Sultan undertook to establish no duties 
or taxes higher than 10 per cent on imports; none on exports, except 
10 per cent on ostrich feathers, m}Trh, gums, and horns, 1 rupee 
for each corgia of 20 sheepskins or goatskins, and one-fourth of a 
rupee on each oxhide or each corgia of digdig skins; and none other.^^ 

The obligations of these rulers in regard to imports of alcohol and 
of arms, and in regard to the slave trade, have been dealt with under 
the general section on treaties. 

For the oversight of these Protectorates, there was created a spe- 
cial office, the Commissariato della Somalia Settentrionale. The 

» Treaty of Aug. 18, 1901, Som. Man., Vol. I, p. 56. 

" The treaty was signed by the Sultan and 12 others. 

" Piazza: Op. cit.,p. 187. 

"n).,p. 53. 

" See Piazza: Op. cit., p. 175. 

BO Piazza: Op. cit., p. 187. 

" Som. Man., Vol. I, p. 64, Martino, Tre Anni del mio Govemo, p. 45. 



ITALY. 413 

duties of this office were assigned to the consul at Aden, until legis- 
lation of April 5, 1908, placed the office under the governor of Soma- 
lia; ^2 since then they have had the attention of a separate commis- 
sario. For awhile this commissario resided alternately at Obbia 
and Aden, but since Obbia agreed to admit a resident, and since 
the wireless communications have been completed, this official has 
resided at Bender-Alula.^^ 

LIBIA. 

SITUATION AND COMMERCE. 

In area and in the character and number of the population, Libia 
is easily foremost among the Italian colonial possessions. It is, 
however, of so recent acquisition, and the conditions which have 
prevailed during the whole period of Italian possession have been 
so abnormal that no adequate estimate of- its actual and 'potential 
importance can be based on the statistical returns at present avail- 
able. The interior had not yet been fully pacified when the World 
War began. During the war most of the region was contested, and 
the Italians did not gain full possession until 1919.^^ Under these 
circumstances trade, particularly in exports, suffered greatly, and 
the returns show that in recent years Libia has exported much less 
than Eritrea. 

The caravan trade with the central Sudan and the Sahara formerly 
played a conspicuous part in the commerce of Libia. This had de- 
clined, however, before the Italian occupation, as a result of the 
earlier establishment of good government and the building of rail- 
ways in Algeria, Senegal, Nigeria, and the Anglo-Egyptian Sudan, 
to which regions the trade was diverted. Military operations inter- 
rupted and for the time being terminated the caravan trade ; but the 
Italians consider Libia the natural outlet for a great area of the Sudan 
and Sahara and believe that when railways are built to such points 
as Gadames, Ghat, and Tommo, a large part of this trade will be 
recovered.^^ 

The chief imports and exports of the two provinces and the Italian 
share of the trade are shown in Tables 13 to 16, inclusive. The year 
1913 is perhaps the least abnormal^® of Libia's recent history, and 
1917 is the latest year for which figures are available. 

82 Som. Man., Vol. Ill, p. 5, art. 3. 

83 Annuario Statistico Italiano, 1914, p. 445. Bender-Alula is a former capital of Mijertina. Piazza, who 
devotes a separate chapter to the Protectorates, says that the plan was to put the commissario at Bareda. 

84 For events in Libia up to the armistice, see the Peace Handbooks published bv the British Foreign 
Office, No. 127, pp. 25-30. 

85 The trade of Cirenaica with the oases in 1917 v/as: Imports, 1,868,000 lire; exports, 1,182,000 lire; total 
3,050,000. One-half of the imports consisted of specie and scrap silver and over half of the exports of cotton 
textiles. Relazione sulla Situazione, 1918, p. 197. " It is certain that this (caravan) trade can never 
recover its former activity."— (Peace Handbook, No. 127, p. 53.) 

83 But, e.g., sponge fishing off the coast of Cirenaica was entirely suspended , no licenses being granted for 
fishing, though better results are ordinarily obtained there than off the coast of Tripolitania. The trade 
figures of Cirenaica for 1917 indicate that sponge fishing was still suspended. Sponge fishing is largely 
in the hands of Greeks and Italians. See Daily Consular and Trade Reports, October-December, 1914, 
p. 290. 



414 



COLONIAL TARIFF POLICIES. 

Table 13. — Imports into Cirenaica} 
[In thousands of lire.j 



Imports. 



Cereals, flours, etc.s 

Spirits, beverages, essences, and oils 

Animal and fish products 

Colonial products and drugs 

Cotton yarn and textiles 

Wool and woolen manufactures 

Wood and wooden manufactures... 

Paper, pasteboard, and rags 

Chemical products and explosives. . 

Leather goods 

Metals and metal manufactures . . . . , 
Miscellaneous 

Total....* 



1913 



1917 



Total. 



1,950 

1,681 

1,202 

1,190 

874 

321 

190 

190 

182 

151 

161 

557 



From 
Italy. 



1,080 
1,148 
1,002 
189 
630 
112 
141 
186 
131 
90 
126 
235 



Total. 



13,766 
4, 240 
2.691 



867 



145 
59 
349 
619 
161 
326 
1,037 



8,649 3 5,070 27,426 « 22, 494 



From 
Italy. 



11,690 

3,031 

2,678 

2,351 

770 

90 

53 

343 

521 

145 

310 

512 



1 Ministero delle Colonie, Bollettino di Informazioni. Vol. VI, No. 1. 

2 The classification used in 1912-1914 differs from that used in 1915-1917 so that the items for 1913 and 1917 
are frequently comparable only in a rough way. For instance, the figures for 1913 include hair with wool; 
rushes, osiers, and musical instruments with wood; feathers with leather; and sugar with colonial products. 
These figm'es exclude specie, military and other government supplies, and the tobacco of the state monopoly. 

3 Or 58.6 per cent. 
< Or 82 per cent. 

Table 14. — Exports from Cirenaica} 
[In thousands of lire.] 



Exports, 


1913 


1917 


Total. 


To Italy. 


Total. 


To Italy. 




602 


246 


859 
81 
21 
14 


859 


Wool, washed 


81 




} 28 
2 


( 


21 


Other rags. . . 


1 


14 


Woolen carpets 


^ 




Hair carpets 




100 
/ 73 
i 37 

34 

378 

130 
18 
39 
65 
32 

117 
54 

196 




Cattle liides, dry 


} 230 

j . 

1 93 


188 


58 


Cattle hides, other . . 


37 


Camel hides 




Horsehides 




/ 




Sheepskins 


378 


Goatskins 


1 


130 


Other hides . . . 




4 


Horses 


49 
16 
55 


40 

8 


39 


Horns and bones 


32 


Native butter 




Scrap iron 




117 


Scrap, other metals 






54 


Miscellaneous 


63 


29 


82 






Total 


1,173 


2 511 


2,248 


3 1,908 







iMinistero delle Colonie, Bollettino di Informazioni. A^ol. VI, No. 1. 
2 Or 43.6 per cent. 
8 Or 89. 3 per cent. 



ITALY. 



415 



Table 15. — Imports into Tripolitania.^ 
[Tn thousands of lire.] 



Imports. 



1913 



Total. 



From 
Italy. 



1917 



Total. 



From 
Italy. 



Cereals, flours, etc.2 

Spirits, beverages, essences, and oils 

Animal and fish products ."TI . . . 

Metals and metal manufactures 

Cotton yarns and textiles 

Colonial products and drugs 

Nonmetailic or combustible minerals, and ceramics 
Miscellaneous , 

Total 



6,906 
3,525 
3,244 
3,263 
1,921 
2,946 
1,111 
3,383 



2,931 

1,548 
677 
757 
221 
23 
481 
916 



15,880 
5,414 
2,100 
400 
2,068 
3,400 
652 
3,084 



10,035 
4,592 
1,838 

298 
1,130 
1,274 

468 
2,243 



26,299 



3 7,554 



32,998 



21,878 



1 Ministero delle Colonic, Bollettino di Informazioni. Vol. VI, No. 1. 

2 See footnote 2, Table 13. 

3 Or 24.9 per cent. 

4 Or 66.3 per cent. 

Table 16. — Exports from Tripolitania} 
[In thousands of lire.] 



Exports. 


1913 


1917 




Total. 


To Italy. 


Total. 


To Italy. 


Sheepskins . 


} 269 
230 


83 
169 


/ 550 

t 482 
285 
154 
175 
228 
194 
29 


550 


Goatskins ... . 


481 


Cattle hides 


285 


Camel hides 


41 


Tanned hides or skins from the Sudan 


376 
112 






Wool, washed. 


49 


228 


Wool, not washed 


194 


Hair 


48 
131 
262 
932 
554 
350 


4 


29 


Native butter 




Feathers 


4 
61 

26 

1 






Raw sponges 


143 

362 


140 


Henna.. ... 




Alfa ( esparto grass") 




Dates...... 


19 


19 


Mixed textiles 


153 

9 

24 

234 






Cotton textiles .. 


2 


" 




Woolen textiles 


317 


33 


Miscellaneous 


61 


196 






Total 


3,684 


2 460 


2,971 


' 2, 196 







1 Ministero delle Colonle, Bollettino di Informazioni. Vol, VI, No. 1. 

2 Or 12.5 per cent. 
» Or 73.9 per cent. 

TARIFF HISTORY. 

Italy's acquisition of Libia is of so recent a date that there is little 
to record as tariif history except the numerous prohibitions and 
restrictions which have resulted from the war. Without going into 
these in detail, it may be noted that as early as August 2, 1914, the 
governors of the two provinces were authorized to forbid the exporta- 
tion by land or sea of goods of any kind; that many prohibitions 
appeared in the same month ; that all goods whose export from Italy 
w^as forbidden came under a like prohibition in Tripolitania; that 
charcoal might not be exported even to Italy and the other colonies; 
nor the breadstuff s of Tripolitania even to Cirenaica; that special 
licenses v/ere required in Italy for the exportation of many articles 
to the colonies; and, finally, that previous authorization was 



416 



COLOl^IAL TABIFF POLICIES. 



r^uired in the colony for tlie importation of anything from any 
foreign country.^' 

Omitting those tariff provisions which are still in force or appar- 
ently only suspended for military -reasons, there are but three items 
to record. The earliest tariif provision promulgated (except a free- 
trade proclam_ation which was in force only a few weeks) was a pro- 
hibition of the exportation of animals, by decree of October 10, 1911.^^ 
This was modified in 1913 to allow the export of cattle and sheep 
from Cirenaica on payment of 1 per cent, and in 1915 this provision 
was extended to Tripolitania and the general prohibition was 
repealed,^^ 

By decree of the governor, April 22, 1912, a specific duty (addi- 
tional to the ad valorem duty fixed hj^ decree of Dec. 10, 1911) was 
put on liquors, but the operation of this was suspended in August of 
the same 5^ear after protests by the powers. The duties were 30 to 
60 lire per hectoliter or 60 centesimi per bottle on mne, and 7 lire 
per hectoliter or 10 centesimi per bottle on beer.^^ 

By a royal decree of December 31, 1912,^- sugar was to pay 15 lire 
per quintal in addition to the ad valorem duty. Italy was sending 
Libia no sugar and the increase was for purposes of revenue. Italy 
had already denounced the Brussels sugar convention, but this 
denunciation had not yet come into force. And after it came into 
force, the present differential duty was not imposed until more than 
a year had gone bj^.^^ 



RATES OF THE PRESENT LIBIAN TARIFF. 



The tariff in force in Libia, with the dates when the different pro- 
visions were decreed, and when they became effective if that was 
later, is as follows: 

Import duties. 





Articles. 


Date of decree ana 
references. 


From all sources. 




Duty (percent). 


Goods not eniunerated . 


aT). G. Dec. 10, mi. 
Bol. dilegis., 1912, p. 
473. 


n 


Barley . . . 


4 


Corn 




4 


Rice 


4 


Floiu'.. . 


4 


Alimentary pastes ' 


4 


Drvflsh .. i 


4 


Coffee 


4 


Tea : i 


4 


Kerosene 






4 



a D. G.= Governor's Decree; D. M.= Ministerial Decree: R. D.= Royal Decree; D. L.= Lieutenant's 
Decree, issued during the war by Thomas of Savoy, Duke of Genoa, in behalf of the King. 

87 Bol. dilegis., 1914, p. 533, 966; lb., 1917, p. 320, 743; lb., 1916, p. 706; lb., 1918, p. 302. 

88 lb., 1912; p. 472. 

89 lb., 1913, p. 526, May 8; 1916, p. 150, Dec. 12. 

90 B. I. d. D., 1912-13, No. 186. 

91 Bol. di Legis., 1913, p. 16. 

92 Denoimced Aug. 26, 1912, to take effect Sept. 1, 1913. Brit, and For. State Papers. Vol. 106, p. 1078. 
The differential duty was imposed Nov. 1, 1914. 



ITALY. 



417 



Import duties — Continued. 



Articles. 



Date of decree and 
reference. 



Of Italian 
origin. 



Duty 
(lire). 



Of foreign 
origin. 



Duty 
(lire). 



Wine, duty additional to the ad valorem duty of 11 per cent. 

Hecto. (Above 12°^ there is the duty on alcohol in addition, 

reckoned on the basis of one liter of alcohol for each degree 

per hectoliter.) 
Articles subject to an ad valorem duty of 8 per cent, with 

additional specific duties: 

Cotton yarns: 

(a) Unbleached 100 kilos gross.. 

(b) White do. . . . 

(c) Dyed or mercerized do 

(d) Sev/ing (cucirini) 100 kilos. 2. . 

Cotton tissues: 

(a) Unbleached 100 kilos gross. . 

(b) White do. . . . 

(c) Dyed or mercerized 100 kilos 2. . 

(d) Printed .do.2. . . . 

(e) Dyed or printed for barracans ^ do.2 

Articles of cotton, sewn or made up: 

(a) Barracans do.2 

(b) Others. .do.2. . . . 

Woolen yarns: 

(a) Unbleached do.2 

(b) White or dyed .do.2. . _ _ 

Tissues of carded or combed wool: 

(a) For barracans do.2 

(b) Others do.2. . . 

Woolen fezzes each. . 

Blankets, carpets, and sewn woolen goods ... 100 kilos 2. . 
Sugar, raw or refined do 



R. D. Aug. 13, 1914. 
lb., 1914, p. 532. 



R. D. Nov. 1, 1914 
(Nov. 9). lb., 1914, 
p. 987. 



Free. 



Free. 
Free. 
Free. 
Free. 

Free. 
Free. 
Free. 
Free. 
15 

25 
Free. 

Free. 

5 

20 
Free. 
Free. 

20 



10 
15 
20 
3,5 

15 
20 
35 
40 
35 

50 
40 

35 

45 

60 
45 

0.2 
60 
23 



2 Tare: 8 per cent, which will be accorded only in respect to goods packed in receptacles of wood and of 
metal. 

3 Barracans are the unsewn, toga-like outer coverings worn by the Arabs. 

Free list. 



Articles. 


Date of decree and reference. 




\D. G. Mar. 21, 1912. Bol.dilegis., 1912, 
/ 477. 
D.G.Apr. 22, 1912. lb., p. 478. 


Silver, unworked 




Lime 






Coal 








Straw 






R. D. June 14, 1914. lb., p. 478. 
R.D.Nov. 1,1914. lb., p. 967. 


Tanned goat skins for reexport 

Agricultural machinery and implements 


Materials for drilling wells 




Cereals for planting ,. 








Live plants, with some exceptions 




Chemical fertilizers . . .. . . 






D. L. Aug. 30, 1917. lb., p. 743. 


Machinery, etc., for stock raising, beekeeping, silk culture, and 

poultry raising. 
Seeds in general .. 


Grafts and shoots of plants except of vines .. . .. ... .... 
















Breeding animals, bees, silkworm eggs, etc 

By-products for stock feeding, including oilcake and beet cake . . . 

Nets and implements for fishing (until 6 months after the war).. 

Books and other publications in the Italian language and printed 
in Italy. 

All machinery, parts, and accessories required by industries en- 
gaged in working the natural products of Libia (for 10 years). 


D. M. June 13, 1918. lb., p. 464. 

D. L. Apr. 24, 1919. Bol. Ufficiale, 

1919, p. 199. 
R. D. Mar. 13,1919. Bol. dilegis., 1919, 

p. 289. 


Briquettes and coke 




Fuel oil 


- 


All fertilizers 




Tanning materials 









418 



COLOITIAL TARIFF POLICIES. 
Monopolies. 



Articles. 



Date of decree and reference. 



Tobacco: Not oA'er 2 kilograms may be imported for personal con- 
sumption at — 

Habana cigars or cigai'ettes, L. 60 per kilo 

Other manufactured tobacco, L. 30 per kilo 

Salt: No export or import except by the State 

Matches 



D. G. Nov. 1, 1911. Bol.dilegis., 1912, 
p. 514. D. G. Feb. 29, 1920. Gaz- 
zetta UfRciale, Mar. 10, 1920. 

D. G. Dec. U, 1911. Bol. di legis., 1912, 
p. 515. 

D. Lr. June 5, 1917. lb., 1917, p. 575. 



Prohihitions of importation. 



Articles. 



Mechanical lighters 

Opiates 

Saccharin , 

Arms and munitions 

Except arms for personal defense by Italians holding police licenses 
Plants and animals are subject to various sanitary inspections, 
conditions, and prohibitions. 



Date of decree and reference. 



D. G. July 17, 1917. Bol. di legis., p. 

880. 
D. G. Mar. 15, 1912. lb., 1912, p. 476. 
.D. G. Apr. 5, 1912. lb., p. 477. 
R. D. Mar. 21, 1912. lb., p. 1109. 
,D. G. Sept. 24, 1915. lb., 1916, p. 73. 
Various. 



Export duties. 



Articles. 



Date of decree and reference. 



Duty. 



Sponges, washed 

Spong9S, unwashed . . 

Cattle (Cirenaica) 

Sheep (Tripolitania) . 

Horses 

Camels 

Henna (Tripolitania) . 
Alfa (Tripolitania) . . . 
Antiquities i 



On the first 500 lire of value 

On the second 500 lire of value 

On the third 500 lire of value 

And so on up to 

Export of unbaled rags is forbidden 



;\R.D.Mar.27, 1913. Bol. di legis., 1913, 
i/ p. 429. 

R. D. May 8, 1913. lb., 1913, p. 526; 
1916, p. 1.50. From Dec. 20. D. L. 
Dec. 12, 1915. 

R. D. July 13, 1914. lb., 1914, p. 478.. 

R. D. Jan. 8, 1914. lb., n. 108 

R. D. Sept. 24, 1914. Bol. Ufficiale, p. 
1019. 



D. G. May 15, 1912. Bol. di legis, 1912, 
p. 476. 



20 lire per quintal. 
10 lire per quintal. 
1 per cent. 
1 per cent. 
5 per cent. 

3 per cent. 

4 per cent. 
3 per cent. 



5 per cent. 
7 per cent. 
9 per cent. 
20 per cent. 



1 Antiquities may be exported only with the authorization of the governor. (The phraseology of this 
decree is similar to that of the Italian law of June 20, 1909, except that that reads 5,000 lire instead of 500.) 

In addition to the free list the customs regulations provide for the 
free admission of the effects of Government employees^ travelers, 
colonists, theatrical companies, consuls, religious missions, etc. The 
agricultiu"al tools and the personal effects of Italian or native 
peasants or laborers temporarily employed in the colony are likewise 
admitted free; so also are military supplies of Italian production or 
^'nationalized" in Italy.^^ 



COXCEALED DIFFERENTIAL IN THE APPLICATION OF THE TARIFF. 

No open differentials appeared in the Libian tariff until the summer 
and autumn of 1914.^* A concealed preference, however, had pre- 
viously been in operation and has continued since the introduction 
of the differential duties. This preference consists in the under- 
valuation of Italian goods for the levying of the ad, valorem duties.®^ 

93 Decree of Mar. s, 1915, art. 38, Bollettino di Informazioni, Vol. Ill, pp. 209-237. 

'< There are also open ditferentials in the anchorage dues, the rate on foreign steamships being 1 lire per 
ton while that on Italian vessels is only one-half that amount. Italian vessels may compound these dues 
for II lire per ton per year. Decree of June 29, 1913. Bol. di Informazioni, 1913, Vol. I, p. 249. 

B5 These valuations are used also for the trade statistics; thus the values given in these statistics imder- 
state the amount of Italian trade. 



ITALY. 419 

A recent consular report speaks of it as applicable to goods imported 
in Italian vessels and it is clear that foreign goods which have paid 
duty in Italy share in the preference.^^ The extent of this preference 
and the date of its origin can not be determined with precision from 
the available material; indeed, as the preference is not established 
by law, there is probably no uniformity in its application. A British 
consular report on the trade of Bengasi for the year 1913 states that 
in many cases the valuation of Italian goods was only 50 per cent of 
the invoice price.^^ 

Effects. — The effects of th^ openly differential rates and of the 
concealed preferential treatment of Italian goods can not be deter- 
mined with accuracy, both because of the lack of the necessary sta- 
tistics and because of the abnormal trade conditions which have 
existed during the whole period of the Italian occupation. As the 
available trade figures give values only and not quantities, they throw 
no light on the question of the undervaluation of Italian products; 
nor do the figures give separately all of the items on which there are 
open differentials. It is easy to see that the open differentials fall 
on a considerable fraction of the total imports, and that the rates of 
these differentials are by no means negligible. Cottons constitute 
some 5 to 10 per cent of the total imports ;^^ and woolens, sugar, and 
wines are im_portant articles of trade. The differential on sugar 
comes to IJ cents per pound and on cotton and woolen yarns and 
textiles to 1 to 4 cents a pound. 

The figures show that the Italian share of the total imports in- 
creased in Tripoli tania from 25 per cent in 1913 to 66 per cent in 1917; 
and in Cirenaica, from 59 per cent to 82 per cent. These figures by 
themselves show a striking growth of Italian trade, but in view of the 
abnormal times this growth can not be ascribed chiefly to differential 
rates. The imposition of the open differentials was almost coinci- 
dent with the outbreak of the war, which soon resulted not only in 
cutting off from the Libian market German and Austrian goods, but 
also, because of export embargoes and lack of shipping, in hampering 
the trade of other countries. Italian shipping monopolized trans- 
portation.^^ In Libia itself there were military operations on a con- 
siderable scale, and the economic life of Tripolitania was especially 
disturbed. 

s6 Commerce Reports, Oct. 4, 1919. 

97 Dii)lomatic and Consular Reports, No. 5426. Report for the year 1913 on the trade and commerce of 
Bengasi, p. 4. Customs regulations quite commonly require that the invoice value be increased by the 
addition of freight and insurance. 

58 The British consular report cited immediately above states that cottons constitute four-fifths of the 
imports of Bengasi, the most important port of Cirenaica. The published figures for 1913 make cottons 
only 10 per cent of the total. While the cotton trade of the province may be concentrated at Bengasi, the 
discrepancy suggests that the Italians were undervaluing their cottons more sharply than other products. 
Their particular interest in cottons is seen in the imposition of open differentials upon them, and in the si)e- 
cial provisions made in 1917 for their transportation. A decree of Sept. 20, 1917 (Ministero delle Colonie, 
Bollettino Ufficiale, 1917, p. 708), authorized the navigation company Sicily to increase the war surcharge 
upon the freight rates of 1912 from the 100 per cent previously authorized to 200 per cent, except that the 
surcharge on the rate on cotton textiles was to remain at 25 per cent. This provision applied to transporta-- 
tion to and from Libia, Tunis, and Malta, and to the coasting trade of Libia. 

59 E . g. , in first half of 1915, entrances and clearances in the ports of Libia were: Italian steamers, 3,039,406 
tons; Italian sailing vessels, 24,850 tons; foreign sailing vessels, 5,124 tons. Bol. di Informazioni, 1915, 
p. 543. But even in 1913 82.5 per cent of the tonnage calling at Tripoli and Bengasi was Italian. 
Pea-ce Handbook, No. 127, p. 44. 



420 



COLOIs^IAL TAEIFF POLICIES. 



Again, the enormous excess of imports over exports, even greater 
in 1917 than in 1912/ shows clearly that the situation is abnormal — - 
the imports represent chiefly foreign investments, expenditures for 
public works, and military and other Government supphes ^ rather 
than the exchange of commodities. Trade due to these factors is as 
a rule chiefly with the mother country. In the absence of detailed 
statistics of the trade and of precise information as to the activity 
of the armies and of other branches of the Government, and as to 
the extent of possible foreign competition during the war, it is im- 
possible to state what proportion, if any, of this growth in Italian 
trade with Libia is to be ascribed to the differential treatment, open 
or concealed, of Italian trade. 

PREFERENCES IN ITALY TO PRODUCTS OP LIBIA. 

No general reduction in the Italian tariff has been accorded to 
products of Libia, On a single item only has the duty been removed. 
By a decree of February 11, 1917, tanned hides and skins from ail the 
Italian colonies were to enter Italy free for the duration of the war. 
Those tanned in the Sudan and imported through Libia enjoyed the 
same favor. The trade figures for 1917 show that this exemption 
-from duty did not divert these Sudanese products to Italy from 
other markets (chiefly the LTnited States) ; Libia exports practically 
no other tanned hides and skins. 



Appendix. 

the dodecanese. 

Situation and commerce. — The Italians have no colonies outside of 
Africa, but some reference should be made to their administration 
of the group of islands, known as the Dodecanese, which lie in the 
eastern Aegean, off the coast of Asia Minor. After the war with 
Turkey in 1911-12, Italy remained in temporary occupation of the 
Dodecanese. By the Treaty of Sevres, 1920, Greece was to acquire 
title to the islands with the exception of Rhodes; and, though no 
power has ratified the treaty, this provision has been put into ejffect. 





Trade. 


Tripolitania. 


Cirenaica. 




1912 


1917 


1912 


1917 


IniBorts . . . 


Lire. 

27,782.000 

4,029,000 


Lire. 

32,998,000 

2,971,000 


Lire. 
6,465,000 
746,000 


Lire. 
27,426,000 
2,248,000 









1 There is no reason to suppose that exports from Libia are undervahied: hence the undervahiation of Ital- 
ian imports, which form the jrreater part of the total given in the official figures, conceals the full extent of 
the excess of imports over exports. It also minimizes the proportion of the total trade which the Italians 
enjoy. 

2 Military supplies ordered by the Government or sold to the Grovernment before their arrival in Libia 
are not include'd in the commercial figures. The value of such supplies imported in 1912 was estimated by 
Italian journals at §11,000,000, i. e., more than twice the commercial imports of Tripolitania in that year. 
But great quantities of commercial imports also were for military purposes: e. g., the American consul esti- 
mated that more than half of the imports from the United States were directly traceable to military uses. 
He valued these imports at S430,000 to »510,000, though as they all came through Italy, Germany, etc., the 
United States did not appear in the official statistics as a source of imnorts. Daily Consular "and Trade 
Reports, April-June, 1914, p. 1176; October-December, 1914, pp. 290, 297\ 



•^^ ITALY. 421 

By the treaty Italy agreed further that if and when Great Britain 
ceded Cyprus to Greece, a plebiscite in Rhodes should determine 
whether that island also should be transferred to Greece. 

Rhodes is the most important of the islands,^ with a population 
in 1917 of 36,500. Colymus and Cos have about 15,000 each; Sjmie, 
Scarpanto, Nisyros, and Leros from 4,000 to 7,000 each; and the 
largest of the others, Patmos, only 2,664. The population is almost 
entirely Greek except for 10,000 Moslems and Jews in the city of 
Rhodes and some Moslems in Cos.^ The total population is 100,000. 
No figures for trade are avaiiaMe. 

The administration of these islands appears to be directed by the 
commander in chief of the corps of occupation; at least, all the de- 
crees have been issued in his name. 

Tariff liistory, — ^The tariff legislation for these islands for the first 
four years of the Italian occupation is conveniently summed up in the 
BoUettino di Legislazione for 1916, pages 339-343. From this it 
appears that the Italians have, in general, continued in force the 
Turkish rates of 11 per cent on imports and 1 per cent on all exports 
of products not made from materials which had paid the import 
duty. The only changes at first were that Turkish goods were classed 
as foreign, and that the rate on barley, corn, flour, and coal was 
reduced to 5 per cent. The general rate rem.ains at 11 per cent, but 
many items have been given specific rates, and a number of excep- 
tions and exemptions have been introduced,^ 

Changes made since the establishment of the tariff of July 5, 1912, 
are as follows: 

Eleven classes of jewelry and precious stones were given specific 
rates; e. g., 2 lire each on gold watches.® 

Wheat, flour, and bran were given specific rates, corresponding, 
for the first two, to the special rate of 5 per cent which had been given 
to them previously.'^ 

A few days later, specific rates were put on animals, on the basis 
of the 11 per cent rate, but the temporary exemption accorded to 
cattle, sheep, swine, and goats in August of the same year v/as still 
in force in 1916.® 

The free list includes common wood, fresh fish, eggs, milk, ferti- 
lizers, firewood, charcoal, periodicals and books, and a few others.^ 
The regulations in regard to temporar}- importations of raw sponges 
for reexport have been abolished in favor of the much simpler system 
of free entry.'*^ 

The only exceptions to the general rule in regard to exports are 
that the rate on wheat, flour, and bran has been made specific, and 
exemption has been accorded to tanned skins, soaps, and oil of olive 
husks." 

Since 1916, there have been very few changes in tariff rates. The 
rates on grano turco and on its flour were made specific, at one lira 

« Taken May 5, 1912; the other 11 islands were occupied not long afterwards. La Libia negli Atti del 
Parlamento, pp. 1452, 1457. 
* Annuario Statistico, 1916, p. 438. Rome, 1918. 

5 Decree of July 5, 1912. On June 22, the rate on coal, firewood, and flour had been reduced to 5 per cent. 
« Decree of Mar. 16, 1914. These had also had special rates under the Turkish tariff. 

7 Decree of Mar. 24, 1914. 

8 Decrees of Apr. 5, Aug. 11, and Aug. 30, 1914. 

9 Decrees of July 5, 1912, May 30 and Sept. 23, 1913, and Jan. 10 and Apr. 27, 1914. This last concerning 
wood was to aid the boat-building industry. 

10 Decree of Aug. 5, 1914. 

11 Decrees of July 5, 1912, Feb. 14 and June 20, 1914. These exemptions were temporary, but were still 
in force in 1916. 



422 COLONIAL TAEIFF POLICIES. 

per quintal, in 1917 and 1918, respectively.^^ From April 1, 1919, 
the duty on cereals, flours, semolina, and rice was suspended.^^ By 
the same decree a statistical duty was levied on practically all im- 
ports and exports, at the rate of lira 0.10 on each animal or vehicle, 
on each ton of wine, coal, wood, stone, cement, scrap iron, etc., 
and on each quintal of other articles with a few exemptions. 

The export trade was sharply restricted during the war, but by 
direct prohibition, not by tariff changes. By decree of May 20, 1915, 
the exportation of arms, foodstuffs, animals, fuel, and medicines was 
prohibited, and later decrees enlarged the list.^* Shipment to Italy 
or to the Italian colonies, however, was not considered exportation 
within the meaning of the prohibition. 

The importation, exportation, sale, and possession of hashish was 
prohibited by decree of April 10, 1918.^^ 

The only differential duty found in the Dodecanese consists in the 
provision which allowed tobacco free entry ^^ after the Italian Govern- 
ment monopoly in tobacco had been substituted for the Turkish. 
This regulation doubtless should be regarded as a fiscal rather than 
a tariff provision. 

Bibliography. 

[See also the general works listed on p. 835 and the texts of treaties listed on p. 834.] 

OFFICIAL WORKS. 

Direzione Centrale degli Affari Coloniali. Manliale di legislazione della Somalia 
Italiana. 3 vol. Rome, 1912-14. 

Contains a complete index of all the deci-ees, ordinances, laws, treaties, etc., concerning Somalia 
Italiana from the beginning of the Italian possession, and the text of those adjudged to he of perma- 
nent interest. It closes with the decrees establishing the ministry of the colonies, Nov. 20, 1912. 

Ministero delle Colonie. Manuale di legislazione della Colonia Eritrea. Edited by 
Prof. Angiolo Mori. 8 vol. Rome, 1914-15. 

A similar collection of documents for Eritrea. Each volume contains a chronological index, and 
volume eight is devoted to chronological, analytic, and alphabetic indexes. 

Ministero delle Finanze, Direzione Generale delle Gabelle. Bollettino di legisla- 
zione e statistica doganale e commerciale. Rome, annually from 1884. 

Issued every month or two, with indexes for each number and for the year. Contains commercial 
treaties, tariffs, amendments and rulings concerning tariffs; also information on taxes on manufec- 
turing, on state monopolies, and more general articles and statistics on prices, production, etc., not 
only for Italy but for all countries and colonies. iMany of the treaties ai-e in French. 

Ministero degli Affari Esteri, continued by Ministero delle Colonie. Monografie e 
Rapporti Coloniali. Rome, 1912 and later, 2 volumes a year. 
These monographs are largely on agriculture, botany, ethnology, etc., but a few relate to commerce. 

Ufficio Centrale di Statistica. Annuario Statistico Italiano. Rome, annually [but 
only one issue between 1902 and 1911]. 
Contains a few statistics on the colonies, particularly on Eritrea. 

Ministero degli Affari Esteri, Direzione Centrale deeli Affari Coloniali. Benadir. 
Rome, 1911. 

This is a report of the Commandant, G. Cerrina Ferroni [sic, but elsewhere, Feroni] , dated Aug. 31, 
1907. 

Camera dei Deputati, Legis. XXIII, Ses. 1909-12. Atti Parlamentari, Xo. 1165A. 
Relazione della Giunta Generale del Bilancio sul Disegno di Legge ( Autorizzazione 
al Governo del Re per I'lstituzione del Ministero delle Colonie). (Sittins- of June 
15, 1912.) Rome, 1912. 

12 Decree of Mar. 14, 1917, and decree of June 17, 1918. Bol. di legis., 1917, p. 286; 1918, p. 497. 

13 Decree of Feb. 28, Bol. di legis., 1919. p. 190. 
" Bol. di legis., 1916, p. 643ff., 1917, p. 538. 

16 lb., 1918, p. 348. 

16 Decrees of Mav 22, 1912, and July 2, 1912. 



ITALY. 423 

Collegio di Scienze Politiche e Colonial! (Pagliano di Pagliano-Emilia, Emilio). La 
Libia negli atti del Pariamento e nei provvedimenti del Governo. Milan, 1912- 
13. 

Not official in publication, but a collection of documents or passages thereof. Contains the last- 
named document, together with the ministerial reports on the same subject to both Houses, the Senate 
committee report, and the debates. The third volume ends with Dec. 31, 1912; the first begins with 
1881. 

Ministero degli Affari Esteri, Direzione Centrale degli Affari Coloniali. L'Africa 
italiana al Pariamento Nazionale, 1882-1905. Rome, 1907. 
Contains all the references to Africa in the parliamentary debates, interpellations, etc. 989 pages. 

Camera del Deputati, Legis. XIX, Prima Sessione. Atti Parlamentari, No. XIII 
quater. Documenti dipiomatici'^resentati al Pariamento Italiano dal Ministro 
degli Affari Esteri (Blanc). La Somalia Italiana, 1885-1895. Seduta del 25 
Luglio, 1895. Rome, 1895. 

An Italian Green Book consisting of a summary introduction of 25 pages and 250 pages of docu- 
ments — treaties with the chiefs, the agreements of 1891 and 1894 with England, etc. 

Ministere des Affaires Etrangeres. Documents diplomatiques. Affaires du Congo 
et de TAfrique Occidentale. Paris, 1895. 
A French Yeliow Book chiefly on the Berlin conference. 

49th Congress, 1st session, Sen. Ex. Doc. No. 196. 

This contains the protocols and final act of the Berlin conference for the most part translated into 
English; also the correspondence between the delegates of the United States and the Secretary of 
Staite, and various other documents. 

Ministero delle Colonic. Ordinamenti della Libia (Gennaio, 1913-Gennaio, 1914). 
Rome, 1914. 

A volume of over 1,000 pages, containing the treaty with Turkey, the ordinance for the organization 
of the colonial ministry , Libian ordinances no longer in force, etc. 

Martino, Giacomo de. La Somalia Italiana nei Tie Anni del mio Governo. Rome, 
1912. 

A report submitted to Parliament by the minister of the colonies. It contains 120 large pages in 
addition to extensive appendices and numerous maps. 

Ministero di Agricoltiira, Industria, e Commercio, Bollettino Ufficiale del Ministero 
di Agricoltura, Industria, e Commercio. Rome, bound and indexed with four 
volumes to the year. 
Occasionally gives figures for the commerce of the colonies. 

Camera dei Deputati, Legis. XXIV, S«s. 1913-14. Atti Parlamentari, No. 284. 
Disegno di Legge . . . Nov. 30, 1914. Stato di Pre^dsione della Spesa de Minis- 
tro delle Colonie . . . (for 1915-16). Rome, 1914. 

Ibid., Sessione 1913-18, No, 55. Relazione al Pariamento sulla situazione politica, 
economica, ed amministrativa delle Colonie Italiane. Presented by the Min- 
ister of the Colonies, Gaspare Colosimo, Feb. 23, 1918. Rome, 1918. 

Senato del Regno, Legis. XXII, Ses. 1904-09. Atti Interni, No. 264. Disegno di 
legge . . . Ordinamento del Benadir. Rome, 1909. Pp. 11-25, Annex I. 
Estratti dalla Relazione del reggente il Governo del Benadir, G. Cerrina Feroni 
... in data del 23 Marzo, 1906. 

Ministero delle Finanze, Direzione Generale delle Gabelle. Movimento Commerciale 
del Regno d 'Italia. Rome, annually. 

Through 1906 this contains an appendix giving the statistics for the port of Massowa. Also it con- 
tains the statistics from the Italian customs for the trade between Italy and Eritrea and Somalia. 

Ministero delle Colonie. Lifficio Economico, Bollettino di Informazioni, 1913-1919. 
Contains figures and articles on the trade, finances, agriculture, peoples, etc., of the colonies. 

Ministero delle Colonic. Bollettino Ufficiale, 1913-1919. 

This is the official bulletin of the colonial ministry and contains all decrees, etc., emanating from 
Rome and concerning any of the colonies. 

Regno d 'Italia, Gazzeta Ufficiale. Rome, daily. 
The official bulletin of the Government. 

Senato del Regno, Legis. XXIII, Ses. 1909-13. Atti Interni, vol. 8, No. 706, 1911. 
Disegno di legge ... dell' 11 Luglio 1911 . . . Agevolazioni doganali per alcuni 
prodotti originare dall' Eritrea e dalla Somalia Italiana. 

Camera dei Deputati, Legis. XXI, 1st Ses., 1900. Atti Parlamenta:^, Doc. VII. 
Relazione sulla Colonia Eritrea . . . del Ferdinando Martini (Anni 1898 e 1899) 
presentata dal Ministero degli Affari Esteri (Visconti-Venosta) nella seduta del 
6 Luglio 1900. Rome, 1900. 



424 COLOITIAL TARIFF POLICIES. 

Camera dei Deputati, Legis. XVI, 2d Ses., 1888. Atti Parlamentari, Doc. XVIII. 
Massaua. 

An Italian Green Book. 

Southard, A. E, Abyssinia, U. S. Special Consular Reports, No. 81, 1917. 

UNOFFICIAL WORKS. 

Mori, Angiolo. I Corpi Consultivi deir Am in inistrazione Coloniale negli Stati d'Eu- 
ropa.' Rome, 1912. Bibliography, pp. 593-614. 
A scholarly work discussing not only trie consultative bodies but the whole scheme of Government. 

Arangio-Ruiz, Gaetano. Storia Costituzionale dei Regno d' Italia, 1848-1898. 
Florence, 1898. Istituzioni di Diritto Costituzionale Italiano. Turin, 1913. 

Racioppi, F., and Brunelli, I. Commento alio Statute del Regno. Turin, 1909. 
3 vol. 

Tambaro, Ignazio. 11 Diritto Costituzionale Italiano. Milan, 1909. 

Martino, Giacomo de. La Somalia Nostra. Bergamo, 1913. 

An illustrated lecture delivered by the gOA^emor of the Colony. 

Piazza, Giuseppe. II Benadir. Rome, 1913. 

Contains a chapter on the Northern Protectorates, pp. 16^195. 

Brunialti, Attilio. Le Colonic degli Italiani. Turin, 1897. 

Brimialti and Catellani give more history of the early colonial period than do other works — much 
more detailed than anything available in English, but neither discusses the tarilT policy. 

Atti del Congresso Coloniale Italiano in Asmara, 1905. 

Vol. 1 contains the addresses; vol. 2 the discussions and resolutions. Vol. ], pp. 289-296, Prof. 
Carlo Betocchi: Sulla PoUtica commerciale italiana nel porto di Massaua. 

Brusa, E. Das Staatsrecht des Konigreichs Italien. Freiburg i. B., 1892. 

This is vol. 4. part 1, of Marquardsen's Handbuch des Oeffenthchen Eechts. Brusa was professor 
at the University of Turin, and his work contains much material on the early colonial history. 

Schanzer, Carlo. L'Acquisto delle Colonic e il. Diritto pubblico Italiano. Rome 
1912. 

A small volume with 40 pages of constitutional argument, 30 pages of colonial history, and 120 pages 
of documents. 

Papafava, Francesco. Dieci Anni de Vita Italiana, 1899-1909. Bari, 1913. 

A collection in tvvo volumes of the monthly comment on national and international politics which 
appeared in the Giornale degli Economisti. As in most Itahan works, there is no index; but the 
analytical table of contents is better than appears in most works. 

Pierre-Alype, L. M. L'Ethiope et les Convoitises Allemandes. La Politique Anglo- 
Franco-Italienne. Paris, 1917. 
Contains the texts of the treaties of the three powers with each other and with Abyssinia. 

Tittoni, Tommaso. Italy's Foreign and Colonial Policy. A selection from the 
speeches delivered in the Italian Parliament, 1903-1909. Authorized English 
translation, by Baron B. Q. di San Severino. London, 1914. 

Giretti, Ed. Trattati di Commercio e Politica Doganale. Rome, 1914. 
Has an appendix on colonial tariffs. 

Catellani, Enrico. L'Africa nuovo e il diritto pubblico africano, (In the Revista 
Italiana di Sociologia, July-Oct., 1907.) Les Possessions africaines et le Droit 
Colonial de I'ltalie. (In the Revue de Droit International et de Legislation 
Comparee, Jan., 1885.) 

Ogg, F. A. The Governments of Europe. New York, 1913. 

La Somalia Italiana e I'Eccidio di Lafole. Special number of the Revista Marittima, 
Rome, 1897. Lucindo Baroni, Condizioni agricole e commerciali del Benadir. 

Sonnino, Giorgio (Senator). Per il progresso della colonia Eritrea. Nuova Antologia, 
Sept. 16, 1904. 

Great Britain, Foreign Office. Peace Handbooks, Vol. XX, No. 126, Eritrea; No. 
127, Italian Libya; No. 128, Italian Somaliland. 1920. 



Chapter VII. 

COLONIAL TARIFF POLICY OF JAPAN, 



CONTENTS. 



Page, 
I. Introduction: 

The Japanese Empire 425 

Table 1.— Area and population of Ja- 
pan, Japanese dependencies, and 
regions under Japanese administra- 
tion 427 

Colonial dependencies and Leased Terri- 
tories — 
Situation and commercialimportance. 427 

Formosa 427 

Table 2.— Imports into For- 
mosa 428 

SaghaUn 428 

Korea 428 

Table 3.— Trade of Korea by 

principal articles 429 

The Leased Territory of Kwan- 

tung 429 

The Leased Territory of Kiao- 

chow 430 

Trade between Japan and the depen- 
dencies and Leased Territories — 
Table4.— Trade of Formosa..... 431 
Table5.— Chief sources of Formo- 
sa's imports 431 

Table 6.— Trade of Korea and Ja- 
pan's share thereof. ... .... 432 

Table?.— Trade of Kiaochov/.... 432 

Tables.— Trade of Dairen 433 

Table 9.— Destination of beans, 
bean cake, and bean oil ex- 
ported from Daii'en to foreign 
countries 433 



Page, 

II. Government of the dependencies and 

making of tariffs: 
Authority of the Central (Japanese) Go v- 

I ernment 434 

Administration of dependencies and 

Leased Territories 434 

III. Colonial tarifi' policy and system: 
Japanese tariff system- 
Legislation 435 

Treaties of 1911 and after 438 

The conventional tariff provi- 
sions, 1911 and after. . . 437 

Countries entitled to the benefit 

of the conventional rates 438 

Japan's tariff policy 438 

Colonial tariff policy — assimilation . . . , . 439 
Treaty restrictions upon assimila- 
tion of— 

(a) Korea 440 

lb) Kwantung and Kiaochow. . 440 

IV. Tariffs in force in the dependencies and 

the Leased Territories individually: 

Formosa and Saghalin. 441 

Korea- 
Treaty tariff of 1883 442 

Tariff system, 1910-1920 443 

Assimilation of Korea's tariff, 1920. . 444 
Preferential arrangement with China 

regarding rail-borne trade 446 

Kiaochow 447 

Kv/antung 448 

Bibliography. 448 



I. Introduction, 



THE JAPANESE EMPIRE. 



At the time of the Restoration and the beginning of the Meiji era 
(1868) the area of the Japanese Empire was about 140,000 square 
miles. In the course of 40 years thereafter, entirely within the reign 
of the late Emperor Mutsuhito, Japan's statesmen succeeded in 
bringing under the rule of their Emperor additional territories total- 
ing no less than 119,000 square mileSj making an increase of 85 
per cent in the national territory.^ This process of empire build- 
ing began with the assimilation of a large number of small outlying 
islands. The Kurile Islands were secured in 1874; the Bonin Islands 
were incorporated as a part of Japan in 1876; the Loochoo Islands 
in 1879. The Pescadores were occupied by Japanese forces during 

1 In Table 1 the Kurile, Bonin, and Loochoo islands are included in the area of Japan proper, and 
the dependencies add 75 per cent to this area. 

425 



426 COLONIAL TARIFF POLICIES. 

the war with China (1894-95), and at the conclusion of the war 
Formosa and the Pescadores were ceded by China. ^ Saghalin was 
occupied during the Russo-Japanese War and the portion south of 
the fiftieth parallel was ceded by Russia in the Portsmouth treaty 
in 1905. In 1910, by treaty with the Emperor of Korea, Japan 
acquired legal title to sovereignty over the former Korean Empire. 

The area of the Japanese dominions totals no less than 260,738 
square miles. 

In addition to these definitive acquisitions of territory, Japan 
acquired by the treaty of Portsmouth succession to all Russian 
rights in the Kwantung Leased Territory in South Manchuria, 
together with railway and other rights extendmg as far north as 
Changchun. Russia had acquired in 1898, by lease from China, 
for a period of 25 yeare, administrative rights in Kwantung, and 
by agreements and unchallenged interpretation thereof had assumed 
adm-inistration of a narrow "zone" along the railway line. These 
rights Japan took over in 1905, and in 1915 she secured from China 
extensions of the Kwantung lease and of the railway rights, together 
with further rights in Manchuria. 

The Peace Conference transferred to Japan all former German 
rights over, in, and in respect to the Leased Territory of Kiaochow in 
the Province of Shantung, Chma. The German lease of this terri- 
tory was for a period of 99 years, dating from 1898. The Japanese 
Government has announced its intention to restore this territory to 
China on condition that '' the whole of Kiaochow Bay be opened as a 
commercial port and the Japanese Government be allowed to hold a 
'concession' under exclusive Japanese jurisdiction" on the bay. 

Of the above-mentioned regions which have been brought under 
Japanese control during the past 50 years most of the outlying 
islands have been incorporated mto the national system, so that they 
are treated administratively as integral parts of Japan. It remains 
to be seen what status and treatment will be accorded to the former 
German islands. In many respects Formosa (vvith the Pescadores) 
and Japanese Saghalin are treated as parts of Japan rather than as 
colonies. They have, however, no direct representation in the 
Japanese Diet, and their administration is that of dependencies. 
The Kwantung Leased Territory, though it remains technically 
Chinese soil, is administered by the Japanese, within the limitations 
of treaty provisions,^ as though it were a colony. The Kiaochow 
Leased Territory, likewise subject to certain treaty restrictions,^ has 
been administered, since the fall of Tsingtao m 1914, as though it 
were Japanese territor}^. But Japan has declared her intention to 
restore this region to China. 

The following table shows the extent, population (census of 
October, 1920), and classification of the territories under Japanese 
administration : 

2 Treaty of Shimonoseki, 1895. 

?• Open-door agreements and treaties and conventions between Russia and China and between Japan 
and China. See p. 440. 



JAPAN. 



427 



Table 1. — Area and 'population of Japan, Japanese dependencies, and regions under 

Japanese administration. 



Area. 



Popula- 
tion. 



Japan, o 

Honshu 

Shikoku 

Kiushiu — „ 

Yezo (Hokkaido) 

Kurile Islands (Chisliima) 

Bonin Islands (Ogasawarajima) 

Loochoo Islands (Riuldu) 

Other islands 

Dependencies 

Formosa (Taiwan) 

Pescadores (Hokoto) 

Japanese Saghalin (Karafuto) . . 

Korea (Chosen) 

Leased Territories (Chinese): 

Kwantung 

Kiaochow 



Square miles. 

148, 756 

87,426 

7, 083 

15, 703 

30,502 

6,068 

27 

941 

1,006 

111,982 

13,944 

47 

13,253 

84, 738 

1,300 
200 



>5, 961, 000 



21,044,000 

13,654,000 

106,000 
17,284,000 

2 573,000 

3 227,000 



1 Formosa contains also about 85,000 savages not yet brought under -control. 2 1917. s Estimated. 
COLONIAL DEPENDENCIES AND LEASED TERRITORIES. 

It will be seen from the above classification of territories under 
Japanese administration that it is not possible to speak comprehen- 
sively or with precision of Japan's ^'colonies.'' On the basis of ad- 
ministrative distinctions, Formosa, Japanese Saghalin, and Korea 
may properly be classed as ^'colonial dependencies," An examina- 
tion of Japan's colonial policy requires attention to these three, and 
to the Kwantung and the Kiaochow Leased Territories. 



SITUATION AND COMMERCIAL IMPORTANCE. 

Formosa (Taiwan). — Formosa was formerly Chinese territory. 
The island lies off the China coast, at a distance of about 100 miles, 
opposite the Province of Fukien, and a little to the west of a direct 
line from Japan to the Philippines. It is not far north of the island 
of Luzon, and is within easy sailing distance of the important ports 
of South China and of Hongkong. It lies astride the Tropic of Cancer, 
and its climate on the whole is tropical. The Pescadores are situated 
in the straits between Formosa and the China coast; their chief im- 
portance is strategic. Formosa has an area of 13,944 square miles; 
the Pescadores, 47 square miles. The population of Formosa is 
3,650,000, of whom 3,395,605 are natives '(mostly of Chinese stock), 
86,470 aborigines, 145,232 Japanese, and 19,213 ''foreigners."^ 

Formosa is perhaps best known commercially in connection with 
its production of camphor. Its richest resource, however, is sugar 
cane, which has in some years contributed more than 50 per cent of 
its" export trade. Most of the sugar goes to Japan for refining or con- 
sumption. In the export trade to foreign countries, the most iin- 
portant item is tea. Other important products are copper, coal, 
hemp, rice, salt, alcohol, and hides. Items conspicuous in the import 
trade in recent years have been as follows: 

< Japan Year Book, 1919-20, p. 723. 
185766°— 22 28 



428 



COLONIAL TASIFF POLICIES. 



Table 2. — Imports into Formosa.'^ 
[In fchousands of dollars.] 



Article. 



I 

i 1913 



1918 



1919 



Fertilizers . 
Sugar 



Rice. 

Cotton cloth , 

Fish, dried or salted . 

Opium 

Lumber 

Iron bars, rods, etc. . 

Flour, wheat 

Petroleum 

Sake. 



Sugar machinery and parts } 

Mats and matting j 

Matches , 



Railway construction materials, includmg ties. 

Paper. ." 

Beans 

Tobacco, loaf 

Beer, bottled 

Tobacco, manufactured 

Railway cars and parts thereof 

All other 



$1, 726 

731 

1,555 

2,043 

2,05S 

1,879 

1, 194 

921 

837 

593 

760 

31 

227 

265 

394 

770 

366 

323 

283 

367 

153 

12,852 



$5, 111 
948 
3,647 
3,319 
1,974 
2,270 
1,614 
3,015 
1,174 
1, 223 
818 



1,296 

1,119 

1, 555 

1,158 

830 

772 

615 

394 

474 

300 

18,327 



S8,338 
7,984 
4,541 
4,184 
3,561- 
3,207 
2,791 
2,473 
1,707 
1,672 
1,552 
1.466 



403 
331 
239 
117 

871 

786 



672 
25,040 



Total. 



51,953 



77,121 



1 Note that the figures of tliis table, taken from Supplement to Commerce Reports No. 58d, Dec. 22, 1920, 
are in thousands of doUars and not of yen. 

The trade both in exports and in imports is largely with Japan. ^ 

Saghalin (Karafitto). — Karafuto, the Japanese portion of the island 
of Saghalin, lies directly north of Japan, being separated from the 
island of Hokkaido (Yezo) by the Soya Strait, and is parallel to and 
not far distant from the coast of Russian East Siberia. The northern 
half of the island is Russian, and the boundary is clravvii on the 
fiftieth parallel of latitude. With an area of 13,253 square miles, 
Japanese Saghalin has a population which varies with the seasons, 
reaching in the summer about 77,000, including Japanese. Obviously 
its commerce is not of much consequence. The most important re- 
source is the herring fishery. The island possesses large forests of larch 
and fir trees, and there are important coal measures, alluvial gold, 
iron pyrites, and oil. The Japanese have been promoting farming 
and stock breeding. 

Korea (Chosen), — Korea is important politic ail}^, economically, 
and strategically. China, Russia, Japan, and the Korean people 
themselves have contended for dominance of this extensive peninsula. 
Korea extends from the vicinity of Vladivostok on the north to the 
latitude of Shimonoseki on the south; it lies between the Japan Sea 
and Japan on the east and the Yellow Sea and Manchuria, Chili and 
Shantung Provinces, in China, on the west. It has a long frontier 
contiguous to Manchuria, and is on the natural highway between 
Japan and Mongolia and central Siberia. With an area^^of 84,000 
square miles, it is nearly as large as the main island (Honshu) of 
Japan proper. The population is 21,000,000, of whom over 
320,000 (1916 figure) are Japanese,^ and some 20,000 aj;e Chinese. 

Korea is an agricultural country, but the methods of cultivation 
are backward. The chief crops are rice, wheat, and other grains, 



6 See below, p. 431. 

9 The Japanese immigration has occurred chiefly since 1905. 



JAPAN. 



429 



beans, tobacco, and cotton. Gold mining is carried on in certain 
regions, and copper, iron, coal, graphite, and mica are present in con- 
siderable quantities. 

Trade is conducted at nine open ports, three subports, and at one 
port open only to Japanese vessels. 

The principal exports are rice, beans, gold, copper, hides, and 
cattle; the principal imports, cotton goods, cotton yarn, machinery, 
kerosene oil, timber, coal, paper, sugar, grains, and cloth. The trade 
is largely with Japan. 

The values of the principallir tides in the export and import trade 
of Korea for recent years are as follows : 

Table 3. — Trade of Korea by 'principal articles} 
[In thousands of yen, Yen=$0.498.] 



Article. 



Beans and peas 

Rice 

Live stock 

Cowhides. 

Fish and fish manure 
Wheat and barley . . . 

Ginseng 

Cotton 



3,510 
■ 1, 603 
511 
653 
23 
201 
6 
90 
Another I 2,305 



1906 



1907 



3,881 

7,558 
775 
676 
245 
456 

1, 200 
63 

2, 148 



Total 8,902 | 17,002 



Sheetings and shirt- 
ings 

Cotton piece goods 
(Japanese) 

Cotton yarn 

Silk piece goods 

Kerosene 

Machinery 

Coal 

Timber, lumber, and 
ties 



3uga 
Ulc 



?ar 

Another. 



2,968 

1,332 
1,583 

708 
1,009 

(2) 
588 

1, 155 

676 

19, 502 



6,124 

1,629 
2,670 
1,371 
1,068 

(2) 

803 

1,828 

801 

25, 142 



Total 29,521 j 41,436 



3,370 
6,484 

717 
518 
238 
166 



103 
2, 517 



5,914 

1,625 
2,023 
1,472 
1,411 

(2) 

1,379 

1,671 

852 
24, 678 



41,025 



1909 



3,513 
5,530 
426 
815 
260 
741 
848 
273 
3,842 



16, 248 



5,056 

1,312 

1,285 

1,244 

934 

896 

981 

838 

24, 102 



1910 



5,726 

6,277 
634 

1,004 
317 
361 
175 
304 

5,115 



19, 913 



6,163 

1,693 
1,801 
1,085 
1,261 
1,243 
794 

1,687 

881 

23, 194 



39, 782 



1911 



4,630 

5,283 

703 

1,088 

147 

99 

70 

252 



7,553 

2,173 
2,123 

983 
1,436 
1,588 
1,334 

1,948 

1, 207 

33, 742 



54,087 



1912 



5,215 
7,524 

207 
1,032 

282 
92 

261 

435 
5,937 



20, 985 



9, 656 

2,565 
2,333 
1,383 
1,770 
2,390 
1,525 

2,263 

1,506 

41,723 



67, 115 



1913 



5,718 

14,491 

211 

1,267 
660 
217 
524 
924 



8,740 

2,314 

1,866 
1,183 
2,033 
1,554 
1,780 

1,858 
1, 870 
18, 382 



71, 580 



1914 



4, 161 

7,098 
465 

1,597 
688 
204 
497 

1,107 
18, 571 



34, 388 



1,983 
2,069 
926 
1,486 
1,481 
1,741 

1,694 

1,510 

42, 705 



1915 



5,328 

24, 516 

338 

3,538 

896 

145 

1,241 

1, 157 

12, 333 



49, 492 



8,350 

1,941 
2,435 
973 
1,701 
1,222 
1,782 

1,436 

1,541 

37,8:33 



63,231 I 59,199 



» Figures from Japan Year Books. 
2 Not shown. 

The Leased Territory of Kwantung . — Kwantung (Chinese territory), 
at the southern extremity of the Liaotung Peninsula, is important 
as the southern gateway to the rich region of South Manchuria. 
Within it are located the fortress of Port Arthur and the great com- 
mercial port of Dairen."^ Port Arthur dominates the entrance to the 
Gulfs of Pecliili and Liaotung, the water highways to the Chinese ports 
of Tientsin, Chingwangtao, and Newchwang. Dairen is the southern 
terminus of the South Manchuria Railway and is thus the main 
exporting and importing point for Manchuria. With the ports of 
Newchwang and Antung, but with great advantage over both, it 
divides the command of a rich hinterland.^ The Leased Territorv 



7 In Chinese, Talien; in Russian, Dalny. 

8 Manchuria alono has an area of 364,000 square miles — present population about 17,500,000— and is esti- 
mated to be capable of supporting a population of 100,000,000. 



430 COLOXIAL TARIFF POLICIES. 

includes about 1,300 square miles, within which there is a population 
of 572,525, of whom 516,772 are Chinese, and 55,633 Japanese® 
exclusive of the Japanese military and naval forces. 

The Leased Territory is important commercially rather for its 
transit trade than for its local production and consumption. The 
gross value of the trade of the port increased from $22,000,000 in 
1908, and $56,000,000 in 1913, to $217,000,000 in 1918. ^« The duties 
payable on im_ports intended for the interior, or on shipments from 
the interior for export, are in most cases collected at the port of 
Dairen. The chief local products are maize, millet, beans, wheat, 
buckwheat, rice, tobacco, hemp, and vegetables. The chief manu- 
factured product is salt, for use primarily in the active fishing 
industr}-. 

Beans, bean oil, and bean cake^ however, are far the most important 
exports of the port of Dairen. The trade in these products is a 
development since 1908, when the utility of soy-bean oil for soap 
making, mixture with olive oil, and paint manufacture first became 
appreciated in Europe and America. Manchuria is the world's main 
source for oil beans, and the prosperity of the country has been 
greatly stimulated by the striking recent grovv^th of this commerce. 
The most important imports are cotton goods, iron and steel products 
and machinery, sugar, tobacco, gunny sacks, and kerosene. 

A considerable portion of the total import and export trade of 
South Manchuria passes through the port of Dairen, wliich ranks 
(in 1917) fourth among China's ports in value of customs revenue 
collected. 

TJie Leased Territory of Kiaocliow. — ^Kiaochow (Chinese territory) 
is located on the south side of the Shantung promontory on the coast 
of the Province of Shantung, China, facing the Yellow Sea. The 
Leased Territory includes an area of 193 square miles on the main- 
land; also the bay and a number of small islands. It has a popula- 
tion of over 200,000, including some 20,000 Japanese.^^ The port 
is Tsingtao. 

This Territory, like Kwantung, is important politically, commer- 
cially, and strategically. It is the gateway to Shantung and con- 
tiguous Provinces. In Shantung alone there is a highly productive 
hinterland with an area of 56,000 scjuare miles and a population of 
35,000,000. Tsingtao is the terminus of the Shantung Railway, 
which runs to the capital of the Province and there connects Avith 
the north~and-south railway which leads to Peking and Tientsin on 
the north and to the Yangtse Piver and Shanghai on the south. 

Again, like Kwantung, Kiaochow is important commercially for 
its transit trade. On this the duties are paid at Tsingtao. 
Shantung exports principally beans and bean cake and oil, straw 
braids, peanuts, eggs, fruit, silk, drawn work, and salt; its chief 
imports are cotton goods and 3^arn, tobacco, kerosense oil, sugar, 
matches, dyestuffs, and timber. Since the Japanese occupation 
large quantities of opium and opium derivatives have been imported. 
Most of the import and export trade passes through the port of 

« Figures of 1917, from Statesman's Year-Book, 1919. Arnold, J.: Commercial Handbook of China, 
U. S. Department of Commerce, Misc. Series, No. 84, 1919, Vol. I, p. 51.5, gives the following figures for 
the census of 1914: Ciainese, 524,681; Japanese, 82,185; foreigners, 257. This probably includes the railway 
zone. 

10 Arnold; Op. cit., p. 528. 

1'* Nearly all of these Japanese have entered the territory since the occupation, in 1914. 



JAP AIT. 



431 



Tsingtao, which ranks (in 1917) sixth among China's ports in value 
of revenue collected. 



TRADE BETWEEN JAPAN AND THE DEPENDENCIES AND LEASED TERRITORIES. 

The development of the trade between Japan and her dependen- 
cies and Leased Territories has been striking. In the case of Formosa, 
the trade with Japan, which had been negligible before the acquisition 
of the island (in 1895), had increased by 1914 to more than three- 
quarters of the total Formosaa trade. During the same period the 
amount of trade between Formosa and countries other than Japan 
showed a relatively small increase, while the volume of commerce 
between the island and the Chinese mainland actually decreased. 
Tables 4 and 5 show the trade of Formosa and the shares thereof 
controlled by Japan and other countries. 

Table 4. — Trade of Formosa. 
[In thousands of yen or taels.] 



Year. 



1890 (Hk. taels)2. 
1894(Hk. taels)2. 

1896 (yen) 

1900 (yen) 

1910 (yen).. 

1913 (yen)....... 

1914 (yen) 

1915 (yen) 

1916 (yen) 

1917 (yen) 

1918 (yen) 

1919 (yen) , 



Imports. 



From foreign 
countries. 



Total. 



2,929 
2,261 
8, 631 
13,571 
19, 853 
18, 024 
13, 013 
12, 781 
15, 340 
21, 099 
33, 555 
64,178 



From 
China. 



780 
1,362 
4,094 
5,995 
5.452 
7,250 
7,306 
7,662 
7,328 
9. 398 
15; 960 
28,673 



From 
Japan. 

(extra). 



8,439 
29, 070 
42, 830 
39, 879 
40, 587 
49, 525 
67, 744 
70, 591 
90,527 



Exports. 



To foreign countries. 


■ Total. 


To 
China. 


1,159 


4,191 


610 


4,444 


11,402 


8,676 


10,571 


7,792 


11, 986 


3,523 


12, 942 


2,919 


12, 982 


3,480 


15, 460 


4,994 


31, 652 


10,389 


40, 215 


14,399 


33,555 


14,638 


35,945 


12,108 



To 

Japan, 
(extra). 



793 



4,402 
47,937 
40, 436 
45, 738 
60, 192 
80,619 
105, 496 
105,601 
141,886 



1 Merchandise, both foreign goods and native produce. 

2 The Hk. (Haikwan) tael, the unit employed by the Chinese maritime customs; it equals $1.50 Mexican. 

Table 5. — Chief sources of Formosa^ s imports.'^ 
[In thousands of yen.] 



Year. 


Japan . 


China. 


British 
India. 


United 

States. 


Dutch 
Indies. 


Great 
Britain. 


1914 


39, 870 
40, 587 
49,525 
67, 744 
70,591 


7,306 
7,662 
7,328 
9, 398 
15,960 


1,017 
1,677 
2,585 
3,948 
4,238 


800 

701 

761 

2, 148 

2,302 


370 
170 
226 
346 

2,188 


1,278 


1915.. . . . 


711 


1916 


1,233 


1917. 


1,078 


1918 


887 







1 Figures from Japan Year Book, 1916, p. 714, and 1919-20, p. 732. 

Korean commerce also is principally in Japanese hands. Of the 
total exports in 1917 of 83,775,387 yen, three-fourths, or 64,725,650 
5- en, went to Japan; of the total imports of 102,886,736 yen, nearly 
three-fourths, or 72,696,036 yen, came from Japan. Imports 
amounting to 11,609,605 yen came from the United States. In 1918, 
74 per cent of the imports of the dependency came from Japan, and 
almost 90 per cent of the exports were sent to that country. Korea, 



432 



COLO:NriAL TARIFF POLICIES. 



however, unlike Formosa, had been deahng principally with Japan 
even before the Japanese assumption of control, and trade figures 
for many years back show Japanese predominance in i^orean trade. 
Table 6 shows the total trade of Korea and her trade with Japan for 
the years from 1903 to 1918. 

Table 6. — Trade of Korea and Japaii's share thereof.^ 
fin thousands of yen.] 



Year. 




1903 
1904 
1905 
1908 
1907 
1908 
1909 
1910 
1911 
1912 
1913 
1914 
1915 
1916 
1917 
1918 
1919 
1920 



18, 411 


11, 555 


9,669 


7,600 


27,402 


19. 007 


7,531 


5, 687 


32, 972 


23, 562 


7,916 


5,390 


30, 305 


22,914 


8,902 


6,917 


41,611 


27,364 


16,984 


12, 649 


41,026 


24,040, 


14,113 


10. 963 


36,649 


21,852 


16,249 


12, 082 


39,783 


25,348 


19,914 


15, 379 


54, 088 


34,058 


18, 857 


13, 341 


67,115 


40, 756 


20,988 


15, 369 


71,580 


40,429 


39, 879 


25,314 


63, 231 


39,047 


34, 389 


2-8, 587 


59,199 


41,535 


49,492 


40, 901 


74, 457 


52, 459 


56,802 


42,964 


102, 887 


72, 696 


83,775 


64,725 


158, 309 


117, 273 


154, 189 


137, 205 


283.077 


184,918 


221,947 


199.849 


249,326 




197,086 





1 Figures for 1903 to 1916 from Government of Chosen, Annual Reports on Reforms and Progress in 
Chosen. Figures for 1917 and 1918 from Japan Year Books. Figures for 1919 and 1920 from Com- 
merce Reports, June 10, 1921, and Supplement XO. 58a, June 25, 1920, reconverting dollars into yen. 
The figures of this table do not include specie and bullion, of -which Korea's annual exports are consid- 
erable. 

For the Leased Territory of Kiaochow, such figm^es a.s are available 
indicate an equally pronounced tendency toward Japanese commercial 
supremacy in the territories under Japanese administration. In 
1913, Japan had 37 per cent of the direct foreign trade of the pojt 
of Tsingtao, wliile in 1918, her share amounted to 83 per cent, in 
this latter year the trade of the United States with the Leased 
Territory was only 3 per cent of the total. ^- The following table 
shows the import and export trade of Kiaochow from 1909 to 1918, 

Table 7. — Trade of Xiaochoiv.^^ 
[In thousands of Haikwan taels.] 





Imports from Exports to 


Year. 


Foreign Chinese 
countries.} ports. 


Foreign 
coimtries. 


Chinese 

ports. 


1909 


11,071 i 14,444 
12,032 14.547 


4,501 

7, 558 
10,177 

9,152 
12, 039 
10,034 

3,248 
16, 327 
16,687 
15,311 


10,236 


1910 


9,614 


1911 


13,371 
14,707 
15,467 
12, 151 
4,281 
,14,257 
17, 825 
16, 974 


13,596 
16,624 
19, 290 
10, 193 
1,947 
10,415 
15, 874 
18,322 


9,676 


1912 


15, .847 


1913 


13, 653 
6, 514 


1914 


1915 & 


3,073 
6,607 
9,045 


1916 


1917 


1918 


14,224 









o Figures from Chinese Maritime Customs Reports. 
b For 4 months from Sept. 1. 

12 Arnold, J.: Commercial Handbook of China. U. 
1919, p. 622. 



Department of Commerce, Misc. Series, No. 84, 



JAPAN. 



433 



The Leased Territory of Kwantung has gained enormously in the 
total volume of its trade during the Japanese regime. Develop- 
ment of the port and of its railway connections was responsible for 
the growth in the first instance, and the phenomenal expansion of 
the bean trade, especially during the v/ar, has greatly contributed 
to the total. Table 8 shows imports and exports from the port of 
Dairen since 1908. 

Table 8. — Trade of Dairen} 

[In thoiisands of Haikwan taels.] 





Imports from 


Exports to 


Year. 


Foreign 
countries. 


Chinese 
ports. 


Foreign 
countries. 


Chinese 
ports. 


1908 


17,216 
12, 240 
18,672 
24,013 
27, 070 
28,740 
28, 892 
24,865 
33,358 
58, 274 
66, 979 


3,061 
6,302 
5,120 
6,774 
7,803 
8,310 
9,003 
16,581 
19 073 


7,342 
22,308 
20, 150 
24,007 
19,795 
29,749 
36,601 
33, 714 
4?. ^.^'^ 


5,069 
4,436 
8,218 
9,724 


1909 ... 


1910 


1911 


1912 


9,091 

9, 299 
8 504 


1913 


1914 


1015 


15, 171 


1918 ... 


11 573 


1917 


23, 691 47' 024 
28, 622 72. 389 


16, 163 


1198 . . . . 


13,623 









' Figures from Chinese Maritime Customs Reports. 

Distribution of the commerce of Dairen by countries is shown in 
the Chinese Maritime Customs Reports only for the export soy-bean 
trade. The beans are shipped for crushing primarily to Japan, 
although thej^ are also sent in increasing quantities to England, 
France, Denmark, and other European destinations. The bean cake 
goes entirely to Japan and Formosa, to be used as fertilizer in the 
rice and tea fields. The oil is shipped principally to the United 
States, and there has developed a heavy direct traffic in this com- 
modity between Dairen and Seattle. This oil trade with America 
has reached large proportions since the war; and in 1918, of the total 
value of $103,000,000 for the exports of the port of Dairen, more theh 
S36,000,000 consisted of soy bean oil purchased hj the United States. 

Table 9 shows the trade in the soy bean itself and in its two pro- 
ducts for the years 1914andl91S. 

Table 9. — Destination of beans, bean mice, and bean oil exported from Dairen to foreign 

countries} 
[In thousands of piculs.2] 



Destination. 


Beans. 


Bean 
cake. 


Bean oil. 


Japan 


1914. 


7,678 


2,597 


48 


United States . 


84 


Other countries 


'7 


734 


388 








Total 


7, 685 


3,331 


520 




1918. 




Japan 


4,363 

2 

684 


13, 292 


53 


United States 


2,004 


O^her coimtries 


3 








Total 


5,049 


13, 292 


2,060 





1 Figures from Chinese Maritime Customs Reports. 

2 The picul =133 pounds. 
8- Less than 500 piculs. 



434 COLOXIAL TARIFF POLICIES. 

II. GOYERXMEXT OF THE DePEXDEXCIES AXD MaKIXG OF TARIFFS. 
AUTHORITY OF THE CEXTRAL (jAPAXESE) GOYERXMEXT. 

All legislatiYe autbority in the Japanese Empire is Yested in the 
Emperor and the Diet. The constitution proYides that '^the impo- 
sition of a new tax or the modification of the rates [of an existing 
one] shall be determined by law.'^ (Art. 62.) ''The Emperor exer- 
cises the legislatiYe power with the consent of the Imperial Diet." 
(Art. 5.) *'The Emperor, in consequence of an urgent necessity to 
maintain public safety or to aYcrt political calamities, may issue, 
when the Imperial Diet is not sitting, imperial ordinances in the 
place of laws. Such imperial ordinances are to be laid before the 
Imperial Diet at its next session, and when the Diet does not approYe 
the said ordmanees, the GoYernment shaU declare them to be iuYalid 
for the future." (Art. 8.) ''The Emperor issues, authorizes, or 
causes to be issued, the ordmanees necessary for the carrying out of 
the laws. ^ ^ ^^ But no ordinance shall in any way alter any 
of the existing laws." (Art. 9.) "Eycty law requires the consent of 
the Imperial Diet.'* (Art. 27.) 

The tariff laws for Japan and lor all parts of the Empire are enacted 
in accordance with the aboYe proYisions; but regulations for their 
operation may be made by the cabinet or by departmental ordi- 
nance, these being issued as imperial ordinances. The tariff law 
for Korea, effectiYe August 29, 1920, entiTists some discretionary 
powers to the goYernor general, including the power to suspend 
certain duties. The Diet meets annually, in December, for a session 
of three months; it may also be called in special session. 

ADMIXISTRATIOX of DEPEXDEXCIES AXD LEASED TERRITORIES. 

The dependencies and Leased Territories are all administered under 
organizations of one general type. GoYernmental authority centers 
in Japan. Control is in each case Yested in a goYernor general, 
appointed by the Japanese Crown and responsible to the Emperor 
either directly or through the prime minister or the home office. 

The goYernor general has ordinance poYrer as weH as simple 
executiYe authority, and controls, directly or indirectly, both mihtary 
and ciYii affairs in the territories under his jurisdiction. He gOYerns 
through his secretariat and through the officials at the heads of sub- 
ordinate departments. The number of such departments Yaries with 
the size and importance of the administratlYe district, froin 10 in 
the case of Korea to 3 in the case of Saghalin, and 3 for Kwantung. 
In Korea,^^ the goYernor has an adYisory central council of 70 mem- 
bers nominated by the .Japanese cabinet, upon the recommen- 
dation of the gOYernor general, from among Koreans who haYe held 
high office. This council, howeYer, has no legislatiYe authority, and 
its presidency is reserYed for the director of pohtical affairs. In 
none of the dependent areas is there a representatiYe legislatiYe body. 

In Formosa the gOYernor general must be a general or lieutenant 
general of the army or an admiral of the naYV. In Kiaochow the 
com_mander in chief of the Japanese garrison has had supreme control, 
but has conducted ciYii affairs through a subordinate cIyII goYernor. 

i3 The administrative system for Korea was revised in 1919. See Japan Year Book, 1919-20, p. 704. 



JAPAK. 435 

In Korea and Kwantung, under new regulations (1919), a civilian 
may hereafter hold the post of governor general. The governor 
general in Kwantung has charge also of the South Manchuria Kail- 
way, including the railway zone, but his department of foreign 
affairs is directed by the Japanese consul general at Mukden, under 
the minister of foreign affairs in Japan. ^* 

The imperial rescript for the reform of the administration of Korea, 
issued in August, 1919, promises ''the eventual adoption in Korea of 
a system of provincial tod municipal administration similar to that 
in operation in Japan proper, so far as circumstances would permit," 
and the obliteration of "all differences between Korea and Japan 
proper, in matters of education, industry, and civil service." 

It may be expected that the Kiaochow administration will be 
changed from its present military form to resemble the new regime 
in Kwantung. Japan, however, has announced her intention to 
restore this region to China. 

III. Colonial Tariff Policy and System. 

JAPANESE tariff SYSTEM. 

LEGISLATION. 

The first Japanese customs tariff law was enacted in 1897. Pre- 
vious to that time the Japanese Government had been restricted 
by the commercial treaties concluded betv/een 1854 and 1866, and 
the tariff schedules in force had been those adopted in 1866, wherein 
the ruling rate, both of import and of export duties, was 5 per cent; 
these schedules had contained some ad valorem and some specific 
rates, the latter having been fixed as the equivalent of 5 per cent ad 
valorem on the basis of the current market prices of commodities. 

When their commercial treaties were being revised in the years 
following 1894, the Japanese had two principal objectives, the 
abolishing of extraterritoriality and the restoration of their tariff 
autonomy. While conceding these, certain of the powers took the 
precaution to place in their treaties schedules in which were listed 
some of the more important of the items in their trade with Japan 
and the rates of import duty to be paid thereon. While the treaties 
were being negotiated the Japanese were framing their new tariff 
law. They had been dropping export duties, one after another, for 
some time, and in 1898 they abolished all that remained of them. 
At the same time they provided for increase in the revenues by in- 
creasing the import duties. The tariff law (of 1897) which came into 
effect in 1899, ^contained a schedule of 532 items. On the articles 
which were dutiable the rates ranged from 5 per cent to 40 per cent. 
During the next few years the law was frequently amended. In 
1906 there was a complete revision, in the course of which the 'Svar 
duties" which had been imposed during the Russo-Japanese War 
were in most cases incorporated in the regular tariff schedules. A 
survey of the amendments and revisions, with comparison of the 

1* On administration of dependencies, see Japan Year Book, 1919-20, passim; Davidson, J. W.: The Island 
of Formosa, Past and Present, 1903, pp. 596-597; Takekoshi, Y.: Japanese Rule in Formosa, 1907, Chap. II, 
passim; "Japan As It Is," 1915, compiled by H. I. J. M's. Commission to the Panama-Pacific International 
Exposition, ;5an Francisco, 1915; also Japan Financial and Economic Monthly, November, 1919, passim. 



436 COLONIAL TARIFF POLICIES. 

rates and with reference to the returns of revenue, shows a steady 
tendency toward higher duties. 

in 1910 a new tariS lav\' was passed/^ and comnierciai treaties of 
the 1894-1899 series were denounced. The director of customs 
declared the object of the new revision to be to obtain more revenue 
and to secm'e adequate protection to Japanese industry. The law 
of 1910 provides for the exemption from import duty of 23 classes 
of articles. It provides that imports from countries which do not 
enjoy the benefit of special conventional arrangements may nevei:- 
theless be designated by imperial ordinance to receive concessions 
not exceeding those established by the conventions. Ailicles im- 
ported from countries which discrim.inat8 against the vessels, pro- 
duce, or manufactiu'es of Japan may be subjected by imperial ordi- 
nance to duties of 100 per cent ad valorem, or less, in addition to 
the import duties regularly prescribed. Where an export bounty is 
granted by a foreign coimtry there may be imposed by imperial ordi- 
nance a countervailing duty equal to the bounty. 

This la.w of 1910, together with revised regulations for the execu- 
tion of the customs duties law^^ took effect in 1911. The tariff of 
1910, with various amendments,^^ is the tariff now in force, and in 
most respects it applies in Korea, Formosa, and Saghalin as well as 
in Japan proper. 

The tariii schedule contains 647 items, classified in 17 groups. 
The duties are in most cases specific. Raw materials largely used in 
manufactui'ing industries are, generally speaking, duty free. On 
partially manuiactm-ed articles the rates are low. On manufactured 
goods the rates range from 15 per cent to 40 per cent; on luxui'ies, 
from 50 per cent to 355 per cent — in the case of tobacco. ^^ There 
are no export duties. 

TREATIES OF 1911 AXD AFTER. 

New treaties, in several instances accompanied by special recipro- 
cal conventions, were signed between Japan on the one hand and 
the United States,^^ Great Britain, Germany, France, Italy, Austria- 
Hungary, Denmark, Holland, Norway, Sweden, Switzerland,' and 
Spain on the other. More recently new treaties have been concluded 
-with Bolivia and Paraguay,^^ 

15 Law No. 54, promulgated on Apr. 1-5. 1910. 

18 Revised bv imperial ordinance No. 1S4, in June, 1911. 

" Laws Nos.'S and 9 of 1912; law ^o. 38 of 1914; isw No. 3 of 1916. See Tariii of Japan, revised and cor- 
rected, in The Herald of Asia, Tokvo, 1919. For the most recent changes see Commerce Eeports, 1920, 
pp. 801 and 1517 (antidumping law and increases chiefly in the chemical schedule, eflective Aug. 1, 
1920) and June 13, 1921, p. 1500 (increases chiefly in metarmanulactures;. 

13 A comparative tahle v.-asissued hy the Japanese department of finance at the time of the introduction 
of the tariff law in the Diet , shoxs'tng the ad valorem eq ui vaients to the specific duiies. The intei-naiioaal 
tarifl revision committee of the Yokohama Foreign Board oi Trade published in Seprember. 1911, a study 
of the new tariff under the title '•' The New Import TariS of Japan , in force from the IVth July , 1911. " _ 

19 In point of time the fii'st of thenewtreaties v^'as tliat concluded v.ith die L nited Stares .signed on t eb- 
21 ; and ratified on Apr. 4, 1911 , but this treaty contained no tariir concessions, it pro\-ides for reciprocal 
freedom of commerce and na^dgation on the niost-favored-nation basis, but it leaves the question of import 
duties with the temporary pro^dsion (Art. V) that, '• The import duty on articles the produce cr manufac- 
ture of the territories of one of the high contracting parties upon importationinto the territories of the other, 
shall henceforth be regulated either bj' treaty between the two countries or by the internal legislation of 
each. " As amendatory- to this .itisspeeifiedin the subjoined protocol that the tarilTpro^-isions of the treaty 
of 1894 shall be maintained pending the conclusion of a tariif "treaty. Such tariiT treatv has not been coii- 
eluded. The treaty contains a covering most-fa^ored-nation clause, but in a form differing in several re- 
spects from that usually employed in treaties to VN-hich the United States has been a party. 

*" New treaties were hot, and have not since been negotiated with Argentina, Brazil, Chile, China, the 
Congo, Greece. Mexico, Pent, Russia, and Siam; but the old treaties ?.ith those countries remained in force 
by \-irtue of not ha^-ing been denounced. A new treaty had been made %\-ith Russia in 1907. Japan's 
treaties Avith Belgium and Portugal having been terminated, no new treaties have been concluded, and 
commercial relations with these countries are covered by temporary arrangements. 



JAP AIT. 437 

- Tlie conventional tojijf provisions, 1911 and after. — Conventional 
tariff schedules were established by the treaties with Great Britain, 
Germany, France, and Italy. In each of these agreements, as with 
all the other treaties between Japan and European powers, immediate 
and unconditional most-favored-nation treatment was pledged. 

The British- Japanese treaty provides that negotiations for the 
modification of the conventional tariff schedules may be undertaken 
at the desire of either party, when the treaty has been in force for 
one year, and that if no agreement be reached after six months of 
negotiation, the schedules may be abrogated without otherwise affect- 
ing the treaty. This treaty also provides that its stipulations shall 
not apply to ^'tariff concessions granted by either of the high con- 
tracting parties to contiguous States solely to facilitate frontier 
traffic within a limited zone on each side of the frontier, or to the 
treatment accorded to the produce of the national fisheries of the 
high contracting parties, or to special tariff favours granted by Japan 
in regard to fish and other aquatic products taken in the foreign 
waters in the vicinity of Japan '',^^ and that they shall not apply to 
any of the British ''dominions, colonies, possessions, or protectorates 
beyond the seas unless notice of adhesion '^ be given on behalf of such 
region before the expiration of two years after ratification.^^ Such 
adhesion may be withdrawn. The treaty provides for its own ter- 
mination at any time after July 16, 1923, subject to one year's notice. 

The treaty between France and Japan, signed on ilugust 19, 1911, 
was to remain in force for 10 years, with 12 m^onths' notice required 
for denunciation, but it contains the provision that the most-favored- 
nation clauses and the protocol containing the schedules of reduced 
duties may be withdrawn at any time, upon one year's notice, or 
that the protocol alone may be terminated upon five months' notice. 
The protocol provides that the rates of duty specified may be changed 
by either party, five months' notice being required before substitute 
rates may become effective; and that in case an increase is made by 
either country, the other may at the same time withdraw the sched- 
ule v^hich applied to imports into its own territories, on three months' 
notice. 

The provisions of this treaty applied to all the colonies and pos- 
sessions of Japan, and to Algeria, and its scope was extended before 
July, 1913, to the following French colonies: French West Africa, 
French Equatorial Africa, French Somali Coast, Madagascar, Re- 
union, French India, New Caledonia, French Guiana^ Guadeloupe, 
Martinique, and St. Pierre and Miquelon.^^ 

The Germ an- Japanese treaty was to be oinding until December, 
1917, requiring 12 months' notice thereafter for abrogation. After 
the outbreak of the war, the Japanese Government gave notice of its 
suspension and it is now no longer in effect. 

The treaty between Italy and Japan, signed on November 25, 1911, 
v/as terminable after December 31, 1917. In January, 1917, the 
Italian Government gave notice of its desire to abrogate the treaty, 
the abrogation to take effect on the last day of the year; but the rates 
in effect under the treaty were temporarily continued. 

21 Art. 25. 
2-2 Art. 26. 

" For statement with regard to reasons for omission of Indo-China, sea chapter on Colonial TariS Policy 
of France, pp. 140-7. 



438 . COLOXIAL TARIFF POLICIES. 

By the four conventional schedules combined, only some 42 articles 
or classes of articles were granted special rates. Some of the treaties 
duplicated the reductions of others, but in general each schedule con- 
tained articles which were, among Japan's imports, of particular 
interest to the trade of the country in whose favor the reduction was 
made. The \>^thdrawal of the German schedules has meant a con- 
siderable restriction in the scope of the conventional tariff, and this 
will be further limited by the termination of the concessions to Italy. 
It has been estimated that, on the most important of the articles for 
which they were granted, the conventional rate averaged about one- 
third less than the statutory rates. 

Countries entitled to the henefd oftTie conventional rutes. — At the end 
of July, 1914, the following countries and colonies were entitled, by 
virtue of most-favored-nation clauses or special arrangements, to the 
benefits of the conventional tariff rates: Argentina; Austria-Hun- 
gary; Belgium; Brazil; Chile; Colombia; Demnark, including colonies; 
France, including Al^-eria and French colonies as indicated above; 
the German Empire, including Grand Duchy of Luxemburg and the 
Austrian Communes of Jungholz and Mittelberg; Greece; Italy; Mex- 
ico; the Netherlands, including colonies; Norway; Peru; Russia; Siam; 
Spain, including the Balearic and the Canary Islands; Sweden; 
Switzerland; the United Kingdom of Great Britain and Ireland, 
including India and Canada; and the United States of America, in- 
cluding outhdng possessions. Since September, 1914, Austria-Hun- 
gary and the German Em_pire have been dropped from this list. By 
virtue of a new treaty concluded in 1914, Bolivia has been added to 
the list; and by virtue of a treaty of November 11, 1919, Paraguay.^* 



For a period of more than 20 years imm.ediately preceding 1899, 
Japanese statesmen addressed themselves to the recovery of Japan's 
tariff autonomj^. That secured, their object in the framing of their 
first tariff law Vfas to increase the revenues while at the same time 
encouraging the development of domestic industries and export 
trade. To this end, new import duties v/ere imposed, particularly 
on manufactured articles, duties vvere removed from a considerable 
number of raw materials, and all export duties Vv'ere removed. 
During and immediately after the Russo-Japanese War, necessity 
for greater revenues led to the increasing of the import duties. It 
was found that the extensive concessions of the conventional sched- 
ules agreed upon in the treaties of 1899 interfered with the fiscal 
and protective policy to which the Government was increasingly 
committed. At the same time, various economists, editors, politi- 
cians, and Government officials- urged the advantages of the high 
protective tariffs of Occidental countries and pointed wuth admira- 
tion to the German ''scientific tariff." The revision of the tariff 
which produced the tariff law of 1910 vras, therefore, conducted 
with a view both to improving the revenue features of the S3'stem 
and to establishing barriers for the protection of growing Japanese 

i* The treaties ^vith Argentina, BoliA'ia, Brazil, Chile, Colomhia, Mexico. Pern, and the United States 
called for conditional most-favored-nation treatment. The most-favored-nation treatment between China 
and Japan, based upon Arts. IX and XV of the treaty of 1896 and Art. IX of the treaty of 1903 remains 
unilateral in Japan's favor. 



jAPAijT. 439 

industries; and in the negotiation of the new treaties, care was taken 
to limit the number and extent of the tariff concessions. 

In 1915, impelled in part by the effects of the war upon Japanese 
trade, the finance department conducted extensive investigations 
with a view to revision of the schedules and extension of the draw- 
back system and customs warehouse facilities. The principle guid- 
ing the administration in the revision was explained in the Japan 
Times at the time as follows: 

The revision * * * will affect-np small number of dutiable articles. The 
imposition of a tariff on these raw materials, importation of which has stopped, or haa 
declined during the war, will be canceled or decreased with a view to encouraging 
the domestic manufacturing industries.^ On the contrary, the tariff on those goo(k' 
which have come to be produced in this country (Japan) since the outbreak of the 
war will be increased as a means of protecting and stimulating domestic commerce.^* 

Legislation along these lines has since been enacted. 

COLONIAL TAEIFP POLICY—ASSIMILATION. 

Japan's policy with regard to the dependencies is obviously and 
simply to effect complete tariff assimilation. Broadly speaking, 
the tendency of Japanese policy is to regard the dependencies not 
as ^'colonies" but as outlying portions of the Empire; the depend- 
encies are to have their special administrations but not political 
or economic individuality. 

In 1916 provision was made that nuts and fruits produced in Korea 
should pay when imported into Japan 30 per cent ad valorem; this 
rate was a little below that paid by the same articles when imported 
into Japan from other countries. ''Pigs and blocks of metal" from 
Korea v/ere made duty free on importation into Japan. This pro- 
vision was designed to assist certain Japanese refining companies 
which were operating in Korea. Such provisions are, of course^ 
preferential; and it was promptly charged that these alterations were 
at variance with the Japanese declaration of August 29, 1910. The 
application of the policy of assimilation began in 1909 with the exten- 
sion of the Japanese tariff to Formosa and Saghalin. When Korea 
was annexed in 1910, for diplomatic reasons the Japanese Govern- 
ment made the pledge set forth in the next section, and tariff assimi- 
lation was postponed until August 29, 1920. Thfe Korean tariff has 
not yet been made identical in' all respects with that of Japan, but 
otherwise the policy of tariff assimilation has been carried as far as 
possible, since the treaty obligations detailed below prevent the 
assimilation of the tariffs of the leased territories. 

Free trade between Japan on the one hand and Formosa and 
Saghalin on the other existed even before the assimilation of the 
tariffs of these dependencies/^ imports from Korea were granted 
free entry to Japan at the time of its tariff assimilation; but products 
of Kiaochow and Kwantung, where the Japanese tariff can not be 
applied^ continue to be dutiable. Slight concessions, however, were 
made in 1906 and 1916 in extending to certain colonial products the 
benefit of Japan's conventional tariff rates. In September, 1906, the 
benefit of the whole conventional schedule was granted to products 

25 Japan Times, Oct. 8, 1915. Reported by the American consul general at Yokohama. 

's Trescher, E: Vorzugszolle, Ihre Geschichte und Wirkung im internationalen Warenaustausch, 1908, 
\). 136. A portion of the Formosan export duties were refunded upon the importation of the articles into 
Japan. 



440 coLOisriAL tariff policies. 

of Kwantung, and in November the benefit of the conventional rate, 
upon tin in lumps and slabs and upon mercury was granted to 
products of Korea and China.-' 

TREATY RESTRICTIOXS UPON ASSIMILATION OF KOREA AND LEASED TERRITORIES. 

(a) Korea. — From 1883 until the annexation of Korea by Japan 
in 1910 the Korean tariff had been based on treaty provisions, par- 
ticularly those of the treaty of 1883 with Great *^ Britain. Imme- 
diately after the annexation the Japanese made a declaration as 
follows : 

O^ing to the termination of the treaties concluded with Korea, the conventional 
tariff hitherto in force in Korea equally ceases to be operative. However, having in 
view the fact that the annexation is necessitated essentially by considerations of a 
political character, the Japanese Government are anxious to avert, as far as possible, 
prejudicial effects upon the economic interests of foreigners in Korea, andare. moreover, 
conscious of the_ adAisability of abstaining fi'om measures which may bring about 
radical changes in the economic relations between Japan and Korea. They have 
therefore decided of their own accord to maintain the customs tariff hitherto enforced 
in Korea for a term of 10 years in respect of foreign trade as well as national. « 

(Jb) Kvjantung Leased Territory and KiaocJiow Leased Territory. — 
When Germany leased Kiaochosv from China it was agreed in the 
convention of March 6, 1898, that the matter of customs should be 
left to a later agreement. In the next year it was agreed ^^ that the 
Chinese imperial maritime customs should continue to function, but 
that the conmiissioner of customs at Tsingtao should be of German 
nationality, appointed with the approval of the German legation at 
Peking, and that the Europeans on his staff should be of German 
nationality. The Leased Territoiy was to be a ''free" area, but 
goods imported by sea for transportation to the interior and goods 
entering from the interior for export by sea should be subject to the 
regular duties of the Chinese tariff. ^^ Special regulations vrere agreed 
upon for control of the importation of opium, arms, and explosives. 

A few months later John Hay, American Secretary of State, secured 
the exchange of notes between the United States and six powers — ■ 
France, German}^, Great Britain, Italy, Japan, and Russia — whereby 
those powers pledged themselves to follow in respect to their respec- 

merchan- 
treaty ports 

within such spheres ; that the duties should be collected by the Chinese 
Government, and that there should be no discrimination in the matter 
of harbor dues or railwajr charges. ^^ 

In 1905 another agreement was reached ^^ in which it vvas provided 

that : 

^ t 

27 Imperial ordinances Nos. 262 and 304, September and November, 1906. In 1906 Korea had not yet 
been annexed. Since the concessions of Japan's conventional tariff were made to Great Britain, France, 
Germany, and Italy and in respect to articles in which those countries were specially interested, it makes 
little difference to the colonies of Japan, whose products are so different from those of Europe, whether or 
not they enjoy the same concessions. 

a Official Japanese statement, Aug. 29, 1910. Quoted in La^\'ton, L.: Empires of the Far East, vol. 2, 
p. 1095. 

28 Sir Robert Hart and the German minister, Apr. 17, 1899. Text in Eockhill: Treaties, Conventions . . . 
etc., Vol. II (190S), p. 32. 

29 See below under tariffs of dependencies and leased territories individually. 
20 Texts in Malloy: Treaties, Conventions . . ., etc., Vol. I, (1910), pp. 244-260. 

31 Sir Robert Hart and German minister, Dec. 1, 1905. Text in Eockhill: Treaties . . . etc., Vol. 11, 
p. 46. 




JAPAN. 441 

After the delimitation of the Tsingtau free area by the German officials, the Chinese 
maritime customs established in the German territory will levy all the duties on goods 
passing outside the free area, and the Chinese Government will hand over annually 
to the German officials at Tsingtau 20 per cent of the net import duties collected, as 
shown by the statistics of the Kiaochow customs, as its contribution to the expenses 
of the territory. This percentage will be fixed for the present provisionally for five 
years and payment will be made in quarterly installments after the end of each quarter. 
If this arrangement fixing the contribution at 20 per cent should at any time seem to 
either party to require amendment, notice is to be given to the other before the begin- 
ning of the fifth year in order to afford time for consideration. (Art. I.) 

Up to the present (1921)j.io change in the percentage has been 
made. 

In respect to Kwantung, after Japan had succeeded to Russia's 
rights in 1905, a customs agreement was concluded on May 30^ 1907^ 
between the Japanese and the Chinese Governments. It was agreed 
that an office of the Chinese imperial maritime customs should be 
established at Dairen; the commissioner of customs at that office 
should be of Japanese nationality, approved by the Japanese minister 
in Peking, and the members of his staff should be, as a rule and except 
for temporary assignments, of Japanese nationality .^^ ^phe whole of 
the Leased Territory should be a free area^ but goods imported by 
sea for transportation to the interior or brought from the interior for 
ex|)ort by sea should be subject to the regular duties of the Chinese 
tariff. The arrangement was modeled in general upon that which 
had been adopted for Kiaochov^^, but there was no provision for pay- 
ment of a part of the customs receipts to the local governmental 
administration. 

After the fall of Tsingtao in November 1914, the Japanese military 
administration at Kiaochow undertook to establish a Japanese cus- 
toms administration, but, after protests by the Chinese Government 
and diplomatic pressure exerted by other powers, an agreement was 
arrived at (Aug. 6, 1915) which amounted to recognition and adop- 
tion by Japan of the regime which had been in effect under the Ger- 
man-Chinese agreements, with the difference that Japanese nationals 
of the Chinese customs service were to fill the positions formerly held 
by German nationals in the Tsingtao customs. 

By articles 156, 157, and 158 of the treaty of Versailles it is pro- 
vided that rights, titles, and privileges formerly possessed by Germany 
in Shantung pass to Japan, it may be assumed, therefore, that the 
customs and tariff provisions of the German-Chinese agreements with 
regard to Kiaochow stand, while Japan retains possession, '^ Japan" 
and "Japanese" being substituted for "Germany" and "Germans." 
These provisions are based on the principle of the "open door," 
"equality of treatment," the functioning of the Chinese customs, and 
the application of the Chinese tariff. 

IV, Tariffs in Force ii^ the Dependencies and the Leased 
Territories Individually. 

FORMOSA and SAGHALIN. 

In Formosa and the Pescadores and in Saghalin, the tariff of Japan 
applies except as there may be special ordinances specifying other- 
wise in reference to particular provisions. 

•a Text in Rockhlll: Treaties . . . etc., Vol. II, p. 144. 



442 COLOXIAL TAEIFF POLICIES. 

Figures available for 1918-19 show that the average rates of duty 
collected in Formosa upon all merchandise free and dutiable imported 
from countries other than Japan and Saghalin were 7.8 per cent and 
7.4 per cent, respectively, for the two years. ^^ Salt, camphor, and 
opium are controlled by Government monopolies. 

KOREA (chosen). 
TREATY TARIFF OF 1883. 

When Ja.pan annexed Korea the Japanese Government at once 
declared that it would continue in force for a period of 10 years the 
"customs tariff hitherto enforced in Korea." 

The tariff of Korea from 1910 to 1920 was, therefore, the product 
of Japanese imperial ordinance and legislation recognizing and con- 
tinuing in force — but with some modifications — provisions agreed 
upon in the treaties between Korea and various powers before Korea 
was annexed to Japan. The treaty between Great Britain and 
Korea, of November 26, 1883, provided, in Article V, that ''at each 
of the ports or places open to foreign trade, British subjects shall be 
at full liberty to import * * * and to export * * * all 
kinds of merchandise not prohibited by this treaty, on paying the 
duties of the tariff annexed thereto." In the same article, provision 
was also made for di'awbacks and refunds, and it vras agreed that 
there should be no transit duties in connection with imports trans- 
ported into the interior or goods coming from the interior for export. 
There was annexed to this treaty a set of regulations for the con- 
duct of British trade in Korea, a schedule of import duties, and a 
schedule of export duties; also Rules, among which were provisions 
that (1) ad valorem duties should be calculated on the actual cost 
of the goods at the place of production or fabrication, with the 
addition of freight, insurance, etc., (2) duties might be paid in Mexi- 
can dollars or Japanese silver 3"en, and, (3) the tariffs of import and 
export duties should be converted as soon as possible into specific 
rates. 

The import tariff schedule above referred to contained six groups: 
ly items dutj^ free; II, III, IV, and V, items subject to ad valorem 
duties of 5 per cent, 7 J per cent, 10 per cent, and 20 per cent, respec- 
tivel}^; and VI, goods whose importation Vfas prohibited. 

The export tariff schedule contained two classes: Bullion, coins of 
all kinds, plants of all kinds, samples in reasonable quantity, and 
travelers' baggage, were to be exportable duty free; all other native 
goods or products v/ere to pay an export duty of 5 per cent ad valorem, 
except red ginseng, the exportation of which was prohibited.^* 

This tariff became effective with regard to trade with other nations, 
hj virtue of treaties and most-favored-nation provisions. Although 
the number of Korea's treaties with Occidental nations was limited, 
the provisions of such treaties as Korea made were applied, in practice, 
in relations with all the nations which engaged in commerce with 
Korea. 

S3 The percentages are derived from figures in Supplement to Commerce Reports, No. 58d, Dec. 22, 1920. 
The gross amount of customs revenue was much greater in 1919 than in 1918, but this was due to the great 
increase in the imports from countries whose products were dutiable; the statement that the increase of 
customs revenue in 1919 was due to the importation of a greater proportion of luxuries, dutiable at relatively 
high rates, is contradicted by the figures showing the average rates of duty collected. 

3< For the Great Britain-Korea treaty of 1883 and the Tarifi Schedules and Rules, see Chung, Henry: 
Korean Treaties, 1919, pp. 123-162. 



JAPAN. 443 

The Korean tariff system under the treaties was on the whole 
modeled on that which had been established in China, and the cus- 
toms service was organized by a former official of the Chinese mari- 
time customs. It is interesting to note, however, that in concluding 
their tariff treaty with Korea the British had seen to it that transit 
duties were prohibited. The practice of charging transit duties, 
which has been a cause of much difficulty in China, has not pre- 
vailed and is not found in the Korean system. 

TARIFii-«YSTEM, 1910-1920 

After the annexation, inasmuch as the provisions upon which the 
Korean tariff system was based had never been consolidated, the 
Japanese administration undertook to weld them into a unified cus- 
toms law.^^ The result was the introduction of a law which went 
into effect on April 1, 1912.^® Article VIII of the tariff law provides 
that ^^ provisions * * * relating to importation or exportation, 
respectively apply to imports to or exports from Chosen, from or to 
Japan proper, Taiv\'an, and Karafuto." In this legislation the rates 
of import duty in Korea were practically identical with what they 
had been in the Korean system before annexation ; but export duties 
were abolished — except those on wheat, soy beans, beans, seed of 
Perilla ocimoides, cattle^ cattle hides, coal, and iron ore. Against 
this abolition of export duties, the British and the French Govern- 
ments protested, contending that Japan had undertaken in 1910 to 
retain the existing import and export rates.^^ The Japanese Gov- 
ernment insisted that the declaration of 1910 should be interpreted 
to mean only that the amount of existing duties would not be raised; 
they declared that the imposition of export duties in Korea had been 
a domestic matter, not regulated by treaties with the powers; and 
they proceeded to make the abolition of the export duties effective. 
In April, 1919, the Japanese Government declared the remaining 
Korean export duties abolished. (But see page 445.) 

Ordinances which have been issued in connection with the adminis- 
tration of the customs in Korea have been framed in general on the 
basis of the system in Japan^ but with certain exceptions in view of 
local circumstances. Among other things, the power of the customs 
authorities has been defined and provision has been made for protest- 
ing and appealing against imposition of charges considered exces- 
sive.^^ 

Import duties. — The rates on dutiable imports are in general those 
established in the British-Korean treaty of 1883, accounted for 
above, ranging from 5 per cent to 8 per cent on foodstuffs, raw ma- 
terials, and the more common manufactures, and from 7.5 per cent to 
15 and 20 per cent on luxuries. 

35 Laws and Regulations relating to the Customs of Chosen, compiled by Governor- General of Chosen, 
Keijo, June 1912. See also Chosen Government, Instructions to Directors of Customs Houses, Mar. 30, 
1912, in ''Government of Chosen, Results of Three Years Administration of Chosen since Annexation." 
Seoul, 1914, p. 73. 

S6 Orders No. 17, No. 20 of the Governor- General of Chosen, promulgated Mar. 28, 1912; See Laws and 
Regulations relating to the Customs Tarifi of Chosen. 

?' Their objection was based, from the practical point of view, on anticipation of an adverse effect which 
the removal of the 5 per cent export duty on rice would have — to the advantage of Korean rice— over the 
rice from Rangoon (British) and Saigon ("French) in the Japanese market. 

38 Nine Korean ports had been opened to trade. The Jananese Government soon closed the port of 
Masampo and opened the port of Hsiu-Wiju. The list of Korean open ports is now as follows: Chemulpo, 
Fusan, Gensan, Chinnampo, Seoul, Kunsan, Mokpo, Songchin, Chongchin, Hsin-Wiju. Goods may 
also be entered at three subports, and one port is open to Japanese vessels only, under certain restrictions. 

185766°— 22 ^29 



444 COLOlNlAL TARIFF POLICIES. 

ProTiibitions , — -The importation of the following articles is pro- 
hibited: Counterfeit and obsolete coins, publications and other arti- 
cles injurious to public security or morals, and articles v/hich infringe 
patents and copyrights. Arms and ammunition, and r^d ginseng 
may be imported only by the Government or by those to whom the 
Government grants special permission. ^^ 

Drawbaclis, — -Certain drawbacks have been permitted on goods 
imported for further manufacture or for repair an-d reexport. As 
provided in an ordinance of the governor general in 1913, witii amend- 
ments of 1915 and 1917, the list includes: Tissues, yarns, and threads 
to be used in making drawn work, in stitching, etc.; tissues, etc., 
imported for bleaching and dyeing; furs, hides, or skins for tanning; 
nails, tacks, and articles of metal; paper for making paper hats; leaf 
tobacco for making cigarettes ; soy beans for making oil or oil cake; 
and certain other articles; provided they are reexported within a 
year. 

Free list. — The free list includes the usual provisions for exemption 
of articles for consumption by Government ofhcials, the army and 
navy, foreign travelers and diplomats, and also provides free admis- 
sion for plants and animals for breeding purposes, and for ships stores, 
agricultural implements, books, and packing materials. 

By an order of November 5, 1915, the provision of the law of 1912 
which allowed free admission for reasonable quantities of machinery, 
apparatus, explosives, and chemicals imported by mining companies 
for use in gold, silver, and copper mines was extended to include the 
free admission of all these articles and of basic crude ores to be used 
as solvents when imported by refineries. 

ASSIMILATION OF KOREA's TARIFF, 1920. 

Early in August, 1920, in special session, the Japanese Diet com- 
pleted four laws which revised the tariff relations betvv^een Korea and 
the rest of the Japanese Empire. These laws and the regulations for 
their application became effective on August 29, the day upon which 
expired the pledge of August 29, 1910, for the maintenance of the 
open door in Korea. Of these laws the first (No. 50 of 1920) provides 
for the free importation of merchandise from Korea into Japan, 
except as may be specially provided (see below) ; the third deals with 
penal provisions; and the second and fourth deal with merchandise 
imported from Japan, Formosa, and Saghalin^^ into Korea. 

These two laws (Nos. 51 and 53 of 1920) provide in general for the 
assimilation of the Korean tariff to that of Japan, but the assimilation 
is not complete, since, in applying the Japanese tariff to Korea, 
certain exceptions are made.^^ The law likewise exempted imports 

«9 Art. Vn, Order No. 20, governor general of Korea. Mar. 2S, 1912. 

*o These laws and regulations of 1920 include Formosa and Saghalin throughout and they are included in 
the term Japan in the following discussion. 

■'I And since imports from Japan entermg Korea were required, temporarily, to pay certain Korean duties. 
This postponement of the grant of full exemption for Japanese products was due to the fact that Japan's 
share of the import trade of Ivorea was so large (over 57 per cent in 1920) that it v/ould have embarrassed the 
treasury of the colony to sacrifice at one time so much revenue. (See the Seoul Press of Dec. 23, 1919, and 
May 30, 1920, and the Keijo Nippo of Dec. 21 and 22, 1919.) The law provided accordmgly that imports from 
Japan should remain dutiable at the precious tariff rates. But regulation No. 1 9 (Japanese OfTicial Gazette, 
Sept. 2, 1912) introduced the important proviso that the rates upon imports from Japan should in no case 
be higher than those upon similar foreign products and pro\ided for the collection of duty upon imports 
from Japan only until March 31, 1921, i.e., to the end of the Japanese fiscal year. A further provision of 
regulation 19 was that from the duties otherwise payable (temporarily) upon imports from Japan entering 
Korea should be deducted the amoimt of any drawback allowed in Japan upon the exportation of si m ila r 
articles to foreign countries. 



JAP AIT. 445 

from Japan from the consumption duties of Korea. -^ The tariff 
system of Korea is, therefore, similar to that of the French assimilated 
colonies, in that in both the industry of the mother country is protected 
by the tariff which protects the home market, but the Korean system 
is different, in that the consumption duties are not levied alike upon 
Japanese and foreign products. The Korean ^^consumption" taxes 
have thus become tariff rates for the protection of Japanese industry; 
and for the articles upon which these consumption taxes fall a result 
is obtained which is found only very exceptionally in French assimi- 
lated colonies and not at all in Porto Rico, namely, that the pro- 
ducers and manufacturers of^he mother country receive a higher rate 
of protection in the colony than in the home market. 

The Japanese tariff has not been applied in its entirety to Korea. 
Law No. 53 of 1920 provides the following exceptions: (a) Articles 
previously on the free list (see above) remain free ; (b) a new free list 
is established containing seeds imported by public authorities, pine, 
fir, and cedar timber, coke, rolling stock (including fuel and food- 
stuffs for use thereon) going in or out for the transportation of pas- 
sengers and goods, and the equipment for establishing at one place in 
Korea a plant capable of turning out 35,000 metric tons annually of 
pig iron or steel; (c) special rates are assigned to salt, tobacco, and 
mineral oils; (d) the Governor General is authorized, in case of emerg- 
ency, to remove or reduce the duties upon beans, flour, and certain 
cereals/-'' 

While imports from Korea into Japan entered duty free, certain 
export duties are levied when they leave Korea, in accordance mth 
complicated rules laid down in regulation No. 21.^^ Thus articles 
upon which an excise is levied in Japan are dutiable, with certain 
exceptions, upon exportation from Korea to Japan at the same rate 
as upon exportation from other parts of the Empire. Articles which 
are duty free in Korea or dutiable at a lower rate than in Japan are 
dutiable upon exportation to Japan at an amount which makes the 
total import and export duty of Korea equal to the import duty 
levied in Japan upon the importation of similar articles from foreign 
countries. (This provision prevents the evasion of the Japanese 
tariff by importation through Korea.) The same article may be duti- 
able under both of the foregoing provisions. Textiles manufactured 
in the Japanese Empire and designated by the Governor General of 
Korea are dutiable at 10 per cent of the value of the textiles used as 
raw materials, and confectionery and sugar preserves are dutiable 
at 5 yen per 100 kin (133 pounds) of cane sugar contained therein. 

To the older monopolies of salt and ginseng the Korean Government 
added a tobacco monopoly in 1921. On July 1 regulations very 
similar to those of the Japanese tobacco monopoly became effective 
for the control of the production, manufacture, importation, and sale 
of tobacco. 

<2 The law provided that the following articles shall be exempted from the consiimption tax: Alcoholic 
liquor, beer, refined sake, beverages containing alcohol, soy, sugar, molasses, syrup, textile goods, textile 
manufactures, petroleum, patent medicines, articles resembling patent medicines, playing cards. It is 
believed, though authoritative information is not available, that the list includes all or practically all of the 
Korean consumption taxes. 

"An ordinance of Sept. 12,1919, exempted rice, millet, kaolin, wheat, and wheat flour, and on Mar. 1, 
1920, red beans, soy beans, corn, and "hiye" (a millet) were added to the free list. 

" Japanese Official Gazette, Sept. 2, 1920. 



446 COLONIAL TABIFF POLICIES. 

PREFERENTIAL ARRANGEMENT WITH CHINA REGARDING RAIL-BORNE TRADE. 

A special preferential arrangement, which promotes Japanese and 
Korean trade with. Manchuria at the north Korean border, exists by 
virtue of agreements entered into between Japan and (jhina with 
respect to goods which pass from Manchuria to Korea or vice versa 
by rail; that is, goods to or from points in the interior of Korea (or 
points elsewhere within the Japanese customs regime) which cross 
the Yalu Kailway bridge between Antung on the Manchurian side and 
Hsin (or New) Wiju on the Korean side. The preference consists in 
a reduction in the Chinese, not the Korean, tariff; but, inasmuch as it 
applies to export as well as to import duties, it is, in respect to the 
former, equivalent in effect on trade to a reduction of the Korean 
import duty. The origin and nature of this arrangement are as 
follows: In the Russo-Chinese agreement of 1896 concerning the 
Chinese Eastern Railway it was provided that goods entering or 
leaving Manchuria by the railway should enjoy a one-third reduc- 
tion of the regular customs duties. In the Chino- Japanese treaty of 
December 2, 1905 (The ^'Komura" treaty), by which China con- 
firmed Japan in her possession of the privileges and properties which 
Russia had surrendered by the Portsmouth treaty, it was provided 
that ^'the Governm.ents of Japan and China engage that in all that 
relates to frontier trade between Manchuria and Korea most-favored- 
nation treatment shall be reciprocally extended." Japan subse- 
quently built a first-class railway from the Yalu River to Mukden, 
thus linking up the Korean trunk line with the Manchurian and 
Chinese lines and the Trans-Siberian. This having been done, the 
Japanese asked the Chinese Government for a reduction of the rates 
of duty upon imports and exports crossing the frontier by this railway, 
similar to that which had been accorded the Russians for rail-borne 
trade crossing the border of North Manchuria. China made this 
concession in an agreement of June 2, 1913. This agreement provides 
for a reduction by one-third of the Chinese import and export duties 
for rail-borne goods crossing the Yalu Bridge; but, to be entitled to 
this reduction, goods passing from Korea must have boarded the 
railway at points south of Hsin- Wiju, and goods from Manchuria 
must be destined for points beyond Hsin-Wiju.*^ The reduction 
applies both to customs duties and to transit duties, but it can not be 
claimed for goods merely in transit through Manchuria. Theoretic- 
ally the reduced rates apply to and affect equally the goods and trade 
of any and all shippers. In practice, however, inasmuch as most 
of the trade by this route is in Japanese and Korean hands, this 
special provision affords a distinct advantage to Japanese and Korean 
trade, in both directions, and not alone locally, in competition with 
the generally sea-borne and full-duty-paying trade of foreign mer- 
chants.^® 

*5 This specification was intended to prevent abuse of the pri\'ilege by use of Hsin- Wiju as a port for 
transfer between rail and steamer. 

4b ''When the one- third reduction in duty on goods imported into Manchuria from or through Chosen went 
into effect in 1913 the rail route through Antung [the Chinese fort at the northern end of the bridge] became 
cheaper for the Japanese exporter than the water route through Dairen or Newchwang." Arnold: Com- 
mercial Handbook of China (Report on Antung, by Consul John K. Davis), p. 394. 



JAPAN. 447 

KIAOCHOW. 

In the German-Cliinese customs agreement of 1899 ^'^ it was provided 
that the whole of the Kiaochow Leased Territory should be a free 
area; but by the agreement of 1905 ^ the free area was limited to a 
specified restricted area at the port of Tsingtao. The Chinese 
maritime customs, administered locally by a commissioner of Japan- 
ese ^^ nationality, levies the duties payable on goods which pass the 
bomidaries of this area, and pays 20 per cent of the receipts to the 
local government — the remaining 80 per cent going to the Chinese 
Government. The duties charged on imports to and exports from 
the hinterland which pass through the port are those of the Chinese 
tariff. These duties are specific, according to schedules which have 
been fixed on the principle of charging 5 per cent ad valorem.^*' The 
Chinese system also provides for the (optional) payment of 2 J per 
cent, or one-half of the customs duty, as commutation of liJcin^ this 
payment to secure for the importer or exporter a transit pass which 
is supposed to free his goods from the imposition of any other charges. 
In the 1905 agreement (Sir Robert Hart and the German minister, 
Dec. 1, 1905), concerning the Tsingtao custom^s, it was specially 
provided that the following goods should be admitted duty free: 

(a) Articles for arming and outfitting the troops, including uniforms, if directly 
ordered by the military or naval authorities and if accompanied by certificate of the 
colonial government. 

(6) Stores and provisions ordered by the military or naval authorities in anticipation 
of future requirements, if accompanied by certificate of the colonial government. 

(c) Machinery, plant, as well as parts of machinery, implements and tools required 
for manufacturing, industrial, and agricultural purposes; also all building materials, 
fittings, and other articles for public and official works. -^ * * 

(d) Articles (Vehicles and such like) passing to and fro between the free area and 
outside, solely for ordinary repairs; but they are to be reported to the customs officers, 
that their passing may be noted. 

(e) All postal parcels imported and destined for private use in German terr'tory, if 
the duty which has to be taxed in accordance with the attached declaration does not 
exceed |l (value ?^20). The customs are at liberty to examine such parcels and verify 
declarations as occasion demands. 

(f) The personal luggage of passengers, declared as not containing dutiable or 
contraband goods; it will only be examined in cases where the customs consider it 
especially necessary. 

Manufactures produced within the Leased Territory from raw 
materials imported from the hinterland or by sea are, at reshipment, 
subject only to such duty payment as can be claimed under the 
Chinese tarm on the raw material. 

When they began their attack on the Germans in 1914, the Japanese 
military forces seized the Shantung Railway, and since the f aU of 
Tsingtao they have administered both the Leased Territory and the 
railway. For some months, none but Japanese. vessels were permitted 
to enter Kiaochow Bay. Subsequently there has been much com- 
plaint that the privileges of duty free entry have been abused and 
that opium and arms are being imported into China illegally through 
the port of Tsingtao. 

« Rockhill: Treaties . . . etc., Vol. II, v. 32. 
^•8Ilo.,p. 46. 

« Before 1914, German. 

so The latest revision of tlie Chinese tariff schedules— intended to render the 5 per cent ad valorem "effect- 
ives—was made in 1918-9. 



448 colo:n'ial tariff policies. 

KWANTUNG. 

The Russian Government, after securing the lease of Kwantung, 
declared the whole Territory a free area.^^ By the Chinese- Japanese 
agreement of May 30, 1907,^- the whole Territory continues a free 
area. On imports by sea for local consumption and on exports of 
local produce or of merchandise manufactured from produce raised 
in or imported by sea no duties are collected. 

Imports passing to, and exports which have originated in, the 
hinterland pay the duties of the Chinese tariff (including, at option, 
payment for transit passes) . Goods .manufactured within the Leased 
Territory from materials imported from the interior pay export 
duties ^'the same as * * * paid by articles in similar circum- 
stances in the * * =^ Leased Territory of Kiaochow." ^^ 

As at Kiaochow, the customs administration is Chinese, the com- 
missioner being of Japanese nationality. The customs offices are at 
Dairen, with a branch office at Pulantien, the railway station at the 
frontier. 

The railway to the interior is owned and controlled by Japanese. 
In former years there was much complaint to the effect that Japanese 
imports passing to the interior were being favored both in regard to 
customs charges and in regard to transportation and other facilities 
afforded. 

Bibliography. 

[See also the general works listed on p. 835, and the texts of treaties listed on p. 834.J 

Japan. The Import Tariff of Japan. (1906.) 

Japan. The Import Tariff of Japan. (1911.) 

Japan. Financial and Economic Annual. Tokyo. 

Japan. Bureau of Comm_erce and Industry. General View of the Commerce and 
Industry of the Empire of Japan, Paris, 1900. 

Japan . Department of Finance . Annual Returns of the Foreign Trade of the Empii'e 
of Japan. Tokyo. 

Japan, Department of Agriculture and Commerce. Statistical Reports. Tokyo. 

Japan Gazette (for Eugene Fox, Yokohama Foreign Board of Trade). The New 
Japanese Statutory Tariff and Conventional Tariffs. Yokohama, 1911. 

Japan Times. The Revised New Import Tariff of Japan. Tokyo, 1913. 

Japan Year Book. Tokyo. Annually. 

Japan. (H. I. J. M.'s Commission to the Panama-Pacific International Exposition.) 
Japan as it is. San Francisco, 1915. 

Japan. Government of Chosen: Results of Three Years' Administration of Chosen 
since Annexation. Seoul, 1914. 

Japan. GoA^ernment of Chosen. Reports on Reforms and Progress in Chosen. 
Annually. 

Japan. Laws and Regulations relating to the Customs of Chosen, compiled by the 
Governor-General of Chosen. Keijo, June, 1912. 

U. S. Department of Commerce and Labor. Bureau of Manufactures. Tariff Series 
No. 28, Customs Tariff of Japan (Intro, by Frank R. Rutter); Washington, Gov- 
ernment Printing Office, 1912. Supplement, Tariff Series No. 28a, 1913. Sup- 
plement, Tariff Series 28b, 1914. 

U. S. Department of Commerce and Labor. Report on Trade Conditions in Japan 
and Korea. (By Raymond F. Crist.) Washington, Government Printing Office, 
1906. 

U. S. Department of Commerce and Labor. Bureau of Foreign and Domestic Com- 
merce. Foreign Tariff Notes. 

£>! Imperial order of July 30, 1899. Text in Rockliiil: Treaties . . . etc., Vol. I, p. 370. 

62 Rocknill: Treaties . . . etc., Vol. II, p. 144. 

63 Agreement of 1907, Sec. A, 7. Rockhill: Op. cit.. Vol. II, p. 145. 



jAPAi!ir. 449 

U. S. Foreign Relations. 

U. S. Tariff Commission. Japan: Trade during the War. Washington, 1919. 

Bank of Japan. The Recent Economic Development of Japan. Tokyo, 1915. 

Arnold, J. Commercial Handbook of China. U. S. Department of Commerce, Misc. 
Series No. 84, 2 vols. Washington, Government Printing Office, 1919, 1920. 

Chung, Henry. Korean Treaties. New York, 1919. 

Davidson, J. W. The Island of Formosa, Past and Present. New York, 1903. 

Douglas, R. K. Europe and the Far East. London, 1904. 

Foster, J. W. American Diplomacy in the Orient. New York, 1904. 

Hattori, Y. The Foreign Commerce of Japan since the Restoration, 1869-1900. Bal- 
timore, 1904. 

Herald of Asia, The. Tariff of Japan, Reidsed and Corrected. Tokyo, 1910. 

Hishida, S. G. The InternationjJ Position of Japan as a Great Power. New York, 
1905. 

Kinosita, Y. The Past and Present of Japanese Commerce. New York, 1902. 

Lawton, L. Empires of the Far East. London, 1912. 2 vols. 

Rathgen, K. Die Japaner in der Weltwirtschaft. Leipzig, 1911. 

Tateish, Saijiro. Japans Internationale Handelsbeziehungen. Halloa. S., 1902. 

Takekoshi, Y. Japanese Rule in Formosa. London, 1907. 

Vilenkin, G. A. The Political and Economic Organization of Modern Japan. Tokyo, 
1908. 

d'Autremer. The Japanese Empire aAd its Economic Conditions. London, 1910. 
(Revised French edition, Paris, 1919.) 

Morris, J. Japan and Its Trade. New York, 1902. 

Haushofer. Dai Nihon. Betrachtigung iiber Gross-Japans Wehrkraft, Weltstellung 
und Zukunft. Berlin, 1913. 

Porter, R. P. The Full Recognition of Japan. Oxford, 1911. 



Chapter VIII. 
COLONIAL TARIFF POLICY OF THE NETHERLANDS. 



CONTENTS. 



Page 

I. Introduction: 

The Netherlands' colonies 

Area and population- 
Table 1 

Situation and commercial impor- 
tance of the Dutch colonies— 

The Dutch East Indies 

Trade 

Table 2.— Total trade.... 
Table 3 .—Lea ding e xport s 
Table J. .—Leading imports 
The Dutch West Indies- 
Trade 

Trade between the Netherlands and 

the colonies 

Table 5.— Importsand exports of 

Dutch Ea5t Indies 455 

Table 6.— Totalimports, and im- 
ports from the Netherlands of 
certain leading articles in the 
trade of the Dutch East Indies. 

II. Government of the colonies and making of 

tariffs: 
Administration of the Dutch East Indies. 

Finance 

Table 7.— Revenues and expendi- 
tures „ .- 459 

Administration of the Dutch Westlndies. 459 
Finance 460 



450 
451 



452 

452 
453 
453 

454 

455 



456 



458 
458 



Page. 

III. Colonial tarifT policy and system: 

Dutch tariff pel icy 460 

Tariff pohcy in reference to the col- 
onies 

Java, "Culture '■ sj'stem and monopo- 
lies 

Objectives in colonial policy 

Table 8.— Certain imports into 

the United States 

Treaty provisions 

IV. Tariffs of the colonies indi\idually : 
Tariff of the Dutch East Indies- 
History 

The present tariff- 
Import duties 469 

Export duties 470 

Free ports, etc 472 

Characterization of the system- 
No e\ddence of concealed prefer- 

* ences 472 

Operation of the system 473 

Table 9.— Customs revenues 474 

Tariffs of the Dutch West Indies— 

( 1 ; Dutch Guiana \ 474 

( 2 ) C uragao 475 

Bibliography 476 



461 



462 
464 



465 
466 



466 



I. Introduction. 



THE NETHERLANDS COLONIES, 

The history of early Dutch colonization is the history of the Dutch 
East India and the Dutch West India Companies. 

The Dutch East India Company, chartered in 1602 by the Nether- 
lands States-General, was remarkably successful during the seven- 
teenth century in contending with the Portuguese and the English 
for the control of the trade with the East. In 1619 the Company es- 
tablished its capital at Batavia, on the Island of Java, where the 
heart of the Netherlands' colonial empire has since remained. Dur- 
ing the eighteenth century the Dutch East India Company, under 
pressure from the French and the English, lost important territories. 
At the close of the eighteenth century the company went into liquida- 
tion and the administration of its holdings Vvsls taken over by the 
Dutch Government. During the Napoleonic period all the Dutch 
colonies V\''ere seized by Great Britain, but in the settlement which 
followed 1815, the East Indies were restored. Throughout the nine- 
teenth century the center of Dutch colonial interest remained in the 
islands of Java and Madura, on account of their great commercial 
importance and the large revenue which they yielded the Nether- 
lands' treasurj'. Larger in area than the islands named, although 
much smaller in population and inferior in commercial importance, 

450 



THE NETHERLANDS. 



451 



are Sumatra; Borneo, Celebes, and the Molucca Islands — including 
New Guinea. 

The Dutch West India Company, chartered in 1621, contested the 
western seas with Spain and Portugal, and established colonies in the 
West Indies and on the mainlands both of North and of South Amer- 
ica. But in the New World, as in the Orient, the Dutch were intent 
upon maintaining a trading monopoly rather than upon colonization, 
and gradually here too their possessions were lost. They found it 
necessary in 1662 to surrender to the Portuguese all their territorial 
claims in Brazil. Two years later the English took from them the 
colony of New Netherlands.^ By way of compensation, at the peace 
of Breda in 1667, the British yielded their claim to the colony of 
Surinam (Dutch Guiana) which the Dutch had recently taken from 
them. 

The wars of the French Revolution and the Napoleonic era brought 
the activities of both the East and the West India Companies to an 
end. After peace was made at Vienna in 1815, most of the Dutch 
colonies which Great Britain had seized during the war were restored — - 
Ceylon and Cape Colony (South Africa) being conspicuous exceptions. 
In 1824 Great Britain recognized by treaty the position of the Dutch 
in the East Indies. The Netherlands took no part in the scramble 
for colonies and spheres of influence with which the nineteenth cen- 
tury closed. In location and in extent the Dutch colonial posses- 
sions have remained for a century substantially what they were at the 
close of the Napoleonic era. 

Aeea and Population. 

With a total area of 781,500 square miles, sixty-two times that of 
the mother country ,2 the Dutch colonies have a total population 
estimated roughly at 50,000,000, nearly eight times the population 
of the mother country. From the point of view of colonial popula- 
tion, the Netherlands ranks third among colonial powers. 

The area of the colonies and their population in 1913 are shown in 
the following table : 



Table 1. — Area and population of the colonies of the Netherlands. 




Colony. 


Area 
(square 
miles). 


Popula- 
tion 
(1913). 


Dutch East Indies: 


50,739 

159,739 

72,070 

212,737 

4,065 

17,698 

43,800 

151,800 

16,301 

4,446 

1,863 


36,035,000 




4,792,000 


Celebes 


2,678,000 


Borneo 


1,373,000 


Bali and Lombok * . . . 


1,207,000 




950,000 


Molucca Islands . . . 


400,000 




200,000 


Riau. Linffga Arcliipelaffo 


187,000 


Banka 


113,000 


BiiUton 


58,000 


Total 


735, 129 


47,954,000 








Dutch West Indies: 
Dutch Guiana 


46,060 
403 


91,000 






57; 000 








Total 


46,463 


148,000 









(I It was estimated in 1917 that there were over 47,000,000 natives; 833,000 other Orientals, mostly Chinese 
and Arabs; and 139,000 Europeans, mostly Dutch. 

1 Now New York. 

2 The area of the Netherlands is 12,582 square miles; population 6,779,000. 



452 



COLONIiU. TARIFF POLICIES. 



Situation and Commercial Importance of the Dutch Colonies. 

''No people/' it has been said, ''ever had so definite an aim in 
foreign and colonial policies as the Dutch, and none ever realized 
their aim more completely,"^ From the first, their grea^test object 
had been to secure and control the trade of the "Spice Islands." 
Those islands were finally left to them and the trade has been largely 
theirs. More important, however, intensive agricultural develop- 
ment of certain of their possessions — conspicuously Java — and the 
economic results obtained therefrom, have given the Dutch a unique 
place among colonizing nations. 

the dutch east indies. 

The Dutch East Indies, lying between Asia and Australia, extend 
east and west along the Equator through 46 degrees of longitude and 
17 degrees of latitude. Their total area is m.ore than six times that 
of the Philippines, Borneo, nearest to the Philippines, is divided 
between the Dutch and the British, the Dutch portion being nearly 
three-fourths of the whole. New Guinea, separated from Australia 
by a narrow strait, is also divided, the western half being Dutch and 
the eastern haK British, The island of Borneo is larger than the 
State of Texas, and the Dutch portion alone is larger than Germany. 
Sumatra is a Mttle larger than the State of California; Java is larger 
than Louisiana and larger than Cuba; the Celebes have an area 
greater than that of all New England. Borneo is rich in minerals. 
Sumatra is noted for its production of tobacco and coffee and its 
rubber plantations. Java, the most populous and the richest of the 
islands, is called, because of its fertility and production, "The Garden 
of the East."* 

Trade. ^ — The Dutch East Indies are of considerable commercial 
importance. In 1918 the total imports of the islands amounted to 
568,000,000 florins (approximately $228,000,000)^ and the exports to 
680,000,000 florins (approximately $273,000,000). By far the greater 
part of this trade has grown up since the abohtion of the preferential 
tariff and the decline of the "culture system."^ Between 1876 and 
1914 the total imports had increased 250 per cent while the ex- 
ports had increased 220 per cent. Table 2 shows the imports and 
exports on Government account and by private interests for the years 
1876, 1890, 1900, and 1914. 

Table 2.— Total trade of the Dutch East Indies, 1876, 1890, 1900, and 1914.^ 

[In florins.] 



Year. 


On Government account. 


For private interests. 


Total. . 


Total trade. 


Imports. 


Exports. 


Imports. 


Exports. 


Imports. 


Exports. 


1876. . . 
1890... 
1900. . . 
1914. . . 


5,118,928 

9,602,351 

9,370,149 

31,805,297 


51,168,108 
17, 148, 178 
26,954,304 
38,435,735 


116,392,762 

150,571,366 
186,503,373 
398,353,514 


162,351,660 

159,401,442 
232,079,302 
646, 119, 254 


121.511,690 
160; 173, 717 
195,923,522 
430, 158, 711 


213,519,768 
176,549,620 
259,033,606 
684,554,989 


335,031,458 

336,723,337 

454,957,128 

1,114,713,700 



a Jaarcijfers voor het Koninkrijk der Nederlanden, Kolonien, 1887, 1890, 1914. 

« U. S. Treasury Department, Bureau of Statistics: Colonial Administration, Washington, 1901, p. 1410. 

* See Day, Olive: The Policy and Administration of the Dutch in Java, New York, 1904. Scidmore, 
E. R.: Java, The Garden of the East, New York, 1897. 

6 Most of the statistics given in this section as to export and import values of particular products are from 
the Netherlands East Indies Yearbook, Batavia, 1920. 

6Florin=$0.402. 

^ See p. 462. 



THE IN-ETHERLAI^DS. 



453 



Table 3 shows the values of the exports of the Dutch East Indies 
for certain years of the period 1905-1917. 

Table 3. — Leading exports from the Dutch East Indies. 
[In thousands of florins.] 



Article. 



1905 



1908 



1911 



1913 



1917 



Sugar 

Tea 

Rubber 

Cotiee 

Tobacco 

Copra: 

Java rice 

Pepper 

Tapioca products 

Till 

Kapok 

Petroleum and products 

Rattan 

Groundnuts 

Cinchona bark 

Skins 

Damanak 

Gambier 

Cocoa 

All other articles 

Total....'. 



83,993 

7, 115 

14,610 

19, 626 

38, 539 

30, 409 

4,450 

5,631 

1,973 

15, 791 

2,066 

17,640 

4,580 

443 

6,925 

3,821 

1,907 

2,154 

650 

23, 665 



172,283 

9,450 

6,096 

13, 913 

45,289 

34, 423 

5, 609 

12,341 

4,581 

2,912 

2.275 

24; 189 

5,062 

1,300 

5,747 

4,171 

2,863 

2,712 

1,415 

89. 491 



134,334 

13,610 

6,760 

24, 125 

74, 108 

53,314 

8,299 

12,632 

5,343 

4,375 

6,808 

56,319 

6,658 

3,824 

2,442 

7,449 

2,281 

3,185 

1,679 

41,097 



156, 610 

21,544 

23, 878 

22,914 

92, 149 

55,041 

9,035 

10,397 

9,099 

58,055 

6,594 

39,655 

7,267 

3,074 

4,866 

9,226 

2,798 

3,141 

1,719 

77.143 



212,455 

38, 785 

2 124, 143 

9,137 

14, 276 

28, 02B 



21, 133 

10, 908 

39, 863 

5,373 

150,230 

3,241 

1,866 

2,790 

12, 641 

3,080 

2, 195 

1,239 

95,172 



285, 988 



446. 122 



468, 642 



614,205 i 776,553 



> Includes various gums. 

2 Large increase due to the development of rubber plantations. 



Table 4 gives the values of goods imported into the Dutch East 
Indies in the years for which exports were shown in the preceding 
table. 

Table 4. — Leading imports into the Dutch East Indies. 



[In thousands of florins.] 



Article. 



1905 



1911 



1913 



1917 



Piece goods, bags, etc 

Rice 

Machinery and steam ens^ines. 
Iron and steel, and hardware. 

Foodstuffs, n. e. s 

Earthenware 

Cement 

Glass and glassware 

Artificial manures 

Paints, colors, etc 

Lamps 

Matches 

Coal 

Soap 

Automobiles 

Tinplate 

Chemicals 

Yarn, weaving, binding, etc. . 

Distilled liquors 

Fancy goods 

Milk, condensed 

Paper 

Tea 

Kerosene and gasoline 

Cigarettes 

All other articles 



56, 775 
23, 952 

7,860 
12, 113 
19,533 

2,284 



5,632 
1 

687 
2,520 
4,067 

764 



63,061 



61,929 

39, 166 

12, 200 

15,632 

22, 800 

3,134 

1,411 

1,288 

6,881 

1,332 

651 

3,179 

4,800 

898 

1,402 

2,236 

3,469 

5,903 

2,352 

3,956 

1,378 

3,318 

2,083 

2,600 

183 

39,091 



69, 202 

15,237 

23,765 

34,000 

3,694 

2,698 

1,840 

10,547 

2,565 

1.387 

2,765 

3,314 

1,621 

2,609 

3,633 

3,196 

6,690 

2,287 

5,455 

1,936 

4,254 

2,349 

4,000 

853 

62,285 



111,986 

55,679 

27, 100 

42,031 

30,583 

6,126 

3,915 

2,478 

12, 290 

3,719 

1,753 

3,680 

3,967 

2,300 

5,054 

5,319 

5,403 

8,022 

2,798 

6,128 

2,432 

5,075 

2,969 

3,000 

1,643 

81,233 



Total. 



168 



243,272 



358,964 



436,683 



119,413 

50, 630 

20,114 

29,370 

23,418 

3,059 

3,804 

],733 

15,785 

2,364 

1,100 

3,565 

5,780 

3, 475 

8,682 

3,737 

5,179 

6,098 

2,930 

4, 540 

2,639 

5,911 

3,437 

7,371 

20, 802 

109,828 



464,764 



454 COLOI^IAL TABIFF POLICIES. 



THE DUTCH WEST INDIES. 



Compared with the Dutch East Indies, the western possessions of 
the Netherlands are, in point of size, population, commercial impor- 
tance, and value to the motherland, almost negligible. 

Surinam, or Dutch Guiana, on the north coast of South America, 
and the six islands off the coast of Venezuela, of which Curasao, 
-which gives its name to the group, is the chief, instead of providing 
Holland with a steady source of revenue, as the East Indian posses- 
sions did for so many years, make a constant drain on the Nether- 
lands treasury — both because the home Government undertakes the 
payment of certain fixed expenses of these colonies,^ and because 
the mother country is forced to pay subventions to make up the 
annual deficits. In 1918 the subventions alone amounted to some 
2,000,p00 florins (1800,000). 

Surinam was at one time a profitable sugar colony and gave 
promise of outranking in commercial importance the Eastern posses- 
sions of the Netherlands. It has, however, been retarded mainly 
by the lack of labor. Efforts have been made to supply this neeS 
by introducing Javanese, but without success. 

Curasao is small; the entire area of the group is only 403 square 
miles, and the population is but 57,380. The real native (Indian) 
population is insignificant, as the inhabitants are chiefly negroes or 
coolies. Less than 1 per cent of the population are natives of Hol- 
land. It is important as an entrepot rather than as a producing 
region. Curasao is sometimes spoken of as the ^'Hongkong of the 
Caribbean." Before the war the fine harbor at Willemstad served 
for the transshipment of many million doUars worth of cofi^ee, cocoa, 
divi-divi (a dyewood), hardwoods, and other Venezuelan, Colom- 
bian, and West Indian products which were transshipped to Europe 
and the United States. 

Trade. — Imports into Surinam fell off steadily for several years 
preceding 1916. In thousands of florins they were for the years 
from 19M to 1915, inclusive, respectively, 8,274, 7,494, 7,113, 6,400, 
and 5,446. For 1916, 1917, and 1918 the corresponding figures were 
5,911, 7,646, and 1,158. The exports which had reached a high point 
of 9,457,787 florins in 1913 fell off in 1914 by almost a third. Since 
then they have increased, and in 1917 they amounted to 8,852,170 
florins, but in 1918 feU again to 7,080,019. The chief products are 
sugar, cocoa, bananas, coffee, rice, maize, rum, and molasses. 

The imports of the island of Curasao and of the other islands of 
the colony of Curasao in 1918 amounted to 7,307,823 florins. The 
exports of the colony for the same year were 2,685,828 fl^orins. The 
chief products are maize, beans, pulse, cattle, salt, and phosphate 
of lime. The chief industry is oil refining.^ 

Trade Between the Nethehlands and the Colonies. 

The extent of the trade of the Dutch East Indies with the various 
countries of the world is shown by the figures given in the following 
table : 

8 Day, Clive: The Dutch Colonial Fiscal System, Essays on Colonial Finance, in publications of 
American Economic Association, New York, 1900, 3d series, Vol. I, No. 3, pp. 73-103. 
" Statesman's Ye&r-Book, 1920, p. 1096. 



THE NETHERLAi!7DS. 



455 



Table 5. — Imports and exports of the Dutch East Indies, 1905, 1913, and 1917 } 

[In thousands of florins.] 
EXP0RTS.2 



Country or piace of destination. 



The Netherlands ^ 

Singapore 

Great Britain 

British India (including Pondicherry) 

Hongkong 

France 

Australia 

Japan (including Formosa) 

Penang 

China 

Egypt (including Suez for orders and Port 

Said for orders) 

United States 

Germany 

Malacca 

All other coimtries 

Total 



1905 



Value. 



80,443 
59, 457 

8,162 
12,517 
23, 221 
16, 904 

3, 249 
12, 847 
11,861 

5,185 

24, 481 
12,318 
3,886 
5,688 
5,769 



285, < 



Per cent 
of total. 



28.1 

20.8 

2.9 

4.4 

8.1 



8.6 
4.3 
1.4 
1.9 
2.0 



100.0 



Value. 



172, 616 
109, 671 
23, 934 
88, 924 
34, 193 
26, 715 
12, 847 
35,812 
19,034 
17, 699 

6,478 
13,331 
14,307 

2,097 
36, 547 



614, 205 



Per cent 
of total. 



3.1 

2.9 

1.0 
2.2 
2.3 
.3 
6.0 



100.0 



1917 



Value. 



19,730 
161,484 
85, 274 
68,530 
37,085 
8,523 
23, 427 
31,357 
18, 707 
22, 909 

25,298 
200,080 



7,127 
67,021 



776, 552 



Per cent 
of total. 



2.5 
20.8 
11.0 
8.8 
4.8 
l.I 
3.0 
4.0 
2.4 
3.0 

3.3 

25.7 



8.6 
100.0 



IMP0RTS.2 



1905 



Country or place of origin. 



The Netherlands 

Great Britain , 

Singapore 

Germany 

British India (including Pondicherry) 

French Indo-Cliina. 

Penang 

Australia 

United States 

China 

Hongkong 

Japan (including Formosa) 

Italy 

Belgium 

France 

Siam 

Switzerland 

All other countries 

Total 



Value. 



Per cent 
of total. 



60,754 

31, 931 

49,328 

5,389 

6,960 

2,001 

16,641 

2,737 

3,393 

2,168 

4,114 

2,372 

2,123 

555 

1,285 

2,354 

307 

1,756 



168 



30.9 

16.3 

25.2 

2.8 

3.6 

1.0 

8.5 

1.4 

1.7 

1.1 

2.1 

1.2 

1.1 

.3 

.7 

1.2 

.2 



100.0 



1913 



Value. 



145, 259 

. 76, 571 

67, 847 

28, 776 

22, 746 

15,560 

13, 455 

10, 573 

9,033 

9,231 

7,451 

6,769 

4,359 

6, 198 

3,432 

4,184 

1,063 

4,176 



436, 683 



Per cent 
of total. 



33.3 

17.5 

15.5 

6.6 

5.2 

3.6 

3.1 

2.4 

2.0 

2.1 

1.7 

1.6 

1.0 

1.4 

.8 

1.0 

.2 

1.0 



100.0 



1917 



Value. 



47, 947 

70,807 

119,187 

361 

30,923 

15,336 

17,744 

11, 705 

60,592 

4,982 

10,307 

54,879 

3,501 

12 

2,670 

4,413 

889 

8,508 



464, 764 



Per cent 
of total. 



10.3 

15.2 

25.6 

1.0 

6.7 

3.3 

3.8 

2.5 

13.0 

1.2 

2.2 

11.8 



.6 
1.0 
2.0 

1.8 



100.0 



1 Note the falling off in Dutch East Indies exports to the Netherlands from approximately 28 per cent 
of the total in 1905 and 1913 to 2.5 per cent in 1917, and the decrease in the mother country's share o? the 
colony's imports for the same years from a little over 30 per cent to 10.3 per cent. During this period the 
colony's exports to the United States rose from 4.3 per cent of its total exports to 25.8 per cent while the 
share of its imports coining from the United States increased from 1.7 per cent to 13 per cent. This shift, 
however, was due primarily to war influences, and it is impossible to determine at present how per- 
manent it is. See p. 465. 

2 Other than goods imported or exported on Government account and exclusive of gold and silver. 

Before the war a third of the imports (by value) of the Dutch 
East Indies came from the Netherlands. The percentages were 
36.1 and 33.3, respectively, for the years 1908 and 1913. The values 
of the total imports and of the imports from the Netherlands for 
the principal articles imported and for the years named are given 
in the follov/ing table: 



456 



COLONIAL TAEIFF POLICIES, 



Table 6. — Total imports, and imports from the Netherlands of certain leading articles 
in the trade of the Dutch East Indies: 1908 and 1913. 

[In thousands of florins.] 



Article. 



Piece goods: 

Cotton- 
Unbleached 

Bleached 

Fruited or dyed . 

"Woolen and half woolen . 
Machinery and steam engines 

Earthenware 

Yarns 

Glass and glassware 

Foodstuffs: 

Butter 

Cheese 

Milk 

Distilled beverages 

Beer 

Wine 

Cement 

Drugs and medicines 

Clothing, etc 

Fancy goods, or notions 

Lamps 

Matches 

Paper and paper goods 

Cigars 

Fertilizers, chemical 

Soap 

Paints, etc 

Automobiles 

All other articles 

Total 



1913. 



Total. 



203 
001 
334 
654 
200 
134 
903 



067 
220 
378 
400 
328 
235 
411 
553 
229 
956 
651 
179 
318 
066 
881 
898 
332 
402 
051 



243,272 



From 
the 
Nether- 
lands. 



4, 545 

13, 295 

8,786 

913 

11, 878 

2,205 

1,569 

582 

1,276 
212 

1,247 

1,392 
332 
695 
824 
949 
956 

1,944 
248 
924 

1,421 
707 

3,878 

328 

876 

772 

25, 181 



87,935 



Total. 



9,329 

37, 301 

49, 637 

2,661 

27, 100 

6,126 

8,022 

2,478 

2,982 
362 
2,431 
4,400 
2,434 
1,544 
3,915 
4,028 
8,889 
6,128 
1, 753 
3, 680 
5,075 
1,687 
12, 290 
2,300 
3,719 
5,054 
221, 358 



From 
the 

Nether- 
lands. 



4,235 

20, 582 

15,227 

1,166 

16, 881 

2,827 

1,945 

1,021 

1,584 

355 

950 

1,980 

1,074 

877 

1,877 

1,583 

2,504 

3,172 

845 

1,406 

2,241 

1,211 

3,774 

878 

2,222 

2,189 

50, 653 



145,259 



In the seventeenth century the chief staple of the East Indian export 
trade was spices ; in the eighteenth, tea and coffee took first place, and 
sugar rose to importance. In recent years the production of tobacco, 
copra, and plantation rubber has rapidly developed; and spices have 
sunk to an insignificant part of the whole. When the Dutch came 
to the archipelago, Java rice was the chief article of cultivation; the 
subsequent diversification of crops and the great growth in population 
have led to its being necessary at times to import considerable quan- 
tities of rice. Nevertheless one-half of the land under cultivation 
in Java is in rice, and exports of rice continue. In the year 1917, 
11,480,345 acres w^ere devoted to that crop out of a total area of 
20,698,666 acres under cultivation. ^^ Next to Cuba the Dutch East 
Indies is the greatest cane-sugar exporting region. The destination 
of Dutch East Indies' sugar product has shifted considerably during 
the last 50 years. In 1874, 37 per cent of it w^ent to the Netherlands 
and almost as much to Great Britain; later the greater part went 
to the United States, but since 1902 East Asia and Australia have been 
the chief markets. Java tea goes principally to the Netherlands 
and Great Britain; tobacco to the Netherlands; rubber to Great 
Britain, the Netherlands, and the United States; coffee to the 



10 Jaarcijfers (Kolonien), 1917. 
York, 1905, p. 285.) 



(For earlier figure see Reinsch, Paul S.: Colonial Administration, New 



THE NETHERLANDS. 457 

Netherlands, France, and the United States; tin to the Netherlands 
and France; and kapok, a vegetable fiber, to the Netherlands and 
the United States. 

The Netherlands' share of both the export and the import trades of 
the Dutch East Indies colonies may be somewhat larger than the 
officia,! figures show, owing to the fact that Singapore; a free port in 
the British Straits Settlements, with a considerable transshipping 
trade, plays a lar^e part in the Dutch East Indian trade." At Singa- 
pore large quantities of goods from all parts of the world merely change 
bottoms or are landed, stored, and then reshipped; Singapore fre- 
quently appears both in export and in import statistics as the desti- 
nation or source of these goods. 

The war has had a marked effect on the commercial relations 
between the East Indies and the mother country. The crippling 
of communication between Asia and Europe greatly impaired Hol- 
land's position as a transshipment center for Dutch East Indian 
goods, and caused the development of direct shipping and trade 
relations between the Dutch East Indies and Asiatic and American 
countries. This rerouting was particularly the case %vith the trade 
with the United States. Before the war the directorates of many 
of the large East Indian establishments were in Europe. A large 
number of these concerns kept the enthe disposal of their produce 
to themselves, bringing it to European, and very largely to Dutch, 
markets. The war has compelled many of these firms to dispose 
of their products in the Java market.^^ 

The Dutch, although viewing these developments with alarm,^^ 
appear to realize that Holland can not maintain her somewhat arti- 
ficial position as a transshipment center for Dutch East Indian 
products not bound for Europe. They also perceive that the 
resources of the colonies must be further developed.^* Accordingly, a 
new policy of inviting foreign capital to cooperate with Dutch capital 
and leadership in developing East Indian resources appears to have 
been adopted.^^ 

As to her western possessions, the year before the war, Holland's 
share of Surinaiii's imports was 56 per cent and of its exports 40 per 
cent. This large proportion appears, however, to be due not to any 
concealed tariff preference, but to the usual causes which tend to make 
the mother country figure in the trade of a colony. These, in the 
case of Surinam, are reinforced by its lack of general commercial 
importance, in consequence of which ships of nations which have no 
special sentimental interest in the colony are little attracted to its 
ports; and also by the fact that the Dutch steamship lines touching 
at Holland's western possessions received considerable subsidies in 
the guise of postal subventions. 

" In 1917, 20 per cent of the imports and 25 per cent of the exports. 

12 The Dutch East Indian Archipelago, Fortnightly Commercial Review, Java, Vol. I, No. 1, May-June, 
1918. 

B •' This change is causing some anxiety in Rotterdam and Amsterdam. " War Trade Board Report on 
Dutch East Indian Trade; cf. Journal of Co mm erce, New York, Aug. 8, 1918; ibid., Nov. 18, 1918, p. 9. 

"''The Dutch tropical lands are, like those of other nations, practically ondeveloped." Keller, 
A. G.: Colonization, New York, 1908, p. 495; cf. L. R. Freeman's article on "The Dutch in Malaysia," 
Contemporary Review, April, 1914, in which the author points out in considerable detail that the resources 
of the islands outside of Java have either been ignored or "wastefully worked out and abandoned like 
exhausted mines. " 

i^Cremer, J. T.: An Example, International Free Trader, Boston, January, 1919. In this article 
the Netherlands Minister to the United States cites the recent development, by United States rubber 
interests, of Sumatra rubber plantations — "now the largest in the world"— as proof that not only is "our 
door opened for commerce but also for certain investments and concessions of another nature. In fact, for 
the purpose of cultivating waste soil, for working manufactories, etc., the foreigner can cooperate with 
Bolland or native industrials on easy souditions.'f 



458 COLOIs^IAL TAEIFF POLICIES. 

II. GOYERNMENT OF TIIE COLONIES AND MaKIXG OF TARIFFS. 

From the governmental point of yiew, the colonies are three in 
number — the East Indies, Curasao, and Surinam. All three are 
under the administration of the minister of colonies in HoUand. 
The Dutch East Indies has a governor general; Curasao and Suri- 
nam have each a governor. 

ADMINISTRATION OF THE DUTCH EAST INDIES. 

For purposes of administration the Dutch East Indian possessions 
are divided into two parts — first, Java and Madura; and, second, the 
Outposts (Buitenbezittingen), com_prising_ the remaining islands.^® 
Java and Madura are subdivided into provinces and residencies while 
the Outposts are subdivided into governments and residencies. In 
the many cases where native sovereigns are permitted to exercise a 
nominal rule they take their instructions am_ounting to commands 
from Dutch residents. 

After the dissolution of the Dutch East India Company at the close 
of the eighteenth century the colony had a varied experience in forms 
of government. In 1824 the Netherlands States-General for the 
first time attempted to take part in colonial affairs. From that time 
on the legislature slovvdy extended its authority over Dutch East 
India. The democratic movement of 1848 resulted in the granting 
to the colonies in 1854 of a kind of constitution (Kegeerings Kegle- 
ment). In 1917 there was instituted in the islands a People's Council 
(Volks Raad),^^ and recently a considerable measure of local self- 
government has been introduced. 

The governor general, whose authority is very great, is assisted 
by a council of five members. This council determ^ines, subject to 
the governor general's approval, the entire local govermental policy 
and administration. Under it are the nine general departments or 
bureaus, among which are finance, justice, and agriculture. 



Dutch financial policy experienced three phases in the nmeteenth 
century. Before 1830 a system of land taxation was tried but found 
misuccessful because of administrative difficulties and the need of 
increased revenues. During the period from 1830 to 1860 the ^^ cul- 
ture" system ^^ was added to the land tax system. Following the 
reforms of the sixties and the gradual abandonment of the ^'culture" 
S3"stemx new taxes Vv^ere introduced to offset the decline in the revenues 
from the '^cultures," and direct governmental administration was 
substituted for the earlier farming out of the taxes. 

Since 1867 the Dutch Parliament has voted the budget of the 
Dutch East Indies. The budget is drawn up provisionally by the 
governor general, the Volks Raad may discuss it, and it is subject 
to revision by the home Government. It is prepared in four parts, 
each ratified by a separate law. One law governs the expenditures 
in the colonies, one the revenue in the colonies, and the rem_aining 

i« Walcott, A. S.: Java and Her Neighbors, New. York, 1914, p. 341, et seq. 

" Waerden, J. Van der: America's Interest in the Netherlands East Indies, in The Americas, January, 
1919, pp. 21-24. 
18 See p. 462. 



THE NETHERLANDS. 



459 



two deal with the expenditures and revenues of the Dutch East 
Indian Government in the Netherlands. The entire budget with 
an explanatory message from the colonial minister, is submitted to 
a committee of five in the lower house of the Dutch Parliament. 

After the budget has been passed, the governor general has power 
to change its provisions through and within the authority granted 
him to make transfers of appropriations within the limits of a sub- 
division. As the subdivisions of the budget are rather broad, this 
power is practically legislative in nature. ^^ The budget is adminis- 
tered according to the provisions of the finance act of 1864, which 
has been repeatedly revised and amended. In 1912 this act was 
amended to make the Dutch East Indies a person at law, with 
power to raise loans on its own account. 

In the states still under native rule, public exchequers have been 
established in order to separate the public revenues from the personal 
incomes of the native rulers.- In 1914 there were about 80 such 
states. 

The principal taxes in Dutch East India now are the land tax, 
levied upon the natives by villages rather than as individuals;^^ the 
business tax, collected from natives, Europeans, and alien Orientals 
on different ]3ases;^^ a consumption tax (mainly on house rent, furni- 
ture, and horses and carriages) imposed on Europeans and foreign 
Orientals; a tax on public sales; a poll tax, which is mainly a com- 
mutation of the earlier labor dues; import and export duties; excises; 
and certain Government monopolies. The chief sources of revenue 
have been the Government monopolies and Government industries. 
The land ta.x comes next. The leasing of certain privileges is a 
source of some small revenue. Excise duties, levied on matches, 
domestic liquors, petroleum, and, in Borneo, on tobacco, bring in 
considerable amounts yearly. Imports and export duties make up 
but a small percentage of the revenues. 

The total expenditures of the Dutch East Indies increased between 
1906 and 1916 by about 130 per cent. The revenues and expenditures 
of the years 1918, 1919, and 1920 (estimated), which have been 
greater than those of any preceding period, were as follows: 

Table 7. — Revenues and expenditures} 
[In florins.] 



Year. 


Revenue. 


Expenditiire. 


Deficit. 


1918 . 


384,694,066 
397,677,584 
485, 880, 715 


490,859,021 
544,191,895 
565,690,216 


106,164,955 
156,514,311 


1919 


1920 


79,809,501 





1 statesman's Year-Book, 1920. 



ADMINISTRATION OF THE DUTCH WEST INDIES. 



Surinam is administered by a governor and a council of five mem- 
bers (of which the governor is president) appointed by the Crown. 

'* Day. Clive: The Dutch Colonial Fiscal System, in publications of Am. Econ. Assn., 1900, 3d series, Vol, 
I, No. 3, pp. 73-103. 

20 This land tax levied upon the natives is paralleled by a tax on real property which is held by title in 
the European manner. 

«i The average payment per capita in 1895 by natives in Java and Madura was 1.73 florins; while Chinese 
with a higher tax rate, paid 10.56 florins per capita. Europeans paid as a business tax 2 per cent olthe net 
income received from any form of gainful enterprise. 



185766' 



-30 



460 COLONIAL TAEIFF POLICIES. 

There is also a representative body in the colony called the '^Colonial 
States," the members of which are chosen for six years, 

Curasao has a governor who is assisted by a council of fom' mem- 
bers. There is also a colonial council of thirteen members nominated 
by the Crown. The different islands of the colony of Curasao, with 
the exception of the island of Curasao, are under officials who are 
nominated by the Crown, 



In Surinam the governor and the Colonial States may in theory 
determine the revenue and expenditures of the colony, subject to 
the approval of the Crown, " The salary of the governor and the ex- 
penses of the army and navy are paid by Holland and are for that 
reason removed from the governor's sphere of action. In practice, 
too, the budget is generally acted on by the Dutch Parliament, under 
the provision that if it is not submitted within the proper time, or if 
it is unsatisfactory to the Crown, or if the revenue provided is insuf- 
ficient to cover the expenditures, and the financial aid of the mother 
country is invoked, the control of the budget passes to the home 
government,^^ In Curasao the revenue and expenditures may be 
passed upon by the governor and the colonial council, but as a matter 
of fact the Dutch Parliainent ordinarily enacts such legislation. 

Neither in Surinam nor in Cm-apao was there an indigenous civili- 
zation with an established tax system as there was in the East Indies. 
Hence the sj^stem of taxes is entirely of European device. The reve- 
nues are derived from im.port and export duties, excises, land taxes, 
personal imposts, and certain indirect taxes. Import duties and the 
internal tax on liquor are the most important sources of revenue. 
Export duties were maintained in Surinam until 1895, when they 
were replaced by a tax on gold production. The revenues are insuffi- 
cient to meet the expenditures, however, and the deficit is made up 
by subventions. 

In 1920 the revenues, expenditures, and subventions in the case 
of Surinam were as follows: Expenditures, 5,152,000 florins; local 
revenue, 3,527,000 florins; subvention, 1,555,000 florins.^* Between 
1881 and 1895 Curasao was self-supporting, but in the latter year 
there was a deficit of 80,388 florins which the home Government had 
to make good, and since then subventions have been paid regularly. 
The subvention for 1919 was estimated at 793,722 florins. 

Ill, Colonial Tariff Policy and System. 

DUTCH TARIFF POLICY. 

As far back as her history as a colonizing power goes, HoUand has 
cherished free- trade traditions. During the seventeenth and eight- 
eenth centuries, while the comxpeting nations of western Europe 
were employing protectionist methods in the intere'st of their manu- 
factures, HoRand pursued a more liberal commercial policy. It was 
not, indeed, that she adopted free trade as an abstract principle but 

22 Day,"Clive: The Dutch Colonial Fiscal System, in publications of Am. Eeon. Assn., 190G, 3d series, 
Vol. I, No. 3, pp. 73-103. 
24 Statesman's Year-Book, 1920. 



THE NETHERLANDS. 461 

rather from motives of self-interest. Wherever possible she sought 
special trading privileges for hei-self. 

Most of the Dutch wars were waged for commercial purposes, and nearly all their 
wars were closed by a commercial treaty by Vv'hich the Netherlands strove to secure 
preferential treatment, not freedom of trade for themselves. ^^ 

At the close of the Napoleonic war the Dutch adopted a policy of 
moderate protection. Differential tonnage duties were established 
in favor of Holland's flag; also, corn duties; and bounties were paid 
on the exportation of sugar refined in Holland. The tariff duties 
were, however, relatively low. After Belgium separated from Hol- 
land, in 1830, the Dutch reduced these tariff' duties. In 1842 the 
import duties on yarns, threads, and woven goods ranged from one- 
half of 1 per cent on linen yarn to 10 per cent on lace. Cotton woven 
goods of all kinds paid 4 per cent. At that time goods imported in 
Dutch vessels or in vessels of countries with which Holland had 
treaties of reciprocity paid 10 per cent less than the general duties,^® 

The tariff act of 1862, in addition to abolishing export duties, 
levied ad valorem duties in place of practically all of the earlier spe- 
cific duties and lowered the rate, making 5 per cent the maximum 
amount charged.^^ This was the rate charged on manufactured 
goods. Semimanufactured goods paid 2 or 3 per cent, and raw 
materials were admitted free. These low rates have been continued 
to the present time, with some modifications. 

In recent years there has been considerable agitation in favor of 
a protective tariff, directed chiefly against Germany. It is con- 
tended, however, by the free traders that Holland has not a suffi- 
ciently large consuming population to form a basis for a self-con- 
tained economic unit. There has for som.e time been talk of a pro- 
tective tariff to insure the permanence after the war of the new indus- 
tries which the war has caUed into being, but there seems little likeli- 
hood that the principle of virtual free trade will be displaced. 

Occasionally there is a revival of a proposal to grant special tariff' 
privileges in Dutch ports to colonial goods, but it seems unlikely 
that anything will come of the discussion, since nearly all foreign 
products are now admitted either free or at very low rates of duty. 

TARIFF POLICY IN REFERENCE TO THE COLONIES. 

The interest of the Dutch as traders which had led them to adopt 
a liberal commercial policy at home did not operate in the same 
direction in the Dutch colonies. There ' ^ they fought for a trading 
monopoly wherever they went."^^ Exclusive privileges were given 
to great trading companies in the east and the west, and these 
companies sought in the spirit of the age to extract the full benefit 
of their concessions. After the fall of the companies at the close of 
the eighteenth century the monopolistic spirit still prevailed in the 
relation of Holland to her colonies, especially in the East Indies. 
Here the Dutch Government enjoyed a monopoly of the chief ex- 
portable products, not only as against foreign nations, but also as 
against its own subjects. The manner in which this monopoly was 
exercised is set forth in the following section. 

25 Barker, J. Eliis: The Rise and Decline of the Netherlands, London, 1906, p. 125. 

26 MacGregor, John: Commercial Tariffs and Regulations, Pt. VI, p. 105. 

27 See the introduction to Tarif des Konigreichs der Niederlanden, Haag, 1862. 

28 Barker, J. Ellis: The Rise and Decline of the Netherlands, p. 132. 



462 COLONIAL TARIFF POLICIES. 

Legislation was adopted in 1872 looking toward the abolition of 
preferential tariff treatment for Dutch goods in the ports of the East 
Indies, and at the present time Holland does not enjoy any tariff 
advantages there, just as the colonies do not have a preference in 
the ports of the mother countr}^. Any attempt on her part to 
impose a differential duty in the colonies in favor of her own manu- 
factures might in the end be highly injurious to her, since she is not 
a manufacturing but rather a commercial and a carrying nation, 
and such a polic}^ would suggest retaliation on the part of foreign 
countries against the products of the Dutch East Indies, in which 
she is directly interested. Dr. lieringa speaks of a proposal which 
was made by a member of Pa^rliament in 1880 to reintroduce differ- 
ential duties in the Dutch East Indies in the interest of ' ' the declining 
textile industry^' of the Netherlands, which was said to be ''bleed- 
ing to death ' ' in consequence of the adoption of protection by Ger- 
manv, but he makes no mention of any later agitation in this direc- 
tion>^ 

A certain amount of manufacturing activity is beginning to show 
itself in the islands, and there is a demand in some quarters that this 
be fostered by a protective tariff. This movement has not, how- 
ever, been general!}^ supported, but an alternative proposal, made 
in 1918, that half a million florins be set aside as a fund to support 
the infant industries in the Dutch East Indies by means of bounties 
has met with more favorable consideration. The natives, hov^^ever, 
who, through the recently established people's council (Yolks Raad), 
are given some opportunity to express their views, oppose this as 
being purely in the interest of the Europeans. ^"^ 

JAVA, "culture" system AND MONOPOLIES. 

In spite of the broad expanse of her island empire in the East 
Indies, Holland has in the past devoted her colonizing efforts mainly 
to the cultivation and development of Java and the neighboring 
island of Madura. Sumatra, Borneo, Celebes, and the Moluccas, 
although larger in area, are very much inferior in number of inhabi- 
tants and are officially reckoned among the '^Outposts.'' It is 
upon her success in Java that the fame of the Netherlands as a 
colonizing power chiefly rests. Java is almost the only colony of 
modern times which, for any considerable length of time, has furnished 
a large and regular revenue to the mother country. During the 40 
years which followed 1830 this island, with its large Malay population 
and its small leaven of Dutch overseers and officials, poured into the 
Dutch treasury a stream of treasure whose exact volume is not 
IvQown, but which is estimated at over $360,000,000, and which has 
served to reduce the national debt, to build railroads at home, and 
later to pay the expenses of the war against the natives of northern 
Sumatra.^^ 

The system whereby this was effected was the so-called ' 'culture" 
system. According to the theory of this system the Dutch, in 
commutation of an old rent and labor tax, required the natives to 
plant one-fifth of the village lands in sugar cane or other §rop suitable 

29 Heringa, A.: Free Trade and Protectionism in Holland, London, 1914, pp. 10-11. 
80 The Dutch East Indian Archipelago, in Fortnightly Commercial Review, Vol. I, No. 4, September, 
1918. 
31 Day, Clive: The Dutch in Java, p. 309. 



THE NETHERLANDS. 463 

for export, such as tea or coffee, and to devote one day's labor in 
seven to the cultivation of the crop. One- third of the sugar crop 
thus produced was taken over by the Government at a nominal cost, 
while the remaining two-thirds might be sold to the Netherlands 
Trading Company, which held the monopoly of transport and sale of 
Government produce.-'^ The culture system was remarkably success- 
ful in producing revenue for the mother country, and, according to a 
romantic version which has a wide vogue in the literature of the 
subject in the English language, it was of incalculable benefit to 
the natives. ^^ But in pra^ice it appears to have involved much 
experimentation at the ex|)ense of the natives in the introduction 
of crops unsuited for the island. Moreover, it frequently proved 
inconvenient to restrict the burden to one-fifth of the land or one- 
seventh of the labor time, and there often resulted a great amount 
of hardship from the excessive labor demands.^^ 

Liberal sentiment in the Netherlands finally demanded reform, 
both on the ground that the system, was ''a cruel and unjust exploi- 
tation of the natives, and because it practically excluded individual 
enterprise from the agricultural industry ' ' in the colony ,^^ and 
in the period between 1860 a.nd 1865 the Government cultures of 
tea, tobacco, indigo, pepper, and cinnamon were given up,^® By 
1890 the transition had been made from forced to free culture of 
sugar, and the only Government culture that continued into the 
twentieth century was the very profitable coffee culture. 

During the period of the culture system there were also in effect 
preferential tariffs in favor of Dutch goods and Dutch shipping, 
which, in conjunction with the government monopoly and control 
of the export trade, gave the Dutch virtually a monopoly of the 
import trade. Thus the Dutch merchants and carriers were per- 
mitted to levy a tribute upon the colony's imports at the same 
time that the Dutch nation through the monopolistic culture system 
levied a tribute on its exports. During the prevalence of the culture 
system less than 3 per cent of the total Dutch population of the 
islands were engaged in gainful occupations on private account and 
independent of the government monopoly. With the decline of the 
culture system and with the abolition of preferential duties in 1874, 
Dutch individual initiative in the islands was given a chance. 
Foreign enterprise, however, continued to be restricted and ham- 
pered, in some instances by general laws — such as those of the land 
system, whereby title to the soil remains in the Dutch government 
and by which foreigners were discriminated against in the leasing 
of the land^"^ — sometimes by petty regulations. The coasting trade, 
moreover, is still reserved exclusively to Dutch vessels. Thus the 
virtual monopoly, at least of agriculture and internal -^trade and 

S2 Scidmore, E. R.: Java, The Garden of the East, p. 101. 

33 For an account of the origin and spread of this ^iew see Day, Clive: The Dutch in Java, p. 253. 

34 A scientific critic in summing up the effects of the culture system says: '' The forced services proved 
to be an intolerable burden in many parts of the island * * *^ Populous regions lost as much as one- 
half or two-thirds of their inhabitants through emigration * * *. In the famine of 1849-1850 over one- 
third of a million people died in central Java, in one of the richest parts of the earth, v/hich now maintains 
a population that has doubled in numbers." Day, Clive: The Dutch in Java, p. 315. 

35Beinsch, P. S.: Colonial Administration, p. 284. 
^ Day, Chve: The Dutch in Java, p. 335. 
37 Ibid., p. 374. 



464 



COLONIAL TARIFF POLICIES. 



commerce, simply passed from the government of Holland to indi- 
vidual Hollanders. ^^ 

About 90 per cent ol the world's production of cinchona hark is 
obtained from Java, the rest coming from British India, Ceylon, 
and Latin America. Dutch manufacturers early insisted on receiv- 
ing the entire Java product; until 1916 almost the entire export was 
shipped to Holland; later, Japan was permitted to take 10 per cent 
of the product; and finally, British manufacturers succeeded in 
buying by contract from the British planters in Java. During the 
past three years Great Britain and the United States became large 
scale buyers. According to official statistics, the exports of cinchona 
bark from Java in recent years have been as follows: ^® 

[In units of 1,000 kilograras.] 



Country. 


1913 


1914 


1915 


1916 


1917 


1918 


1919 (10 
months). 


Holland , , 


9, 359 
34 


6,842 
2 


5,870 


8,811 


1,101 
900 
767 




264 


Great Britain 


744 

1,156 

18 

415 

106 


2,177 
1,639 


United States.... 






British India 










221 


Japan 






3 


34 


29 
45 


307 








37 














Total 


9,393 


6,844 


5,873 


8,845 


2,842 


2,439 1 4,645 



OBJECTIVES IN COLONIAL POLICY. 



The development of agriculture and of the external commerce of 
the islands has become more important to Holland and to the pros- 
perity of the Dutch than the retention of the islands as a market 
where Dutch wares shall receive the preference. Holland is a ship- 
ping and a middleman's country, rather than a manufacturing and 
industrial State; and a great part of the shipping of the Dutch, as 
well as of their barter, has depended on the grov%^ing export trade 
of the islands. Of this growmg trade, about one-third passed through 
the mother country in the years preceding the war, much of it on 
its way to other destinations. In some instances, because of the 
ultimate destmations of the goods, Rotterdam and Amsterdam are 
logical markets or ports of transshipment , This is particularly true 
when merchandise is bound for certain parts of Germany. In other 
cases, for instance, when goods have been destined for the United 

38 "Dutch suspicion still throws as many difficulties as possible in the way of a tourist, and it took strong 
preventive measui'es against an influx of British or other ult lander planters when the abandonment of the 
culture system made private plantations desirable, and the opening of the Suez Canal brought Java so 
near to EiKope. * + * Land transfers and leases were weighted with inconceivable restrictions and im- 
positions; heavy taxes, irlcsome pohce and passport regulations, and nearly as many restraints as were 
put upon Arabs and Chinese, urged the British planter to go elsewhere, since he could not have any voice 
m local or colonial government in a lifetime." Scidmore, K. R.: Java, the Gardenof the East(1897), p. 119. 

"There is no doubt that the Dutch * * * are not desirous of attracting tourists or travelers to Java 
* * * The Government also puts difficulties in the way of aliens Mishiug to settle. * * * There is a 
good deal of tmth in the statement that Java is kept tightly closed." Colquhoun. A. E.,: The Mastery of 
the Pacific (1902), pp. 3.'l!.2. 

"Nearly all the Europeans in Java are Dutch. Holland * ^ * has had no need to borrow, as it were, 
from other nations, either colonists, merchants, manufacturers, or money." * * * 

"The European non-Dutch element (not counting Euronean soldiers) 'consisted in the year 1907, of 800 
Germans, * * * about 180 English, 274 Belgians, 146 French, and a few Italians." Cabaton, A.: Java, 
Sumatra, and the other islands of the Dutch East Indies, 1911, p. 171. 

It will be noted that all the above authors refer to a period now some years past. ^More recently the 
Dutch seem to welcome tourists, at least to some parts of the country, and have invited foreign Capital 
to enter the islands for the purpose of developing certain lines of industrial activity. Long-time Govern-^ 
ment leases of agricultural lands and concessions for the exploitation of mineral resources, however, can' 
be granted only to (a) Dutch subjects, (b) citizens of Holland, (c) citizens of Dutch East Indies, and (d) trade 
partnerships established in Holland or in the Dutch East Indies. 

»9 From Blokzeyl, K. R. F.: Supplying Quinine for the World's Ills. Trans-Pacific, Vol. II, No. 4, 
April, 1920, p. 56. 



THE NETHERLANDS. 



465 



States or South America, this routing has been, from a geographical 
point of view, highly arbitrary. 

During the war the Dutch were, hj virtue of the rerouting of 
the world's trade, in danger of losing this transshipping business and 
the middleman's profit on East Indian goods. (See Table 8 below). 

One precaution which the Netherlands Government is said to be 
taking against this danger is the continuation and extension of its 
system of paying heavy subventions, in the form of postal subsidies, 
to Dutch shipping companies engaged in colonial trade. 

Dutch shipping still has^he exclusive right to the coasting trade 
of the archipelago. Most of the European carrying trade of the Dutch 
East Indies is in the hands of the Rotterdam Lloyd Company and the 
Dutch Navigation Company. In the total carrying trade of the 
islands, however, England comes first. Up to the outbreak of the 
war, Germany was second and HoUand was third. Holland is now 
making every effort to take the place which Germany formerly 
occupied.*^ 

Table 8. — Imports of certain commodities to the United States (^: Total, amounts from 
HoUand, and amounts from the Dutch East Indies, showing changes in routing during 
the war.^ 



Commodity, 



Total im- 
ports. 



Amount 

from 
Holland. 



Amount 
from Dutch 
East Indies. 



Percentage 
of total 
which 

comes from 
Holland 

and Dutch 

East Indies. 



Percentage 
of total 
which 
comes from 
Dutch East 
Indies 
direct. 



Cinchona bark (pounds) 

Quinine (ounces). 

Pepper (pounds) 

Tobacco, suitable for cigar wrap- 
pers (pounds) 

Tin (tons) 

India rubber (poimds) 

Kapok (tons) 

Gutta Joolatong (pounds) 

Gutta-percha ( pounds) , 



1913 
1917 
1919 
1920 
1913 
1917 
1919 
1920 
1913 
1917 
1919 
1920 

1913 
1917 
1919 
1920 
d 1913 
dl917 
1919 
1920 
1913 
1917 
1919 
1920 
1913 
1917 
1919 
1920 
1913 
1917 
1919 
1920 
1913 
1917 
1919 
1920 



3,553,239 

2,531,397 

5,981,293 

4,087,746 

3,185,984 

1,264,357 

3,948,945 

5,181,989 

27,562,361 

23,961,966 

22,826,245 

13,828,183 

6,398,782 

3,941,936 

7, 154, 142 

9,925,025 

52, 141 

71,718 

44,849 

44,489 

113,384,359 

333,373,711 

535,940,421 

568,548,136 

2,824 

6,861 

10, 972 

9,881 

45,345,338 

23,376,389 

18, 662, 702 

12,705,923 

480,853 

2,021,794 

6, 495, 818 

7, 129, 127 



3,493,945 

2,329,664 
13, 297 

2, 589, 555 
956,533 
901,794 
551, 461 
766,012 

7,605,171 
27 



1^757,685 

6,193,042 

2,426,322 

109, 723 

7,720,255 

275 



20,000 

100 

4, 527, 856 

270, 688 

289, 792 

301, 430 

1,265,736 

1,710,197 

2,809,047 

13,880,177 

17, 794, 310 

5,480,495 

20 
1,191,560 
6,504,615 
2,102,664 



1,025 

917,795 

102,726 

2,637,665 

8, 859, 178 

281 



1,533,986 
115, 136 



110 

1,080 
22, 188 



15,843 

2,524 

1,687 

80,840 

45,027,410 

61,260,330 

72,374,169 

2,415 

6,688 

10, 894 

9,547 

423,785 

8,073,588 

4, 568, 968 

2,542,559 



92.0 
75.9 
70.3 
39.1 
95.1 
46.0 
47.8 
37.7 
58.5 
77.9 
52.3 

96.7 
91.8 
92.4 
98.9 
0.5 
22.0 
5.6 
6.1 
0.8 
13.5 
11.9 
14.3 
95.0 
97.4 
99.3 
96.7 
0.4 
35.0 
24.5 
20.0 



75.7 
6.7 
9.0 
23.8 
32.1 
33.0 
10.1 
68.5 
77.9 
39.6 



30.2 
90.9 
21.2 



22.0 
5.6 
3.S 



13.1 
11.4 
12.7 
85.0 
97.4 
99.3 



34.0 
24.5 
20.0 



124, 098 



202,815 
1,286,069 
1,852,110 



11.1 

19.8 
27.7 



10.0 
19. S 
25.9 



o U. S. Commerce and Navigation. 

6 In the case of some of the commodities the routing has swung back since the war toward the prewar 
status— i. e., Holland is again the entrepot. 

c 1913 and 1917 fiscal years; 1919 and 1920 calendar years. 
d Calendar years. 



« Cabaton, A. : Java, Sumatra, and the other islands of the Dutch East Indies, London, 1911,pp. 252-254. 



466 COLONIAL TAEIFF POLICIES. 

In recent years there has been a growing conviction on the part of 
the Dutch of the necessity of strengthening the attachment of the 
islands to the home country. The fear is sometimes expressed that 
if Holland fails to live up to her opportunity as a civihzing agency 
in the islands ^ the colony will ultimately fall into the possession of 
some of the rival colonizing countries. This it is felt would he a 
great calamity to the mother country. As one writer has expressed 
it— 

If the Indies have need of Holland, Holland has an even greater need of her colonies, 
the source of her commercial stability and her political power. ^^ 

TREATY PROVISIONS. 

In most of the treaties of the Netherlands with European countries 
there appears a provision for most-favored-nation treatment in the 
Netherleaids colonies, either on the basis of the treatment accorded 
the ''products and vessels of European nations" or of that which is 
accorded the "like products of any other foreign country/' but an 
exception is regularly made of the treatment accorded products of 
the native states of the Oriental Archipelago. The Netherlands- 
United States treaties of 1839 and 1852 provide for reciprocal favored- 
nation treatm.ent in respect to importing or exporting goods in ves- 
sels of either and to aU duties and charges relating thereto, this re- 
ciprocal equality to extend to the colonies of the Netherlands; but 
further, that the Netherlands m.ay levy discriminatory import and 
export duties in favor of its own direct trade with its colonies. The 
Japan-Netherlands treaty of July 6, 1912, provides for reciprocal 
and unconditional most-favored-nation treatment and contains the 
specification that its provisions throughout shaU apply to all terri- 
tories and possessions belonging to or administered by either country. 
The chief features of the various treaty provisions and the situation 
which they create are essentially epitomized in Article li of the 
France-Netherlands treaty of August 30, 1902, which provides that 
the products of France and the French colonies and protectorates 
(named) are to be admitted in the Dutch colonies at the lowest tariff 
rates applicable to similar products of any other foreign country, 
with the exception of the products of the native states of the Oriental 
Archipelago which are accorded the privilege of duty-free admission. 

IV. Tariffs of the Colonies Individually. 

Those not wishing to follow the detailed discussion of Dutch tariff poUcy as applied in the separate Dutch 
colonies should pass over pp. 466-76, inclusive. They were prepared for' detailed study, not for the 
general reader.] 

TARIFF OF THE DUTCH EAST INDIES. 



When circumstances made necessary a more or less regular system 
of taxation in the Dutch East Indian possessions, one of the first 
sources considered was the imposition of duties on imports and 
exports. The earliest Dutch customs tariff in India was established 
by an edict of Governor Coen, on October 1, 1620. - The duties 
imposed amounted to approximately 5 per cent on imports and from 
5 per cent to 10 per cent on exports.*^ Between that time and the 

«Cabaton, A.: Op. cit., p. 37i. 

« For earl;- nineteenth centiiry see Day, Olive: The Dutch in Java, p. 237 et seq. 

« Berg, N. P. van den: Munt- Crediet-en Bankwezen, pp. 283, 284. 



THE NETHERLANDS. 467 

Napoleonic wars there were many changes. During the period of 
British control, and in fact just before the British left Java (1815-16) , 
the tariff was lowered. That tariff was continued for some time 
after the Dutch regained possession, and while Dutch commerce was 
slowly recovering Great Britain and America extended their trade 
with the islands. 

A demand for a differential of 20 per cent to 25 per cent in favor of 
Dutch shipping, made by the Chambers of Commerce of Amsterdam 
and Rotterdam, resulted, in article 87 of the colonial constitution of 
1815, which laid down the principle that Dutch ships and cargoes 
should pay less than foreign. This was carried out in 1818 by a 
tariff whereby foreign products were subjected to a rate of 12 per 
cent and Dutch to 6 per cent. In the following year, b}^ royal decree, 
Dutch products imported into the colonies in Dutch ships were put 
on a free list. 

In 1824 a law was passed discriminating against foreign piece 
goods, which formed the bulk of the imports for native consumption, 
and in which England had practically a monopoly. This law placed 
a 25 per cent duty on foreign cotton and woolen goods from Europe, 
with a surtax of 10 per cent whenever the goods were iniported 
through an Eastern country. At the same time goods from Holland 
were admitted free or on payment of but 6 per cent. Although these 
provisions were contrary to the treaty made with England a little 
later in the same year, whereby it was agreed that neither power 
should pay, in the Eastern possessions of either, more than double 
the duty which the other paid,^^ the discriminating provision was not 
revoked until 1836, after which Dutch piece goods paid a tariff of 
12|^ per cent and foreign 25 per cent. 

In 1850 there was a slight relaxation of the shipping i^aonopoly, 
and an ordinance of 1858 opened 16 ports to general commerce. But 
the differential duties and surtaxes on foreign shipping continued for 
some years longer.*^ 

Even during the period of the preferential duties, the English and 
Americans were at first able to dispute the market with the Dutch. 
It was partly in consequence of a commercial treaty with France in 
1865 that the discriminatory system began to be modified in the 
direction of low tariff for revenue only. The change began in 1872 
and was completed in 1886. Since then the ad valorem rates have 
been in no case higher than 12 per cent, applying equally to the 
trade of all nations, and intended for revenue purposes only. 

One of the reasons which led to the application of free-trade 
principles to the Dutch colonies was the example of the enormous 
development of Singapore after it had been declared a free port. 
Singapore is the chief port of the Straits Settlements, which are 
separated only by the narrow Strait of Malacca from the east coast 
of the Dutch island of Sumatra, and has become one of the world's 
principal ports of transshipment. This development was so obvi- 
ously due to the absence of any restrictive tariff or excessive pilot- 
age or anchorage dues, that the Dutch, hoping that their colonies 
might become equally important in a commercial and shipping way, 
followed the example set by England in Singapore.^' 

« The text of the treaty is given in MacGregor, John: Commercial Tariffs and Regulations^ Pt. VI, 

46 Leroy- Beaulieu, Paiil: De la Colonisation chez les Peuples Modernes, 5th ed. , Paris, 1902, Vol. I, p. 286« 

« Cabaton, A.: Java, Sumatra, etc., p. 252. 



468 COLON"IAL TARIFF POLICIES. 

At the time of tlie passing of tlie law of 1872, which ahohshed the 
preferential, the East Indian interests were in full accord with its 
abolition, and the Batavian Chamber of Commerce (Java) ^vished to 
go even farther in the direction of free trade and abolish all export 
duties. The Dutch industrial interests neglected their opportunity 
to crush the m^ovement against the differential in its early stages, and 
when at the eleventh hour they began a defensive movement, urging, 
in fact, a complete customs union between Holland and the colonies, 
they were defeated. '^^ 

The law of 1872 gave to the Dutch East Indies, for the first time 
since the Dutch had come to the islands, a genuine revenue tariff. 
It established a considerable free list, an import duty of 6 per cent 
ad valorem on all but a few dutiable articles, and specific taxes 
amounting to somewhat more than 6 per cent, on beer, candles, 
mineral water, flour, gambier, opium, fruit sirups, tobacco, distilled 
spirits, wine, and vinegar. Transit duties were abolished and Kiouw 
in the Kiouw-Lingga Archipelago was made a free port. This legis- 
lation went into effect in January, 1874. It applied originally only 
to Java and some parts of other islands. With various later amend- 
ments it has been gradually extended to the whole country, most 
rapidly since 1899, 

In 1886 need for revenue led to a revision. The rate on a number 
of commodities was raised from 6 per cent to 10 per cent; musical 
instruments, which had before been on the free list, were taxed 10 
per cent, and specific duties were placed on imports of tea, European 
playing cards, and petroleum. The rate on beer was increased. 
Goods not specially mentioned continued to pay a duty of 6 per cent. 
An export duty of 2 per cent was levied on hides and skins and one of 
6 per cent on birds' nests. Specific export duties were levied on in- 
digo, coffee, sugar, tobacco, and tin.*^ 

In 1907 the act was further revised. The duties on certain imports 
underwent further increases, and duties were imposed on several 
items which had formerly been admitted free. 

The territories where import and export duties were levied, origi- 
nally very few, by this time comprised nearly the entire Dutch East 
Indies. In recent years the Dutch have bought up the rights of many 
of the rulers' of self-governing dependencies, fixed incomes being 
pledged to these rulers in return for the privilege of levjnng customs 
duties. Some distinctions were made until recently between the 
various islands, and even between districts and residencies within the 
islands, as to the tariff to be levied. One schedule covered most of 
the area included by Java and Madura, the east coast of Sumatra, the 
south and east districts of Borneo, Banka, Billiton, and some other 
residenqies. The eastern coast of Sumatra, being in close contact 
with the commercially active and free-trade Straits Settlements 
(British), had a separate schedule. This tariff was lower than that 
of Java, even after 1895, when the rates were raised. Instead of the 
6 per cent duties which prevailed elsewhere, there were 4 per cent 
duties; and instead of the 10 per cent duties, 6 per cent. There were 
also other variations in outlying districts. 

. . _ . _ 1 i -jI ^ 

43 Berg, N. P. van den: Munt- Crediet- en Bankwezen, etc.. p. 312 et seq. 
« The export duties on indigo and coSee were repealed in 1901. 



THE NETHEKLANDS. 



469 



THE PRESENT TARIFF. 



The tariff of 1872 was so often modified, amended, and reamended, 
it contained so many special and local provisions, that by the be- 
ginning of the present century it had become what a member of the 
second Chamber called, '^'a Babylonian confusion. "^^ It was accord- 
ingly consolidated and republished in 1910 in simplified form. To- 
day (1921) a single import tariff prevails for the entire ''customs 
territory" of the Dutch East Indies. The export tariffs still vary 
considerably. ^ 

ImfoH duties. — The rates of import duties in force in the Dutch 
East Indies, as determined by the law of March 18^ 1921, are -sug- 
gested by the following tabular statement : 

Duties levied on certain imports in the Dutch East Indies. 





Duties. 


Free list. 












6 per cent. 


10 per cent. 


12 percent. 


Specific. 


Steam engines and im- 


Clocks and 




Gold and silver in 




plements for agricul- 


watches; fire- 




sheets. 




ture and for certain 


arms and parts 




Manufactures of 




otiier purposes; in- 


thereof; small 




iron, steel, lead, 




struments — mat h e- 


wares (a consid- 




copper, and 




matical, pliysical. 


erable number 




zinc; carriages; 




surgical, and optical; 


of these are enu- 




musical instru- 




iron, ingots, rods, 


merated); pho- 




ments. 




plates, etc.; steel in 


tographic appa- 




Liquid paint. 




ingots, sheets, etc.; 


ratus. 








copper; lead, crude; 


Machinery, tools. 




Glass and glass- 




tin plate; zinc, crude 
and rolled; gold and 


and iron roof- 




ware. 




ing. 




Leather, and ma n - 




silver ingots; jewelry. 






factures of. 




Tiles; lime, coal, and 


Clay and porce- 






Petroleum. 


coke. 


lain articles. 








Sail cloth; ropes. 






Clothing. 


Cement. 


Timber; barrels for ar- 


Wood, manufac- 


Paper. 




Playing cards. 


rack; pitch, resin, 
tar; books, maps, and 


tures of; writ- 


Tissues, and stuffs 






ing and drawing 


of cotton, cotton 






charts. 


materials. 


and wool, yarn. 






Animals, n. o. s.; asses 


Horses. 




Furniture. 


Buffalo&s and neat 


and mules. 








cattle. 


Eice; coconuts; ice; 


Silk. 


Fish; flour; vine- 


Comestibles and 


Beer in casks; dis- 


seeds for agriculture; 




gar. 


beverages, n. o. 


tilled liquors; 


live plajits. 






s.; meats. 


wine; tea; sirups; 
mineral waters; 
tobacco; salt; 
gambler. 
Opium. 


Paintings; fertilizers; 


Gunpowder; all 




Perfumery not con- 


bone black. 


goods not specif- 
ically mentioned 
in the tarifi.i 




taining alcohol. 





1 Many articles for which rates have not been specially established are given the rates which are estab- 
lished for goods of a similar kind in the tariff. Thus motor cars are given by similitude the rate established 
for carriages. 

Owing to the need of more national revenue, the act of 1 92 1 increased 
the import duties, transferring a few articles from the free list to the 
6 per cent schedule and advancing other articles from one schedule 
to the next higher. It is apparent that the free list consists, for the 
most part, of articles necessary to develop agriculture, industry and 
communication, and of foodstuffs necessary to the-natives. Prior to 
the passage of the recent act it was said to include everything which 
is requisite for the internal development of the archipelago or the 
encouragement of its external trade.^^ This statement is still largely 



50 Berg, N. P. van den: Munt- Crediet- en Bankwezen, etc., pp. 321-22. 
a Root, J. W.: Colonial Tariffs, Liverpool, 1906 ,pp. 142,143. 



470 COLONIAL TARIFF POLICIES. 

true, though a few articles which might be included in the above 
classification now pay the minimum duty of 6 per cent. Before the 
act of 1921 was passed the duty of 12 per cent or above was paid only 
on articles which might be considered luxuries, including imported 
foodstuffs. Under the new act, most of the coarser sorts of manu- 
factures are made dutiable at 10 per cent while the finer sorts have 
been raised to 12 per cent, with the exception of silk manufactures, 
which may not be charged more than 6 per cent in consequence of 
the agreement of 1852 with the German Customs Union. Salt and 
canned fish, which constitute an article of diet for the natives, remain 
dutiable at 10 per cent and rice is on the free list. The number of 
articles on the 6 per cent schedule was considerably reduced by the 
new act, various commodities previously on that schedule being now 
dutiable at 10 per cent. 

In 1913 the specific duty on distilled livquors yielded a revenue 
equal to 64 per cent of the valuation declared for these liquors on 
importation. Notwithstanding this and of numerous other duties 
higher than 6 per cent, the free list was of sufficient importance 
to reduce the average rate paid on all imports to a trifle less than 
6 per cent. 

Export duties. — Export duties were formerly more important and 
far reaching than import duties. But with the gradual spread of 
civilization throughout the archipelago it is now possible to levy 
import duties in many parts of the colony where formerly this was 
not possible and where, therefore, export duties were imposed. On 
the other hand, the practical monopoly by the Government of certain 
products, such as sugar, upon which both the culture system and 
export duties for a time rested, no longer exists. Accordingly, the 
tendency has been toward the gradual abolition of the export duties. 
In the 1918 budget, export duties were estimated at only one-tenth 
of the total customs revenue. 

The export duty on sugar, formerly 15 florins per 100 kilos, had 
furnished an important source of revenue.^^ Owing to the depression 
in the sugar industry, the Government was repeatedly forced after 
1887 to suspend the duty, and in 1898 this duty was abolished en- 
tirely.^* It was proposed in 1918 that this duty be revived in order 
to raise revenue for the education of the natives and the enlargement 
of the army and navy. There is, however, little likelihood that this 
proposal will be put into practice.^^ The ex]3ort duties on coffee and 
indigo were respectively 1 florin per 100 kilos and 0.10 florin per 
kilo; these were abolished by act of December 30, 1901, because of 
increasing competition. This left tobacco the only one of the so- 
called culture products of the Indies on which an export duty 
is stiU levied.^® 

A proposal to abolish export duties entirely was lost in the Dutch 
Chamber in 1886 by only two votes; a counter proposal to abolish 
them for exports to the Netherlands only while continuing them in 
force as to exports to the rest of the world was overwhelmingly 
defeated.^'' 

63 Root, J. W.: Colonial Tariffs, p. 144. ' ',::-' 

°^ Dav, Olive: The Dutch Colonial Fiscal System, in publications of the Am. Econ. Assn. 1900, 3d series, 
Vol. I, "No. 3, p. 87. 

*•' Dutch East Indian Archipelago, Vol. 1, No. 2, July, 1918. 

^6 Berg, N. P. van den: Munt- Crediet- en Bankwezen, p. 320; Root, J. W.r Op. cit., p. 144. 

'•''' Reinsch, P. S.: Colonial Administration, p. Ill; Day, Clive: Dutch Colonial Fiscal System, In pub- 
lications of Am. Econ. Assn., 1900, 3d series, Vol. I, No. 3, p. 87. 



THE NETHERLANDS. 471 

Beginning January 1, 1919, the old export duty of 0.03 florin per 
hectoliter for petroleum or its products was replaced by much higher 
and more detailed duties, which were expected to net an annual 
revenue of 2,500,000 florins in place of the 1,000,000 florins which had 
been the approximate yield of the old duty.^^ 

The export duties in Java and Madura are (July, 1921) as follows :^^* 

Hides and skins ■ 2 per cent. 

Tobacco (not prepared for inland market) 1 florin per 100 kilos. 

Tin, and tin ore in proportion 3.50 florins per 100 kilos. 

Birds' nests r^ 6 per cent. 

Kerosene, and petroleum products (not specified) ...... 7.50 florins per 1,000 kilos. 

Residue, solar oil liquid fuel, filter-press oil, grease, fat, 

batching oil, pitch, and wax oil 1.70 florins per 1,000 kilos. 

Conra f^^^®^ on the difference between the average 
PeDDer 1 i^^^'^^t price and the average cost price, in- 

'^P ' I creased by 10 per cent 8 per cent. 

Rubber, when the market price per one-half kilo is — 

0.825 florin or less Free. 

exceeds 0.825, but is less than 0.90 florin I per cent. 

thereafter, as the price increases by increments of 
.10 florin, the duty rises to ^ per cent, 1 per cent, 
and by increments of 1 per cent to 7. per cent. 

For the purpose of fixing rates, the outer possessions are divided 
into four districts, with the exception of certain sections which are 
assimilated to the Java-Madura Customs Zone. In each of these there 
is in force for the most part the schedule of export duties of Java 
and Madura, and in addition a separate tariff. These tariffs vary 
greatly, owing to local conditions, and the rates ran2:e from as low as 
4 per cent on pepper from Grand Atjeh, to the full 10 per cent on 
bird skins from Borneo,^® which is the maximum the governor general 
is authorized to impose in the outer possessions. 

Exemption from export duties in the outer possessions is granted 
OR gutta-percha obtained b}^ industrial process from the leaves of 
the gutta-percha trees, and on gutta-percha and rubber produced 
on plantations specially devoted to the regular cultivation thereof; 
but only when so certified by an offi.cial of the Dutch Government. 
The duties collected on tobacco, which is next in importance to 
sugar among the products of the islands, account for about one- 
third ^^ of the total revenues from export duties, having taken in 
this respect the place formerly held by sugar. The rate amounts 
to about $0.40 per 100 kilos. The rate on tin amounts to $1.47 
per 100 kilos of the pure metal. This is supplemented by the 
revenue which the government gets from mine leases in all cases in 
which it does not actually own and work the mines. 

Government exports, like Government imports, until recently paid 
no duty. In 1913 these amounted to 57,230,689 florins, or about 
one-twelfth of the total exports of merchandise from the islands. ^^ 

^ Dutch East Indian Archipelago, vol. 1, No. 1, May- June, 1918, p. 6. 

58a Commerce Reports, June 14, 1921. Slab rubber receives a reduction of 12 per cent. Coconut oil is 
dutiable per 100 kilos at the rate levied on 125 kilos of copra. Cinchona bark and sulphate of quinine 
are dutiable on a sliding scale. _ _ _ 

Export 



florins. Jaarcijfers, etc. (Kolonien), 1916. 

61 The-falling oflE in the percentage of Government exports, not merely at the time of the abolition of the 
cultures, but since then, has been marked; Adz, 10.5 per cent of all exports were on Government accormt 
in 1903, 8.4 per cent in 1913, 5.7 per cent in 1914, 1.5 per cent in 1915, and 1.3 per cent in 1916. Jaarciifers 
(Kolonien),, 1917. 



472 COLONIAL TAEIFF POLICIES. 

In 1897, export duties netted the treasury about 2 million florins, 
in 1913 about 2f millions, and in 1918 a little over 3 millions. ^^ 

Free jyorts^ etc. — In half a dozen ports, such as Batavia, Samarang, 
and Surabaya, there are public stOTehouses where goods may be 
kept before pa^dng import duties. Kiouw was designated a free port 
many years ago, largel}' in the hope of rivaling the commercial 
success of the free ports of the Straits Settlem_ents.^^ There were 
formerly a number of other free ports in the islands, such as Amiboina, 
Bonda^ and two others in the Moluccas, but these were included in 
the customs territory at the end of 1903. As they were of little 
importance this move met with no serious objection. One reason 
why an exception is still m.ade in the case of Riouw is its geographical 
position,^^ which is such that smuggling would be almost inevitable; 
the cost of preventive measures would in all probability consume 
most of the revenue which could be derived from, customs duties. ^^ 

CHARACTERIZATION OF THE SYSTEM. 

The tariff system at present in force in the Dutch East Indies 
is for revenue only. It has been much praised. An English wiiter 
has declared that it "leaves on tlie whole little to be desired. 
It is long established, has been continuous, and yields good re- 
sults * * * "68 r|Tj^Q system contains no tariff preferences; the 
duties imposed are the same for imports from, and exports, to all 
countries; it provides for no favors on the part of the colonies to 
HoUand and none on the part of Holland to the colonies. 

No evidence of concealed f references. — With regard to the entire 
question of concealed preferences, evidence that they exist seems 
to be lacking.®^ On the other hand the positive statement that 
no preferences of any kind are granted either to Dutch goods in 
the colonies or to colonial goods in Holland has been made re- 
peatedly by neutral observers.®^ 

Under the colonial tariffs of 1872 and 1886 there was what clearly 
seemed to be an attempt to protect local tobacco against the com- 
petition of the Manila and Habana products. Under the earlier act, 
tobacco in general paid an import duty of 8 florins per kilo, Manila 
and Habana tobacco 30 florins; cigars in general paid 50 florins per 
100 kilos, Manila and Habana cigars 200 florins. The tariff of 1886 
left out aU special mention of Habana cigars or tobacco and of 
Manila tobacco. But Manila cigars continued to be dutiable at the 
rate of 200 florins, as against a 50-florin rate on all other cigars. 
The protection apparently attempted in this case was intended, it 
would seem, to operate in favor not merely of colonial growers, 

62 And this notwithstanding embargoes and restrictions on tin and certain other exports, due to the war. 
United States Commerce Reports, No. 100, Apr. 29, 1918, and No. 106, May 6, 1918. 

63 Netherlands East Indies Yearbook, 1920, p. 48. 

« Off the north coast of Sumatra, opposite the Straits Settlements. 

65 Very recently the Government ordered the local authorities to inquire into the advisability of making 
the harbor of Maeassar a free port, or at least of assigning a certain quarter of the harbor as an area of 
exemption from duties and excises. "Dutch East Indian Arcliipelago, vol. 1, No. 3, August, 1918, p. 85. 

66 Root, J. W.: Colonial Tariffs, p. 145. 

^ The statement is made, however, by one writer, A. R. Colquhoun, in The Mastery of the Pacific, p. 
352, that "the customs regulations seem to aim at excluding the foreigner.'^ The possibihty of seriously 
hampering the foreigner by petty minor regulations which do not appear in the published tariffs is very 
real. And although many of the earlier extremely burdensome restrictions and recrulations were done 
away vnt\i by ordinance of Oct. 1, 1882 (Staatsblad No. 240), it is within the bounds ol possibility that 
restrictions discriminatory in effect persist to-day. 

68 E, g., '-'The tariff * * * is conceived on liberal lines and used purely as a means of collecting 
revenue for purposes of efficient administration." Root, J. W.: Op. cit., p. 140. 



THE NETHERLANDS. 473 

but of Dutch manufacturers, since much of the Sumatra product, 
after being worked up into cigars in Dutch factories, is reshipped to 
the Indies. The Dutch disavowed any protectionist motives, 
declaring that the difference in the duties was based simply on a 
difference in value; in short, that the rates of duty were approxi- 
mately equal. This contention, however, does not appear to be 
borne out by the facts, as Manila cigars can claini no superiority, 
unless perhaps in packing, over those made of local tobacco, for 
which, indeed, they are sometimes mistaken.^^ The present tariff, 
however, has dropped all special mention of Manila cigars, and 
these are now admitted on equal terms with all others. 

Until recently ail goods imported for the use of the Government 
were free of duty. This included imports needed by the Government 
for the carrying on of its industries, as well as for public improve- 
ments in the islands."^^ Whenever possible such goods have been, of 
course, purchased from the mother country. This is selection in 
buying, not preference in tariff policy. Imports of goods on behalf 
of the Government amount to only about 6 per cent of the total 
imports into the islands."^^ Nevertheless their value is considerable, 
amounting in 1914 to 28,485,296 florins. 

An act of January 15, 1916, amended the provision permitting 
Government imports duty-free admission, and provided that such 
imports shall pay the usual duty unless the governor general makes 
a special exemption or grants a drawback. It is not likely, however, 
that this Y/ili produce much effect on trade as the East Indian Gov- 
ernment will, presumably, continue to buy of, and sell to, the home 
country as far as possible. 

The calculation of the ad valorem, duties in no way depends upon 
statements of shippers or importers as to the value of their goods. 
The Government requires only a correct description of the articles 
imported. The value is determined by reference to a manual con- 
taining the current prices, which is revised and reissued every quarter 
year by the director of the department of finance. The ad valorem 
duties are calculated on the basis of these prices rather than on either 
the fluctuations of the market or the statements of the parties 
interested. If the Dutch East Indian administration wished to 
grant to imports from the Netherlands a concealed preference, one 
possible way of so doing would be to adjust the valuations contained 
in this quarterly manual in such a way as to bear more heavily upon 
foreign and more lightly upon Netherlands goods. There is, however, 
no indication that any such practice prevails or that the motive for 
this system has been anything but a desire to simplify customs 
procedure. 

OPERATION OF THE SYSTEM. 

The abolition of the previous system of preferential import and ex- 

f^ort duties (abolished in 1872-1874), which duties had contributed 
argely toward restricting Dutch East Indian trade to Dutch com- 
merce and Dutch shipping, had a very favorable influence both upon 
East Indian trade and upon Dutch commerce and industry.'^ 

«»Iloot, J. W.: Op. cit., pp. 141-142. 

TO " Ports Mv8 been improved, docks built, rivers deepened, roads constructed, public buildings erected, 
cities sanitarized, and various other engineering works undertaken. Vast outlays have necessarily been 
entailed." Morris. H. C: History of Colonization, 1900, p. 348. 

n 5.2 per cent in 1903; 5.8 per cent, 1913; 6.9 per cent, 1914; 4.5 per cent, 1915. Jaarcijfers (Kolonien), 1915. 

T2 " The trade not only of the Indies but of the Netherlands as well gained by the change." Day, Clive: 
Dutch Colonial Fiscal System, in publications of Am. Econ. Assn., 3d series, Vol. I, No. 3, p. 86. 



474 



COLONIAL TAEIFF POLICIES. 



Between 1862 and 1893 the revenues from import duties, although 
they underwent some fluctuations, remained, on the whole, stationary. 
In 1894 there was an increase of over a million florins, and during the 
10 years following there was a slight rise. In 1905 there was another 
gain of a million florins, making the total annual receipts from this 
source 12,821,000 florins. Since then it has increased still more 
rapidly, amounting in 1913 to 25,132,269 florins. There has been 
some falling off during the war. 

The customs duties constitute somewhat less than one-half of the 
taxes levied by the Government, and somewhat less than one- 
seventh of the Government's gross revenue. The customs yield has 
in recent years, and up to the outbreak of the European war, increased 
rapidly because of the increase in volume of trade. The import duty 
is the most important of all the indirect taxes. The revenue from 
this source rose from 17,645,000 florins in 1910 to 25,132,000 florins 
in 1913, i. e., an increase of nearly 50 per cent in three years. In 1916 
it amounted to 24,909,000 florins.^^^ 

The following table shows in florins the specific amounts received 
from the four most important commodities taxed, as well as the total 
revenue derived from East Indian import duties in recent years :^^ 

Table 9. — Revenue from duties on importation of certain articles, together with total 
revenue from East Indian import duties for specified years. 

[In florins.] 



Commoditv. 



1911 



1913 



1915 



Fabrics (tissues) 

Distilled liquors 

Food (except butter and fish) 

Fish - 

Total (including duties on all other 
imports) 



5, 522, 621 
1, 583, 671 
2,314,684 
1,244.058 



20,483,020 



5,831,367 
1,610,308 
2, 428, 830 
1,127,804 



7,096,779 
1.795,618 
2,91.5,919 
1,155,187 



6,358,099 
1, 737, 173 
2,846,013 
1,093,543 



21,966,683 



25, 132, 269 



23,232,061 



5,718,234 
2, 774, 150 
2,811,208 
1,124,245 



22,644,828 



In the 1918 budget, import duties for that ^^ear were estimated at 
27,700,000 florins, or 7.2 per cent of the total revenue, and 20 per 
cent of the total revenue to be raised by taxation. 

TARIFFS OF THE DUTCH WEST INDIES. 

(l) TARIFF OF DUTCH GUIANA. 

Dutch Guiana has a fairly liberal tariff policy. There is a con- 
siderable free list, inclucUng machinery of practically all kinds, iron, 
steel, and other metals, railway and telegraph supplies, plants and 
manures, ice, pit coal, and cattle for slaughtering, breeding, or dairy 
purposes. There is a relatively short list of specific duties inter- 
spersed by a very few ad valorem rates of 10, 15, or 30 per cent. 
Goods not enumerated pay an ad valorem duty of 10 per cent. 

Most foodstuffs are dutiable. Among possible motives for the 
imposition of a duty of 10 florins per 100 kilos on coffee and a duty 
four times as heavy on tea, may have been a desire to increase the 
local consumption of cocoa, one of the products of the colony; or a 



'3 Jaarcijfers (Kolonien), 1913, 1916. 

1* Figures taken from the Jaarcijfers for 1915, Chapter on Finance, p. 147. 



THE NETHERLAInTDS. 475 

desire to encourage the growth of tea and coffee. Still these rates 
are not high, and the duties may have been levied purely for revenue. 
The rates on most other foodstuffs are specific. The ad valorem 
duties are as follows: 

Parts of firearms, and fireworks, 30 per cent; playing cards, 
jewelry, and perfumery, 15 per cent; canned fish, certain m.eats, 
flour (in small packets), and all unenumerated articles, 10 per cent. 
These duties are levied on the price current in the colony which is 
arrived at by adding 20 per cent to the invoice price » 

In 1898 the duties on distilled liquors, opium, cigars, and tobacco 
were increased, and in 1907 the duties on butter, beer, distilled prod- 
ucts, matches, opium, cigars, tobacco, and wine were increased. 
Import duties brought in a revenue of 1,350,000 florins in 1913 out 
of a total taxation of 3,471,000. The Netherlands Government con- 
tributed a subvention of 809,000 florins. 

There have been since 1895 no export duties in Dutch Guiana. 

(2) TARIFF OP CURASAO. 

Free trade is traditional in Curasao. '^ Curasao and Eustatia," 
wrote Adam Smith,^^ "the two principal islands belonging to the 
Dutch, are free ports open to the ships of all nations, and this free- 
dom, in the midst of better colonies whose ports are open to those of 
one nation only, has been the great cause of the prosperity of these 
two barren islands." 

Much of this prosperity was originally due to the smuggling traffic 
with the mainland;^^ and it is said that many of the Venezuelan 
merchants who visit the free port of Willemstad, which has an excel- 
lent harbor and is the only city on the islands, do so for the purpose of 
smuggling goods through the South American customhouses, where 
high tariffs are the rule." The tariff in effect in the islands is purely 
fiscal. Between 1871 and 1908 it underwent little change, the normal 
rate on imports being 3 per cent. By an ordinance of the governor 
dated July 16, 1908, certain increases were introduced. The rates 
in the different islands vary in minor respects, but those which prevail 
in the island of Curasao are typical. 

The free list includes whatever is necessary for the agricultural, 
commercial, or industrial development of the islands, i. e.^ live trees, 
fertilizers^ tools, plants, machinery, straw for hat manufacture, and 
pit coal. It also includes certain foods for the natives, such as fresh 
fish and fresh fruit. The 3 per cent rate applies to unenumerated 
articles, a 10 per cent rate to articles clearly of luxury such as auto- 
mobiles and organs^ and specific rates to a considerable number of 
foodstuffs and beverages, while fireworks pay duty at the rate of 20 
per cent. Articles imported for reexportation pay no duty. 

The ad valorem rates are in effect specific duties, since the valua- 
tions of commodities imported are listed here, as in the Dutch East 
Indies, by decree of the governor. 

Export duties, which are levied on all mineral ores and manures, but 
on no other products of the islands, were fixed by the ordinance of 
September 7, 1908, as follows: 

75 Wealth of Nations, Book IV, Cli. VIII, pt. 2. 

76Cleland, H. F.: Curacao, A Losing Colonial Venture, in American Geographical Society Bulletin, 
March, 1909, p. 134. 
" Morris, H. C: History of Colonization, p. 350. 

1285766°— 22 31 



476 coLoisriAL takiff policies. 

Per cent. 
Metal ores 4 

Mineral and natm-al manm-es: 

From the island of Aruba 3 

From the island of Little Gura(;'ao 10 

Salt from the island of St. Martins 10 

It is evident that any attempt to adjust the tariff so as greatly to 
favor the products of the home country would be neither profitable 
nor practicable. But the negative provision that the tariff shall not 
be framed in any way injurious to the trade of Holland or her other 
colonies applies here as it does in Surinam, 

The colony of Curasao imported in 1918 goods valued at 7,308,000 
florins and exported in the same year 2,686,000 florins worth. The 
total revenue derived from imports, exports, and excise duties and 
certain other taxes was estimated for the year 1914 at 711,234 florins, 
while the total expenditure v^as estimated at 1,045,774 florins. The 
difference was to be supplied by the mother country. In the 1920 
budget the corresponding revenues and expenditures w^ere estimated 
at 1,067,674 florins and 1,647,427 florins, respectively. 



78 



Bibliography. 

[See also the general works listed on p. 835 and the texts of treaties listed on p. 834.] 

Ahhott, Vvilbui' Cortez. The Expansion of Eui'ope. New York, 1918. 
Anton, Giinther Kurt. Neuere Agrarpolitik der Holiaender auf Java. Leipzig, 
• 1899. 
Australia, Parliamentary Papers. 1914-1915. Report on the jNetherlands East Indies 

by the Hon. Miles Staniiorth C. Smith. Victoria, 1915, 
Barker, J. Ellis. The Rise and Decline of the Netherlands. London, 1906. 
Belgium. Recueil des Rapports des Secretaires de Legation. Rapport sur la situation 

economique des Pays-Bas en 1887. 
Berg, N. P. van den. The Financial and Economical Condition of Netherlands 

India since 1870. 3d ed. The Hague, 1895. 
Berg, N. P. van den. Munt- Crediet- en Bankwezen Handel en Scheepvaart in 

Nederlandsch-Indie. The Hague, 1907. 
Blink, Dro Hendrik. Nederlandsch Oost- en West-Indie. 2 vols. Leiden, 1907, 
Bockelmann, Albrecht von. Wirtschaftsgeographie von Niederlandisch Ost-Indien. 

Berlin, 1904. 
Boulger, D. C. The Life of Sir Thomas Stamford Raffles. London, 1899. 
Boys, H. S. Some Notes on Java and its Administration. Pioneer Press. Allahabad, 

^ 1892. 
Brakel, D. Het Administratief, het Geldelijk, et het Materieel Beheer en Neder- 
landsch-Indie. 3 vols. Batavia, 1912. 
BrowTi, J. Macmillan. The Butch East. London, 1914. 
Cabaton, A. Java, Sumatra, and the Other Islands of the Dutch East Indies. London, 

1911. 
CI eland, Herman F. Curasao, A Losin2: Colonial Yentm-e. American Geographical 

Society Bulletin, March, 1909. 
Col<|uhoun, Archibald R. The Mastery of the Pacific. New York, 1902. 
Day, Clive. The Dutch Colonial Fiscal System. Essays on Colonial Finance. 

American Economic Association, New York, 1900. 
Day, Clive. The Policy and Administration of the Dutch in Java. New York, 1904. 
Duggan, Stephen Pierce. How Colonies are Governed; Dutch Possessions in tlie 

Orient Seized and Administered for Trade. Gun ton's Magazine, May, 1904. 
Dutch East Indian Archipelago. Fortnightly Commercial Review, Java, 1918. 
Dutch East Indies. Encyclopaedisch Bureau. Mededeelingen van het Bureau 

voor de Bestuurszaken der Buitenbezittingen. Batavia, 1915. 
Dutch East Indies, Division of Industry and Commerce of the Department of Agri- 

cultme, Industry, and Commerce. Some Facts and Figures about the Dutch 

East Indies. Buitenzorg (Java), 1917. 

78 Statesman's Year-Book, 1914 and 192'!. 



THE netherla:n'ds. 477 

Export. Berlin, 1910. 

France. Annales du C'ommerce Extcrieur. Indes-Orientales Neerlandaises- Lf^gia- 

lation Commerciale. Paris, 1878, 1887. 
Freeman, L. R. The Dutch in Malaysia. Contemporary Review, April, 1914. 
Fiorance, J. Esdaiie. Dutch Guiana from a Mining Standpoint. Engineering Maga- 
zine, June, 1900. 
Garvin, J. D. The House on Piles: A History and a Warning. Fortnightly Review, 

January, 1907. 
Gonnaud, Pierre. La Colonisation Hollandaise a Java; ses Antecedents, ses Carac- 

teres Distinctifs. Paris, 1905. 
Haarlem Colonial Museum. Bulletins, 1892-1908. 
Heinsius, J. H. A. M. van BosveM. Tarief van Rechten op den Invoer deventer 

1914. Wet van 15 Aug. 1862, Staatsblad 170, bijwerkt tot 1 Dec. 1913. 
Heringa, Dr. A. Free Trade and Protectionism in Holland. London, 1914. 
Hesselink, Gerritt. Die Kolonialpolitik der Niederliinder in Ostindien und deren 

Finanzielie Ergebnisse. Berlin, 1903. 
Indische Mercuiu\ Amsterdam, 1910-1917. 
Ireland, Alleyne. Tropical Colonization. New York, 1899. 
Ireland, Alleyne. The Far Eastern Tropics. New York, 1905. 
Javashe Courant. Ofhcieei Nieuwsblaad^ Batavia, 1910-1915. 
Keller, Alber!: G. Colonization. New York, 1902. 
Kol, Henri LI. van. Nederlandsch-Indie in de Staaten-Generaal van 1897 tot 1909. 

Koloniaie Politiek in Nederland. Bata^da, 1911. 
Leclercq, Jules. Le Pouvoir Effectif dans le Gouvernement Colonial. Bulletin 'de la 

Societe Beige d 'Etudes Coloniales, February, 1914, 
Leroy-Beaulieu, Paul, De la Colonisation chez les Peuples Modernes. 2 \'ols., 

5th ed. Paris, 1902. 
L'Institut Colonial International. Les Lois Organiques des Colonies. Brussels, 

1906. 
MacGregor, John. Commercial Tariffs and Regulations. 

Mayer, A. Holland als Kolonialmacht. Deutsche Rundschau. Berlin, 1906. 
Money, .James W. B. Java; or How to Manage a Colony. London, 1861, 
Morris, H. C. History of Colonization. New York, 1900. 
Morrison, J. D. The Land of the Dutch, Blacks. Travel, April, 1912. 
Netherlands East Indies, Yearbook (English edition), Batavia, 1916, 1920. 
Netherlands Customs Tariff up to September 1, 1916. The Hague, 1918. 
Netherlands-East-Indian-San Francisco-Committee. Pamphlets. The Hague, 1914. 
Netherlands-East-Indies. Ministry of Finance. Statistiek van den In- Lit- en 

Doorvoer (up to Jan. 1, 1917). 
Netherlands-East-Indies. Ministry of Finance. Maandstatistiek van den In- en 

Uitvoer en van het Entrepotverkeer (after Jan. 1, 1917). 
Netherlands, Centraal Bureau voor de Statistiek. Jaarcijfers voor het Koninkrijk der 

Nederlanden (Kolonien), 
Raffles, Thomas Stamford. Llistory of Java. 

Ravestyn, W. van, Jr. Niederiander Kolonialpolitik. Die Neue Zeit, 1907, 
Recueil International de Legislation Goloniale, October, 1911. 
Reinsch, Paul S. Colonial Administration. New York, 1905. 
Root, J. W. Colonial Tariffs. Liverpool, 1906. 

Scheltema, J. F. The Writing on the Wall. Westminster Review, April, 1910. 
Scidmore, Aliza Ruhamah. Java, The Garden of the East. New York, 1897. 
Smith, Adam. Wealth of Nations. 

Snow, Alpheus H. The Administi-ation of Dependencies. New York, 1902. 
Staatsblad van Nederlandsch Indie. (Batavia.) 
Staatsblad van het Koninkrijk der Nederlanden. 
The Americas. January, 1919. Curagao, "The Hongkong of the Caribbean." New 

.York. 
United States Bureau of Insular Affairs. Certain Economic Questions on the Eng- 
lish and Dutch Colonies in the Orient, by Jeremiah W. Jenks. Washington, 

1902. 
United States Department of Commerce and Labor, Bureau of Manufactures. Tariff 

^ Series No. 20, Export Tariffs of Foreign Countries. Washington, 1909. 
United States Treasury Department, Bureau of Statistics. Colonial Administration. 

Washington, 1900. 
Waerden, J. van det, America's Interest in the Netherlands East Indies. The 

Americas, January, 1919. 
Walcott, Arthur S. Java and Her Neighbours, New York, 1914. 
Zimmermann, Alfred. Die Kolonialpolitik der Niederiander. Berlin, 1903, 



Chapter IX. 

COLONIAL TARIFF POLICY OF PORTUGAL. 



CONTENTS. 



I. Introduction: Page, 

The Portuguese Colonial Empire 478 

Present extent. 479 

Area and population — 

Table 1.— Portugal and Portu- 
guese territories 480 

Situation and commercial impor- 
tance 480 

Table 2.— Trade of the Portu- 
guese colonies 483 

II. Government of the colonies and making 

of tariffs. 483 

III. ^olonial tariS policy and system: 
iiarlv Portuguese colonial commercial 

policy 485 

Present colonial tariff policy 486 

Treaty limitations — 

General treaties 486 

Bilateral commercial treaties 486 

Special treaty provisions for colonies . 487 

Diversity of tariff arrangements 489 

Preferential treatment in Portugal of 
imports from Portuguese colonies — 

History 489 

Present provisions 490 

Special provisions for Madeira 

and the Azores 492 

Treatment of imports into the colonies . . 493 

General legislation 494 

Treatment of alcoholic beverages- 
Wine: Rates and preferences 495 

Distilled liquors: Rates and 

preferences 497 

Summary 498 

IV. Tariff's of colonies individually: 
Province of Angola- 
Location and divisions 498 

(c) Free trade zone 499 

Table 3.— Export duties of the 

Portuguese Congo district 499 

(6) District of Ambriz 500 

Tariffs before 1892 500 

Tariff of 1892 501 

(e) District of Loanda, Benguela, and 

Mossamedes 502 

Tariffs before 1892 502 

Tariff of 1892 503 

Summary: Tariff of the three 

divisions of Angola 506 

Province of Mozambique: Portuguese 
East Africa — 



IV. Tariffs of colonies individually— Con. Page. 
Province of Mozambique: Portuguese 
East Africa— Continued. 
Location and divisions 507 

(a) Mozambique (except territory 

under chartered companies)— 

Tariff of 1877 508 

Tariff of 1892 509 

Tariff chanses, 1S92-191G 510 

Tariff of 1916— 

Import duties 511 

Export duties 513 

Table 4.— Export duties 

of Mozambique 514 

Prohibitions on importation. 514 
Further dift'erential charges- 

(a) Tonnage dues 515 

(6) Commercial and in- 
dustrial contribu- 
tions south of the 
River Sabi 515 

(c) Industrial tax In 

Mozambique, Que- 
iimane, and Tete . . 515 

(d) Fishing tax in Lou- 

renQo Marques 515 

(f ) Municipal taxes 515 

(b) District of Manica and Sofala 

(Mozambique Company) 516 

(c) Nyassa Company's territories 517 

Summary: Tariffs of the three divi- 
sions of the Province of Mozam- 
bique 517 

Rates of duty 518 

Differentials 518 

Table 5.— Specimen rates 
of Portuguese colonial 

tariffs 519 

The Cape Verde Islands- 
Tariff 520 

Sao Thom6 and Princip6 — 

Tariff 521 

Municipal taxes 523 

Portuguese Guinea 523 

Tariff 524 

Minor colonies in Asia and the Pacific: 

Portuguese India. Timor, Macao 524 

(a) Portuguese India — 

Tariff.... 525 

(6) Timor- 
Tariff 526 

(c) Macao — 

Tariff 527 

Bibliography 527 



I. Introduction. 



THE PORTUGUESE COLONIAL EMPIRE. 



The Portuguese were the original colonizers among modern nations. 
The brilliant explorations carried on under the direction of Prmee 
Henry the Navigator (1394-1460) resulted in the colonization of 
Madeira and the Azores and the establishment of various settlements 

478 



POETUGAL. 479 

along the coast of Africa as v^ell as the discoveiy of the Cape Verde 
Islands, In the reign of Kmg Emanuel I, who assumed the title of 
''Lord of the Conquest, Navigation, and Commerce of India, Ethiopia, 
Arabia, and Persia," Bartholomew Diaz rounded the Cape of Good 
Hope; Vasco da Gama pressed on to India; Portuguese settlements 
were established on both the west and the east coasts of Africa; 
Cabral readied the coast of South America; the Cortereals visited 
Greenland; and the Pope gave Portugal a title to all lands discovered 
from Cape Bojador '^ad Indos." 

The record of Portuguese discover}^, initial overseas trading, and 
fii'st steps in the founding of a colonial emphe is one of the most 
brilliant chapters in modern history. Albuquerque was not only a 
great military leader; he was an able administrator. In him was 
"found the climax of Portuguese power and glory in the East," 
but "already in his lifetime decline had set in, never to be seriously 
mterrupted,"^ By 1540 the Portuguese possessions extended along 
the coasts of East and West Africa, Malabar, Persia, Ce34on, the 
Malay Archipelago, Indo-Chiiia, even the coast of Chhia proper, and 
Brazil. The Portuguese settlements were established mainly for the 

gurpose of carrying on trade. The Portuguese did not, except in 
.razil, carry their dominion far into the interior. Navigation was 
their forte, and preponderance of sea pov/er was the basis of their 
title to empire. The principle was established and was for some time 
mamtained that no ship might sail in the Indian Ocean without 
permission from the King of Portugal. ^ There was nothing concili- 
atory either in their treatment of European rivals or of the natives 
with whom they traded and among whom they settled; and even 
among themselves their commercial policy was that of preferences 
and monopolies. When the Spaniards, the Dutch, the British, and 
the French became strong enough on the sea to contest their domin- 
ion, the Portuguese settlements fell away. 

Before the end of the sixteenth century the Portuguese were almost 
supplanted in the East, retauimg only a part of Timor, Macao on the 
China coast, and unimportant regions m India. The Napoleonic era 
broughtthemnothingbutlos2.es. It was durmg this period that the 
Portuguese court emigrated to Brazil, and for a period the relationship 
between the colony and the mother country was inverted, the latter 
becoming to all practical intents the dependency. ^ Brazil was made 
a ''realm," and when the court returned to Lisbon Dom Pedro 
remamed as "regent of the realm." The colonial bond was finally 
severed and Brazil became independent in 1825. 

By 1844, there remained to Portugal but three insignificant depend- 
encies in India. Only in Africa and in the Atlantic has she retained 
extensive territories, and recently the integrity of some even of these 
has been threatened. ^ 

Present Extent. 

At the present time the Portuguese Colonial Empire consists 
of eight colonies — five in or near Africa and the others m India, 
China, and the Malay Archipelago. Madeira and the Azores are 

1 Keller, A. G.: Colonization, 1908, p. 106. 

2 Seignobos, Charles: History of Mediaeval and Modern Civilization, p. 244, 
8 Keller, A. G.: Op. eit., p. 161. 

* See p. 484, footnote. 



480 



COLONI.-^ 



TARIFF POLICIES. 



treated ratlier as outlying parts of the Republic tlian as colonies, 
but as they have some special tariff provisions they may advisedly 
be discussed in connection with the colonies. In this study, however, 
ujLiless othenvise specified, the term '^Portugal" always includes 
Madeira and the Azores and the term ^'colonies" always excludes 
them. 

Table 1. — Area axd Populatiox. 

The areas and populations of Portugal and Portuguese territories 
ai'e shown in the following table: 

Portugal and Portuguese territories^ 



Portugal (1911). 

Azores 

Madeira 



Total Portugal 



Area. 



Sq. miles. 

34, 254 

922 

314 



Popula- 
tion. 



5,546,000 
243,000 
170,000 



35,490 I 5,959,000 



Anirola. I 4S4, 800 

295,000 



Mozambique 

Sao Thome and Principe 
(1914) „ 

Portuguese Guinea 

Cape Verde Islands (1912) . . . 

Total African colonies. . 



360 

13,940 

1,480 



795, 580 



4, 119, 000 
3,120,000 

59, 090 
289,000 
150,000 



7, 737, 000 



Portuguese India: 

Goa(1910) 

Damao, Diu (1910) 

Timor (1915) 

Macao (1910) 

Total Asiatic colonies 

Total colonies 



-^-- i ^zt- 



Sq. miles. 

1,469 

169 

7,330 

4 



516,000 
33,000 

378,000 
75,000 



8,972 I 1,001,009 



804,552 , 8,735,000. 



1 Based on the Statesman's Year-Book 1920, pp. 1167, 1174, except for the area of Mozambique, for 
vrhich. a Manual of Portuguese East Africa issued in 1920 by the Naval Intelligence Division of the 
British Admiralty has been followed. The Statesman's Year-Book gives 426,712 square miles. 

2 The indigenous population of Angola is given in figures for 1914 as 2,124,000. The difference betvreen 
this figure and that wliich appears in the table is a difference in .the estimates. 

Situation and Commepxial Importance. 

Portugal's colonies have a total area of over 800,000 square miles, 
with a population of 8,735,000, They are thus in area more than 22 
times as extensive as the m.other country and their population is 
nearly 60 per cent greater. 

The African colonies, totaling 795,600 square miles, include Angola 
(Portuguese West Africa), Mozam^bique (Portuguese East Africa), 
and Portuguese Guinea, on the mainland; and the Cape Verde Islands 
and Sao Thome and Principe off the west coast. 

Angola, the largest of these colonies, has an area greater than the 
combined areas of_Germany, France, Holland, Belgium, Denmark, 
and Switzerland, it lies on the west coast of Africa, south ^ of the 
Belgian Congo and north of (form.er) German Southwest Africa, and 
is entirely within the tropical zone. It has a coast line of 1,000 miles. 
In an area of 484,000 square miles it has a population of perhaps 
4,000,000, of whom about 4,000 ^ are whites. The chief products 
are coffee, rubber, wax, sugar, vegetable oils, coconuts, ivory, oxen, 
and fish. The rubber supplies are now becommg exhausted. Cot- 
ton growing, formerly remunerative, has been neglected but is now 
increasing. Tobacco is grown and manufactured for local consump- 
tion. Petroleum and asphalt are worked to some extent. There 



5 Except a small detached area. 

6 New International Encyclopedia, 1917. 



PORTUGAL. 481 

are large deposits of malachite, copper, iron, petroleum, and salt, 
and gold has been found in some quantities. The chief exports are 
coffee and rubber, with considerable quantities of dried fish. The 
chief imports are textiles. The trade is largely with Portugal, and 
most of the carrying between the colony and Europe is in the hands 
of the Portuguese National Navigation Co. 

Mozambique, v/ith an area of 295,000 square miles, is less extensive 
than Angola, but has nevertheless an area somewhat greater than 
that of the State of Texas. It lies on the east coast, on both sides 
of the Zambesi River, wi& a coast line of 1,430 miles opposite to 
and paralleling the island of Madagascar. North of it lies (former) 
German East Africa, and to the v/est and south are British territories. 
Almost all of Mozambique is within the tropical zone, but the 
southern end extends nearly to the twenty-seventh parallel of south 
latitude. The population is about 3,100,000, of whom perhaps 
10,500 are whites. The chief products are sugar, coconuts, beeswax, 
and minerals. There are extensive coal deposits in the Tete region 
and important gold-bearing reefs have been found in the Upper 
Zambesi. The development of a considerable portion of the eco- 
nomic resources is in the hands of two companies, which possess 
royal charters and which are operating chiefly with British and 
French capital. In this colony Portuguese coinage is little used; 
in some parts the currency chiefly used is the British India rupee; 
in others, English gold and silver coins. The chief exports are 
sugar, rubber, various ores, wax, and ivory. The chief imports are 
cereals, foodstuffs, cement, cotton goods, alcoholic liquors, and ani- 
mals. The total trade in 1918 was more than 58,800,000 escudos,^ 
of which 18,700,000 were imports, 4,400,000 exports, 9,400,000 re- 
exports, and 25,300,000 transit trade. 

The Cape Verde Islands, a group of 14 islands and islets, lie in the 
Atlantic, about 400 miles off the coast of French West Africa, between 
the twelfth and fifteenth degrees of north latitude. With an area of 
1,480 square miles, they have a population approximating 150,000, of 
whom some 4,800 are whites. The islands produce coffee, physic- 
nut, hides, millet, sugar cane, and salt. The chief exports are 
medicinal products and millet. The imports greatly exceed the 
exports; and the islands are commercially important for their 
'invisible exports," that is, supplies for passing vessels and the 
tourist trade. Besides the coasting trade, they were visited in 1916 
by no less than 7,407 merchant vessels, totaling 5,017,671 tons. 
The port of Mindello has an excellent harbor and is a very important 
coaling station. 

The islands of Sao Thome and Principe ^ lie about 125 miles off 
the west coast of Africa in the Gulf of Guinea, southwest of Kamerun, 

' Currency.— The older units of Portuguese currency are the real (plural reisl and the miJreis, written 
thus: S030 indicates "30reis"; 3S1 50 indicates "3 milreis ISOreis." The present monetary units are the 
escudo and centavo. In Portugalfrom July 1, 1913, andin the colonies (except those of the Orient) from 
January 1 , 1914, official accounts have been kepti n escudos, v/hich are the same as the older milreis, but 
dividedinto 100 centavosinstead ofl,CGOreis. (Cclec?ao dosdecretcs, decree cf Dec. 18, 1913, p. 121. The 
new currency had been decreed May 22, 1911, but some changes were made by the law of June 21, 1913.) 
The above sums are now written 3$15 (3 escudos 15 centavos or 3 milreis ISO reis) and $03 (3 centavosor 
30 reis). We find also $37(5), or 37| centavos, equal to 375 reis. Normally the value of the escudo, in 
terms of United States dollars, is ISCO (1 escudo) equals $1.08. The centavo therefore equals $0.0108 and 
the real equals $0.00108. Brazi Istillretains the milreis and reis. In terms of wounds sterling, ISOOequals 
4s. 4id. In December, 1916, the exchange was 7h escudos to the pound sterling. (The Statesman's Year- 
Book, 1918. Bulletin International des Douanes, 49th Supp. to No. 9.) In 1918 the escudo was worth 
from $0.57 to $0.60. Supl. to Commerce Reports No. 75a, June 22, 1920. 

8 The Province of Sao Thome and Princip6 includes the fortress of Ajuda, on the mainland; but Ajuda 
does not appear in the tariff decrees. 



482 COLOXIAL TAETFF POLICIES. 

and just north of the equator. They are small m area, having 
together only 360 square miles. The population is ahout 60,000, 
of whom 1,570 are whites: but, with less than one-thousandth the 
area of either, their trade is almost as large as is that of either Angola 
or Mozambique. Then soil, of volcanic origin, is very fertile. The 
products, which make them one of the best among West African 
colonies, are cocoa, coffee, rubber, cinchona, vanSla beans, and 
balsam. Until recently the plantations of Sao Thome led the 
world in the production of cocoa. The comimerce of the islands is 
almost entirely with the m.other country and carried in Portuguese 
ships. The ports were visited m 1914 by 133 merchant vessels. 

Portuguese Guinea is a triangular territory on the west coast of 
Africa a little south of Cape Verde. To the north, east, and south 
it is bounded by French territory (Senegal), A little greater in 
area than Holland and a little smaller than Switzerland, it has a 
population of only 289,000. The most important products are 
groundnuts, rubber, wax, tobacco, indigo, and cotton. Cattle, sheep, 
goats, and pigs are raised. Among the exports appear rubber, 
wax, oil seeds, ivory, and hides; imports consist of blue and white 
calico, white sheeting, second-hand clothing, preserved provisions, 
hardware, tobacco, and the usual wide range of miscellaneous articles 
of daily use.^ 

Portugal has three Asiatic colonies, one on the coast of India, one 
on the coast of China, and one in the ir'acific Ocean. 

Portuguese India mcludes the territories known as Goa, Damao. and 
Diu; these have a combined area of 1,638 square miles and a popula- 
tion of 550,000. Goa, with an area of 1,400 square miles, lies on the 
Malabar coast at latitude 15° north; Damao, also on the west coast, 
is 100 miles north of Bombay; and Diu is merely a fortress, on an 
island 140 miles farther up the coast. The principal product of aU 
three is salt. JJam^ao produces some manganese. The trade is largely 
transit trade. Among the exports appear salt, coconuts, fish, 
spices, caju nuts, copra, and manganese; the principal imports are 
•di'ugs and medicines, liquors, oils, paper, provisions, parts of ships, 
and cotton manufactures. 

Macao, on the Chma coast, consists of a city and port, with an 
area of 4 square miles, on islands at the m^outh of the Canton River 
near Hongkong. Its population numbers about 75,000, of whom 
about 4,000 are whites and the remamder Chinese. Its trade, 
mostly transit, is largely in the hands of Chinese merchants. Macao 
is a free port, and it was visited m 1915 bv 13,457 merchant vessels, 
totalmg 2,408,000 tons. 

Portuguese Timor includes the northeastern, the larger and better 
part of the island of Timor, 10° south of the equator in the Malay 
Archipelago, together with Ambeno and Pulo Cambing. South- 
western Timor belongs to the Netherlands. With an area of 7,330 
square miles, Portuguese Timor has a population of 378,000. The 
prmcipal products are coffee of superior quality, cacao, spices, and 
sandalwood. There is some petroleum. The chief exports are 
coffee, sandalwood and sandal root, copra, and wax. 

f Board of Trade Journal, Aug. 12, 1920. Hides are now scarcely quoted because of cattle disease. 



PORTUGAJL. 



483 



TRADE. 

The table which follows gives some indication of the relative com- 
mercial importance of the Portuguese colonies. It is practically im- 
possible to make a satisfactory exhibit for the reason that the sta- 
tistics available vary as to the units of value and the classification. 
With the fluctuations in exchange during the past four years, the 
figures obtained by conversion can not be assumed to represent ac- 
curately the ratios between the trade of 1913 and that of 1917. The 
figures for 1913, however, lirake possible fairly accurate comparison 
of the volume of the trade of these colonies and give an idea of the 
proportion of the total which was carried on between the colonies 
and the mother country. 

Table 2. — Trade of the Fortuguese colonies. 
[In thousands of espudos.] i 



Colony. 



Year. 



Imports. 



Exports. 



Total 
trade. 



Trade 

with 

Portugal. 



Cape Verde Islands 

Do 

Portuguese Guinea 

Do 

Sao Thome and Principe 

Do 

Angola 

Do 

Mozambique (6 ports) . . . 
Mozambique (7 ports) . . . 
Portuguese India 

Do 

Macao , 

Timor.... 

Do.... 



1913 
1916 
1913 
1917 
1913 
1916 
1913 
1916 
1913 
1915 
1913 
1916 
1913 
1913 
1916 



1,860 
4,917 
1,702 
2,058 
4,108 
6.119 
5,151 
8,800 

12, 678 
9,251 
2,985 
3,551 

16,498 
656 
425 



307 

332 

1,628 

2,881 

8,102 

7,520 

5,036 

6,713 

5, 346 

4,796 

1,020 

1,209 

10,862 

474 

485 



2,167 
5,249 
3,330 
4,939 
]2,210 
13, 639 
10,186 
15,513 
(}) 

4,004 

4,760 

27,360 

1,330 

910 



491 


11,089 


6,748 


3,614 


32 


} 


82 



' 1 escudo=.?1.0S at normal exchange. See footnote on p. 281. 
2 For Mozambique in 1913 and 1915 the figures are (in escudos): 


Year. 


Import. 


Export. 


Reexport. 


Transit. 


Total. 


1913 (for 6 ports) 


12,678 
9,251 


5,346 
4,796 


8,935 
10,635 


34,044 
15, 572 


61 004 


1915 (for 7 ports) 


40, 254 







II. Government of the Colonies x\nd Making of Tariffs. 

In the early nineteenth century the administration of the Portu- 
guese colonies, which, since 1642, had been nominally under the 
control of the conselho ultramarino, was lodged in the ministry of 
marine. In the colonies, until 1811, the power of Portugal was rep- 
resented by governors and captains general. Measures which were 
undertaken in the following decades looking to the separation of the 
civil from the military authority in the colonies did not result in the 
expected reforms, and after 1835 hopes for improvement were placed 
in the selection of strong men as governors. 

Under the Portuguese Constitution of 1838 and the additional act 
of 1852 legislative authority over the colonies was reserved to the 
Cortes, but when that body was not in session the executive might 
issue any decrees deemed urgent. This power was freely exercised.^® 



10 Marnoco e Souza, Jos6 Ferreira: Direito Publico, Poderes do Estado, pp. 660, 664. 



484 COLOXIAL TARIFF POLICIES, 

In 1851 tile consellio ultramarino was revived in the home govern- 
ment and was constituted the highest advisory body for colonial 
affau^. The earnest efforts of this body to reform the colonial ad- 
ministration were impeded by the difficulties attendant upon the 
putting down of the slave trade and by the unsatisfactory colonial 
budgets. It was not found possible to pay the colonial officials 
adequate salaries, and these officials were permitted to engage in 
trade, often with unhappy consequences from the standpoint of the 
public interest. The conseUio ultramarino was abolished in 1868. 
Since 1859 the colonies have been represented in the Cortes by 
representatives chosen by taxpa^yers who pay direct taxes of at 
least 1 milreis (SI. 08) each. 

Since 1869 the plan of orga^nization of the Portuguese colonies has 
been in general as follows: There are eight provinces, each of which is 
divided into districts, while the districts are in turn di-vided into 
conselhos. The provinces are under the rule of governors, and the 
districts are ruled by governadors subait/ernos. The governors of 
Cape Verde^ Angola, Mozambique, and India are denominated 
governors general. There are local advisory bodies in the provinces 
to assist the governors. Originally the financial administration of 
the colonies was controlled by a junta do fa^enda, but in 1888 the 
junta was replaced hj inspectoi's, who were subordinate to the govern- 
ors. The governors have general control over civil and mihtary 
mattei^, but are not permitted to interfere in judicial affahs.^- 

In recent decades the financial condition of the colonies, a serious 
burden on the treasury of the mother country, has occasioned not a 
little concern, it is estimated that between 1870 and 1912 the 
colonies cost Portugal approximately 875,000,000, and this expendi- 
ture was for the mxost part unproductive. ^^ ^o strengthen their hold 
on the colonies and to improve the financial situation, the Govern- 
ment strove to effect an increasing centralization of adminis- 
tration, but in the working out of an independent budgetary system 
for the colonies there was a great deal of confusion and want of suc- 
cess. As a consequence certain Portuguese statesmen proposed 
getting rid of the vvhole problem by no less drastic a measure than the 
sale of the colonies. ^^ 

With the revolution of 1910, it was suggested that colonial seK- 
govemment might be the remedy for the evils of centralization, and 
certain modest steps were taken in that direction. Under the new 
constitution the Congress was to contiaue to legislate for the colonies, 
with the provision that the executive might act in legislative capacity 
when the Congress is not in session; but it was specifically provided 
that the principle of decentralization was to be applied in the colonies 
and that special laws were to be passed suited to the development of 
each. In the consequent legislation the position of the governors was 
more clearly defined than had been the case hitherto, and a sharper 

11 Zimmermaim, A.: Die Europaischen Kolonien, Vol. I, pp. 217 et seq. 

12 Young, Geor.2;e: Portugal, an Historical Study, p. 317. 

13 With or Tvitiiout the expectation that this proposal v^onld some day be adopted, Count Hatzfeld for 
Germany and Mr. Balfour for Great Britain signed a secret agreement in 1898 dividing the Portuguese 
colonies 'into "economJc spheres of influence bet'^een'-' Germany and Great Britain. In 1913 Prince 
LichnoTvsky and Sir Edward Grey came near to the conclusion of a further agreement amending that of 
1898; this Sir ±.dvrard was vriiling to sign only on condition that it be published, together vrith the 1S9S 
agreement and a British-Portuguese treaty concluded in 1SQ9 (a renewal of the treaty concluded in the 
reign of Charles II); but the German Government took the position that this was not expedient, and the 
agreement was not signed. (See Lichnowslcv, Karl Max Piirst von: Mv Mission in London, 1912-1914, 
London, 1918, pp. 1-4-19.) 



PORTUGAL. 485 

line was drawn between the financial responsibilities of the colonies 
and those of the mother country. 

The law for the financial administration of the colonies (strictly 
speaking, the ''bases" that accompany the law) provided for the 
initiative of the colonial authorities in the establishing and altering of 
taxes, subject, however, to the provision that these must be in con- 
formity with international obligations and must have the approval 
of the home colonial council. This council consists of four officials 
of the colonial ministry, designated ex officio, and of seven others 
appointed according to theiT competency— two lawyers, an engineer, 
a physician, and officials from the army, the navy, and the consular 
service. Further, there are associated with the council eight elected 
representatives from, any colony whose affairs are under consider- 
ation. These representatives are elected indirectly and by taxpayers 
only. When the council considers tariffs there are added to it three 
officials, one each from the colonial ministry, the customs service, and 
the consular branch of the foreign office, and three representatives of 
the industrial and commercial associations of Lisbon and Oporto. 
''Subject to certain considerable restrictions, the colonies will now 
have control of their customs duties, and they can reduce the disad- 
vantages of the restrictions by lowering duties if their budgets 
allow." '' 

III. Colonial Tariff Policy and System. 

EARLY PORTUGUESE COLONIAL COMMERCIAL POLICY. 

Of the early colonial policies none was more closely monopolistic 
than the Portuguese. Colonial trade was a State monopoly; for- 
eigners were excluded from the colonies on pam of death, and un- 
licensed Portuguese were not made much more v/elcome. Certain 
exceptions were introduced by treaties about the middle of the seven- 
teenth century, but it was only after 1755 that the system was slowly 
modified. Severe restrictions on navigation and manj" prohibitions 
on trade continued, and differential duties appeared where foreign 
trade was allowed. In 1809 there was granted free entry of colonial 
raw materials into Portugal; also free exportation of Portuguese 
manufactures and free entry for these into the colonies. Not until 
1837 was the principle accepted that European manufactures of 
products or types of products which did not compete with Portuguese 
industries should be allowed entry to the African colonies in Portu- 
guese ships.^^ In the following year the Portuguese tariff was ex- 
tended to the colonies, but with the provision that the governors 
might make modifications. A decree of 1844 specified as open to 

1* Young, George: Ibid., p. 325. 
• 15 According to an Angio-Portuguese treaty of February 19, ISIO (art. 15), "all goods [of British origin] 
* * •'■ shall be admitted into al I and singular the ports and dorainions of His Royai Highness the Prince 
Regent of Portugal, as well in Europe as in America, Africa, and Asia, whether consigned to British or 
Portuguese subjects, on paymg generally and solely, duties to the amount of 15 per cent according to the 
value which shall be set upon them by a tariff or table of valuations, called in the Portuguese language 
pauta, the principal basis of vvhich shall be the sworn invoice cost of the aforesaid goods, merchandises, and 
articles, takiag alsointo consideration (as far as may be just or practicable) the cm-rent prices thereof in the 
country into v/hich they are imported." But by article 21 Portugal reserved the right of imposing '-heavy, 
and even prohibitory, duties on all articles knovrn by the name of British East Indian goods and West 
Indian produce, such as sugar and coiiee, which can not be admitted for consumption in the Portuguese 
dominions, by reason of the same principle of colonial policy v/hich prevents the free admission into the 
British dominions of corresr)onding articles of Brazilian produce." This treaty was suspended bv notifica- 
tion of July 22, 1835, from and after .lanuarv 1, 1836. (Brit, and For. State Papers, vol. 1, pp. 513-545. 
Eertslet's Commercial Treaties, vol. 4, p. 362, vol. 5, p. 413.) 



486 COLONIAL TARIFF POLICIES. 

foreign vessels 16 colonial ports, and in 1853 a dozen others were 
added. The tariff of December 31, 1852, admitted colonial products 
to Portugal on payment of one-fifth of the rates applicahle to foreign 
products, but for 10 years colonial sugar vras to pay only 1 real 
a pound. (See note on currency, p, 481.) About the same time 
tarifts were proclaimed for Cape Yerde, Mozambique, Sao Thome 
and Principe, Guinea, and Ambriz. All these tariffs contained dif- 
ferential rates and Mozambique had intermediate rates levied on 
imports of foreign goods or exports to foreign ports, but m Portu- 
guese vessels. ^° 

This briefly summarizes the tariff pohcy to the point at which it 
will be taken up more in detail in further sections, 

PSESEXT COLOXIAL TASIFF POLICY. 

In later legislation the principle of colonial preferences has been 
retained. The general legislation now provides that in all future 
tariffs the products of the mother country shall enjoy in the colonies 
a reduction of not less than one-haK of the lowest duties levied on 
similar foreign products^ in return for which the colonial products are to 
enjoy the like-favored treatment in the mother country and the other 
colonies. Foreign goods reexported from Portugal are to enjoy a 
reduction of 20 per cent from the duties otherwise leviable, though 
the West African colonies vrill restrict this favor to goods transported 
on national vessels. Likewise the principle of differential export 
duties must be preserved in the colonial tariffs; and until new trans- 
portation lines are established with new contracts, the present pro- 
tection to national Imes shall continue, though conditions may be 
annexed requiring that the rates of these lines shall not exceed those 
of foreign lines. ^^ 

TREATY LIMITATIONS. 

General Treaties. 

Portugal is a party to two of tlie general European treaties which 
deal with colonial tariffs^ the treat}" of Berlin of 1885 and the 
treaty of Brussels of 1890, amended in 1899 and in 1906. These 
treaties are discussed on pages 85 and 89. 

Bilateral Commercial Treaties. 

A majority of Portugal's commercial treaties provide that products 
of the Portuguese colonies reexported from the mother country shall 
pay no higher duty in the other country than are paid there on the 
products of Portugal: i. e., that there shall be no surtax for indirect 
importation via Portugal. This provision is found by itself in the 
treaties with Denmark, l^orway, and Sweden, ^^ and in combination 
with others in the treaties with Great Britain ^^ and Germany. ^^ 

15 Tito de Car\-alho: Les Colonies Portugaises au i^oint de vue Cominercial, pp. 9. 14, ?,o— Jl. Petailsof 
the tariffs in force just before 1870 may be foiind in A. P. de Carvalho's As Pautas das Alfandegas das Pro- 
vincias Ultramarinas, 1870. 

1' Diario do Governo, Aug. 15, 1914, pp. 666-680. More specific provisions in regard to duties on colonial 
suear entering Portugal and on cottons in A ngola are given belov:. The charter for Angola v.-as not decreed 
until 1917. U hether others have been decreed the material at hand does n ct disclose. 

13 Denmark, Dec. 14, 1896-Dec. 4, 1897; Norwav, Dec. 31. 1895-Sept. 3, 1896; Sweden, Apr. 16, 1904-jan. 
12, 1907. Brit, and For. State Par>ers, vol. 88, p. 444; vol. '87, p. 534: vol. 101, p. 552. 

IS Aug. 12, 1914. Hertslet. vol. 27, p. 1022. 

20 Nov. 30, 1908-iiay 21. 1910. Brit, and For. State Papers, vol. 101, p. 924. 



PORTUGAL. 487 

France, whose policy has been to impose surtaxes on indirect importa- 
tion, limits the concession to products of Sao Thome, Principe, and the 
Cape Verde Islands, imported through the port of Funchal, in Madeira.^* 
The protocol of the treaty with Germany limits it by the proviso that 
it will bind the German Government only while German commerce is 
not subjected in the Portuguese colonies to a regime less favorable 
than that of the most-favored nation. This imposes no obligation 
on the Portuguese to continue equal treatment in colonial tariffs, 
but makes discrimination against Germany unlikely. 

The provisions of the Portuguese treaty of 1914 with Great Britain 
go farther. Products of the colonies of each are to receive most- 
favored-nation treatment when imported into the other country as 
long as the colonies of the one accord to the goods of the other the 
most-favored-nation treatment. This again is no guarantee that 
the colonies will grant or receive most-favored-nation treatment, 
though on condition that they accede to the treaty within 12 months, 
they have the option of giving and receiving this guarantee. The 
provision for the adherence of colonies is for the benefit of the British 
colonies and Dominions. 

The agreement of May 9, 1911, between Portugal and Italy speci- 
fied that imports into either from the colonies of the other, whether 
imported directly or through the mother countries, should enjoy the 
same treatment as the products of the latter. But Portuguese goods 
imported into Italian colonies, and Italian goods imported into Por- 
tuguese colonies, and colonial products of either imported into the 

colonies of the other were explicitly excluded from the benefits of the 
convention. 22 

Portuguese commercial treaties which promise most-f avored-nation 
treatment reserve to Portugal the right to give special favors to Spain 
and to Brazil. A number of them also make exception as to the rights 
of navigation granted to the Transvaal and Orange Free State by 
treaties of 1875 and 1876.-^ The treaty of 1908 with Germany men- 
tions that the navigation between Portugal and the Portuguese 
colonies west of the Cape of Good Hope continues to be reserved for 
Portuguese vessels. In this as in other treaties the right is conceded 
to foreign vessels to land part of a cargo at one port and carry other 
parts to other ports in the same colony. 

Special Treaty Provisions for Colonies. 

Mozambique is the only colony whose tariff has been considerably 
influenced by treaties ad hoc. Treaties of 1875-1882 between Por- 
tugal and the Transvaal and of 1876-77 between Portugal and the 
Orange Free State provided that products of the soil and industry 
of the Transvaal and the Orange Free State should be entirely free 
of import and transit duties in Mozambique, and limited the duties 
to be charged at Lourenpo Marques on merchandise of foreign origin 
imported in transit to these two South African countries. The rate 
of this duty was set at 3 per cent, but might, under certain conditions, 
be made 6 per cent or 1| per cent. Even this small duty was not to 
apply to a list of 26 items, which included animals, cereals, coal, stone, 

^1 Agreement of Feb. 17, 1911. Brit, and For. State Papers, vol. 105, p. 614. All the Portuguese treaties 
include Madeira, Porto Santo, and the Azores as part of the mother country. 

22 Exchange of notes, Italy-Portugal, Brit, and For. State Papers, vol. 105, p. 675. 

23 See below. 



488 COLONI.VL TAEIFF POLICIES. 

tools, machinery, books, and musical instruments. The term of these 
treaties was 20Vears, and the one_with the Transvaal, at least, was 
still in force at the end of the Boer VVar and was continued by a modus 
Vivendi of December 18, 1901, made by the high com^missioner of 
South, x^frica and the governor general of Mozambique. The only 
modifications of importance were a provision that alcoholic liquors 
produced in Mozambique were to pay in the Transvaal the sptrne as 
those of Natal and the Cape, and those of the old Transvaal territory 
were to pay the same in Mozambique, and that goods in transit 
through. Lourenco Marques into the Transvaal should pay no higher 
duties in the latter than those charged on goods imported thi'ough 
the ports of Cape Colom^ and Natal.^- 

The special relations between Mozambique and the old Transvaal 
territory continue to the present time under the convention of April 
1, 1909.2^ Products of the soil and industry of each, if the chief 
component is of local production, are liable in the territory of the 
other to no import, transit, or export duty, except that distilled or 
fermented liquors are subject to the highest rates levied on products 
from overseas.-^ These products are liable only to the lowest local 
taxes, municipal or other, levied on any goods.-' Goods imported 
through Lourenco Marques = for the Transvaal are to pay no duties 
but only the port and warehousing dues and the tax known as ^'in- 
dustrial contribution." The Transvaal is to levy no higher duties 
on goods imported through Lourenco Marques than on those imported 
through Natal or the Cape.^ 

This treaty was to remain in force for 10 years and until de- 
nounced ^oth a year's notice. 

Special treaty provisions also regulate certain tariff relations of 
Mozambique with Rhodesia and Nvasaland (British Central Africa). 
The British-Portug_ues3 treaty of June 11- July 3, 1891,29 defined in 
a general way the boundaries between the Portuguese and the Brit- 
ish spheres in East Africa and provided "^ that goods in transit across 
the Portuguese territories to or from the British sphere should pay 
dming a period of 25 years no duties in excess of 3 per cent or greater 
than the import duty. There was to be no transit duty on coins 
or precious metals. In the interior, where Nyasaland and the Portu- 
guese territories on the Zambesi interlock, not only was there to be 
free passage for persons and goods, but each country m-ight build 
railroads, telegraph lines, roads, bridges, etc., in the territory of the 
other and import the material therefor free.^^ Navigation on the 
Zambesi and Shire is free to the ships of all nations.^^ On the Zam- 

2< Treaty, Portugal-Transraal, Dec. 11, 187o-Oct. 7, 1882. Treaty, Portueal-Orange Free State, Mar. 
10, lS76-Oct. 20, 1S77. Agi-eeinent, High Commissioner of South Africa and Goyernor General Oi ilozam- 
bique, of Dec. IS, 1901. Brit, and For. State Papers, vol. 67, p. 1258; vol. 67, p. 745: vol. 95, p. 931. 

^Concluded and signed by British and Portuguese local officials. Hertslet, vol. 26, pp. 820-833.. See 
also Yearbook of Union of South Africa, 1917,. p. 558. Negotiations are proceeding for a revision of the 
treaty. The Times (London) Oct. 12 and 24,' 1921. 

26 Art. 3. The provision in regard to spirits relates to those over 3 per cent proof, or 1.716'^ C. 

27 Art. 35. 

28 Art. 38. The Transvaal duties on goods in transit are collected at Lourengo Marques. Goods ordered 
bona Sde for the Transvaal and then by change of plan reexported elsewhere are exempt from export or 
reexport duty. (Arts. 36, 39.) 

This treaty contains a great number of other provisions in regard to importation of native labor into the 
Transvaal, raihoad traffic, etc. Laborers returning from the Transvaal are entitled to bring in 60 kilo- 
grams of personal baggage free, but occasional inspections are authorized to prevent a trade in dutiable 
goods from growing up imder cover of the provision. Penalties are imposed on any native found by the 
inspection to be bringing in goods dutiable at over 12 shillings and 6 pence, the amoimt which the British 
Government pavs to the Mozambique customs for each laborer so returning. (Art. 119.) 

29 Hertslet, vol. 19, p. 777. 

30 Art XL 

31 Art. XI, pars, i, 5, 8. 
82 Art. Xn. 



PORTUGAL. 489 

besi there are no transit dues, no differential treatment as between 
English and Portuguese vessels, and no toll on the sole fact of naviga- 
tion. On any connecting railroad or roads there are no higher rates 
for foreigners than for nationals. ^^ These provisions are very similar 
to those of the final act of the conference of Berlin for the navigation 
of the Congo. 

DIVERSITY OF TARIFF ARRANGEMENTS. 

The Portuguese possessions may be classified, in respect to pre- 
vailing tariff arrangements,^s follows: 

(1) Outlying parts of Portugal: Madeira and the Azores. — These 
islands are considered a part of Portugal; between them and the 
mother country there is free trade in both directions; the tariff of 
Portugal is the tariff of the "adjacent islands"; the treatment 
accorded to and received from the Portuguese colonies is the same 
for both; but there are exceptions to each of these generalizations. 

(2) O'pen-d.oor territories .—A portion of the province of Angola — 
namely, the enclave of Cabinda, north of the Congo River, and the 
territories south of the river extending to the River Loge — lies within 
the conventional basin of the Congo and is subject to the open-door 
regime laid down in the final act of the conference of Berlin in 1885. 

Macao, located very close to the free port of Hongkong, was made, 
almost of necessity^ a free port. 

(3) Territories under concession companies. — Two great areas in 
Portuguese East Africa are not under the direct administration of 
the State, but are subject to chartered companies. Portuguese and 
colonial products are granted by the companies differentials very 
similar to those found in the colonies, but the products of these terri- 
tories are treated in Portugal as those of foreign countries. 

(4) Special regirae colonies, — The other colonial possessions have 
special tariffs of their own when, indeed, the same colony is not 
divided into two or more tariff districts having distinct tarilf sched- 
ules. They give and receive -from the m^other country and other 
colonies special rates, both on imports and (except in Guinea) on 
exports. 

In Portuguese Guinea there was maintained a regime of low duties 
and the open door, except since 1892 in reference to alcoholic liquors; 
but the partial application in 1920 of the legislation of 1914 established 
a differential in favor of Portugal of 50 per cent through nearly the 
whole schedule of import duties. 

PREFERENTIAL TREATMENT IN PORTUGAL OF IMPORTS FROM 

PORTUGUESE COLONIES. 

Under this heading only the duties levied in Portugal will be con- 
sidered. Except as otherwise stated, the terms '^Portugar' or 
"Portuguese" include throughout Madeira and the Azores. The 
differential export duties of the individual colonies which favor ship- 
ment of products to the mother country are discussed in Section IV, 

History. 

To go no further back, the tariff act of 1852 admitted to Portugal 
the products of the Portuguese overseas possessions on payment of 
one-fifth of the usual duties. By exceptions introduced in 1861 or 

83 Art. XIII. 



490 COLOXIAL TAEIFF POLICIES. 

soon thereafterj^* coffee and cacao ^^ paid one-fourtli of the ordinary 
rate; there was no differential on sugary but tobacco from Angola 
and Cape Verde paid 100 reis (10.8 cents), vrhile that from Brazil 
paid 150, and other foreign tobaccos 200 reis per kilogram.^^ 

The tariff act of December 27, 1870, greatly reduced and restricted 
these differentials. The rate of duty was increased; it had been one- 
fifth of the rates on foreign goods, it was raised to one-half; and the 
restrictions were imposed that the goods must come dii^ectly and in 
national vessels, though this last restriction did not apply to products 
of Timor, Portuguese India, and Mozambique. By the tariff of 1887, 
coffee and tobacco were exceptions, as was also maize (though by a 
law of July 15, 1889, maize, too, was given the reduced rate); and 
rice, spices, and fibers nationalized in Asia or East Africa were 
treated as products of the colonies. Products of Macao were treated 
as foreign; but by the law of July 19, 1889, the 50 per cent redu-ction 
was extended to tea, if imported as above. ^^ 

Presext Protisioxs. 

The tariff of 1892 ^^ made no important changes in the colonial 
preferences^ nor have these preferences been radically altered since. 
Fifty per cent continues to be the general rate of rebate on colonial 
products, but in eff'ect this percentage has been greatly increased for 
articles dutiable at ad valorem rates, by the depreciation of the ex- 
cudo and the requirem^ent that one-half of these duties levied upon 
foreign, but not colonial, products are to be paid in gold at the pre- 
war rate of exchange. Transportation in national vessels is still re- 
quired to entitle products to receive this preference, but the require- 
ment of direct transportation is waived where origin is properly 
certified. ^^ 

Timber, the produce of West African provinces, vdien trans- 
ported directly in national vessels, and raw cotton from any colony, 
transported in national vessels or foreign vessels with regular services 
between Portugal and the colonies, enter Portugal free.^^ 

In 1901 it was decreed that the differential of 50 per cent on sugar 
entering Portugal from Angola or Mozambique should be main- 
tained for 15 years, for a cpantity up to 6,000,000 Mlos from each 
of the two provinces, as before, in accordance with the law of Decem- 
ber 27, 1870. THiatever the total imported, the total duty remitted 
to each was not to exceed 50 per cent of the duty on 6,000^000 Idlos, 
to be prorated if nexessary.^^ 

8< Tarili of Dec. 18, 1S61, edition of 1S65, p. 35. 

'^ Cacao is the raw, cocoa the prepared, product. 

S6 Brazil had been a Portuguese colony until 1822. Portuguese treaties still reserve to Portugal the right 
to extend special iavors to Brazil, but it does not appear that any are nov.- extended. 

^ B. I, d. D. :s^o. 9, 1S91. 

2S Law of Dec. 24, 1S91, in force Feb. 1, 1S92: B. I. d. D. No. 9 (2d ed.). 

3s Pautas, Tratados, Convengoes e Modus- Vivendi das Alfandegas do Continente e Ilhas Adjacentes 
(2d ed., 1913) . Art. 18 of the preUminary provisions, citing an order of 1S93. This provision was extended 
to all the products of Macao by the tariff of 1S92. The special pro\"isions for Madeira are discussed on p. 492. 

" Decrees of June 6, IS^S, and Z>.Iar. 20, 1906, respectivelv. Cotton from Angola entered free by decree ol 
Sept. 2, 1901. Tariff, 1913, pp. 24, 31. 

*i B. I. d. D., Sth Sup., p. 4. A local manufacturing tax of 20 reis per kilogram was to be paid in these 
colonies, but not on the sugar exported. There was to be no export diuy except the statis'tical fee of 1 
realper kilo. The freedom of importation of sugar machinery, implements, and accessories, already existing 
in these provinces, was to be maintained for 15 years: so also the free entry of sacks, sacking, etc., of Portu- 
guese origin used in the exportation of sugar. A decree of Nov. 25, 1914^ exempted from import duty all 
construction materials imported for sugar factories. 



PORTTJGAI.. 491 

In 1903 the colonial preference was extended to sugar from Mozam- 
bique, even though imported in foreign vessels, if it came from ports 
not served directly or by transshipment by Portuguese lines. ^^ 

In 1917 this regime by which the sugar of Angola and Mozambique 
was admitted to Portugal on payment of 50 per cent of the lowest 
duty paid by foreign sugars was guaranteed for 20 years from the 
date of the law for the reorganization of the colonial governments/^ 
with the additional provision that when the amount should exceed 
the limit fixed, this limit mu£t be considered to increase by 10 per 
cent annually.^- But by decree of September 8, 1920, not only was 
the preference to colonial sugar abolished by putting sugar of all 
origins on the free list, but the producers of Mozambique and Angola 
were required within 12 months to send to Portugal 22,000 m^etric 
tons of yellow sugar at prices to be determined in accordance with 
the provisions of the decree. *^^ 

Changes have been m^uch more numerous in the period which 
begins with the Republican revolution of October, 1910. By a 
decree of December 27, 1910, all refrigerated meat for the Lisbon 
market was admitted free; both meat and cattle from the colonies 
were not only to be admitted free, but were to be exported from the 
colonies without payment of export duty. Two and one-half years 
later a duty of 30 reis per kilogram was put on foreign refrigerated 
beef (but not on veal) .^^ 

In 1912 fruits, fresh or dry, from the colonies vrere granted free 
entry.^® 

In 1914 the general rate on maize was changed to 9 reis per kilo- 
gram, but maize from the colonies was charged only 1 real. The quan- 
tities which were to be allowed entry at this rate vfere 7,000,000 kilo- 
grams each from Mozambique and Angola and a total of 1,000,000 
kilograms from the other colonies. 

During the war a great variety of special and presumably tempo- 
rary regulations were in force. Foodstuffs were most affected, 
though even before the war it was not unusual in Portugal to have 
special decrees permitting the importation of certain cereals free or 
at reduced rates for certain times or in quantity up to a prescribed 
total. From June 1, 1916, a long list of foodstuffs v^ere to enter free 
until the end of the v/ar. Although not every one of these decrees 
has been examined carefully, it seems safe to say that few of them had 
any special provisions for the colonies. A law of September 24, 1915, 
removed permanently the duties on colonial cattle and meat and 
authorized the Government to extend this exemption to similar for- 
eign products. A decree of April 28, 1919, allowed the free importa- 

« B. I. d. D., 17th Sup. to No. 9. 

43 Aug. 15, 1914. 

«4 Decree of Nov. 28, 1917, art. 9 sec. 12, par. 2. The American vice consul at Boma reported in 1911 
that the sugar production of Angola had reached a maximum in 1901, and that thereafter the competition 
of beet sugar tmned the manufacturers to the production of hard rum. Since 1907, especially, efforts have 
been made to increase sugar production and decrease that of rum. See legislation in regard to alcoholic 
beverages, p. 497. 

44a Board of Trade Journal, Oct. 14, 1920, p. 466. The colonial producers were required to send 14,000 
metric tons of white sugar. If the production of Mozambique exceeded 40,000 tons and if that of Angola 
exceeded 8,000 tons, one- third of the excess in each case might be exported to non-Portuguese ports; if 
the crops fell short, smaller proportions might be exported to foreign destinations. 

^6 B. I. d. D,, 49th Sup. to No. 9. It is not clear whether or not this repealed the earlier exemption of 
colonial beef and substituted one-half of the foreign rate, according to the usual rule. The law put no 
increased burden on foreign meats, for it repealed the consumption duty of 30 reis. This duty had been 
levied on for the colonial product. 

^6 Law of April 13, 1912. B . I. d. D ., 44th Sup. The 47th Sup. corrects this to exclude pineapples, but 
the Portuguese text says plainly that pineapples are included. 

185766°— 22 32 



492 COLONIAL TAEIFF POLICIES. 

tioii of olive oil until furtlier notice, and reduced the duty on olive oil 
if exported to the colonies from 200 reis per kilogram gross to 100 reis. 
Authorization was also given for the free importation of colonial m^aize 
in foreign vessels. In the post-war period prohibitions and licensing 
systems have been gradually abandoned, but surtaxes upon luxuries 
and unessentials have been freely employed to check imports from 
foreign countries. Trade with the colonies has been relatively 
uni'estricted, and some measm^es, e. g., the surtax upon rough ivory 
of foreign origin, may have benefitted the colonies. 

On the export trade there were also numerous restrictions duruig 
the war, particularly m the form of additional export duties and pro- 
hibitions of exportation. In a number of cases exportation was per- 
mitted to the colonies, although it was forbidden to other destinations. 
The surtaxes on the exportation of fish, eggs, cheese, and wool were 
not applied to exports destined for the colonies.^^ A decree of April 
29, 1916, forbade the exportation to the colonies of automobiles, of 
combustibles, and of foodstuffs of which there was a scarcity in Por- 
tugal. "^^ Lists were to be furnished from time to time of the food- 
stuffs and other articles whose export was absolutely prohibited and 
those which could be exported to the colonies when special authori- 
zation was obtamed. By the law of September 24, 1915, the ex- 
portation of cattle, sheep, and swine was prohibited, except that 
when intended for breeding purposes they might be sent to the 
colonies. 

A differential m the tare regulations was in force from 1903 to 1912. 
The tare previously allowed on sugar m sacks had been 2 per cent; 
for colonial sugar this was conthiued, but for foreign sugar the rate 
was made 2| per cent for that in double sacks and 1| per cent for that 
in smgie sacks. In 1912 the rate of 1§ per cent was made general. ^^ 

SPECIAL PROVISIONS FOR MADEIRA AND THE AZORES. 

Madeira. — Special provisions for Madeira, as exceptions from the 
regime common to the mother country, Madeira, and the Azores, ap- 
pear at least as early as the tariff of 1892, These special provisions 
relate to maize, alcohol, tobacco, and sugar, and concern both the 
rates at which foreign and colonial products enter the islands and 
those for the products of Madeha entermg Portugal and the colonies. 
Thus, under the tariff of 1892 foreign m.aize in the grain paid in Ma- 
deira only one-third of the rate in force in Portugal, while that from 
the Cape Verde Islands entered free; on the other hand, any maize 
shipped from Madeha to Portugal paid in Portugal the full rate. This 
provision is apparently still in force,^^ but the law of June 29, 1913, 
made an additional provision that maize in the grain from the Portu- 
guese overseas possessions ^^ should pay on entermg Madeira only 
one-half of the duties prescribed in article 18 of the provisions pre- 
liminary to the tariff schedules, i. e., one-half of one-third of the 
general rate in force in Portugal. 

«7 Decree of Mar. 30, 1915. See also Nova Tabella das Sobretaxas, July , 1916. 

<8 A decree of Feb. 20, 1915, had permitted the export of tires and other automobile accessories from Por- 
tugal to the colonies and vice versa, though a general prohibition had been established on such exportation 
by a decree of IN ov. 28, 1914. The prohibition upon the exportation of automobiles to the colonies was 
withdrawn on Nov. 12, 1919. 

" Regulation of July 9, 1903, B. I. d. D., 17th Sup. to No. 9. Decree of Mar. 2, 1912, 44th Sup. 

M Tariff, 1913. 

61 Except Cape Verde. 



PORTUGAL. 493 

Many decrees, having for their object the cheapening of foodstuffs 
in Portugal, apphed in part or exclusively to Madeira. This was 
especially true during the war. For instance, a decree of August 19, 
1914, permitted unlimited quantities of wheat to enter Madeira 
under a duty of 1 real per kilogram.^^ 

By decree of September 24, 1903, alcohol and brandy from Madeira 
were to pay when imported into Portugal the full foreign rate.^^ In 
1913 tobacco was still imported into Madeira and the Azores under 
the law of 1885; but this law had been twice changed as regards the 
rates for Portugal itself.^* S^ar received special attention. By the 
tariff of 1892 Madeira sugar was to pay when imported into Portugal 
and the Azores one-fourth of the rate on foreign sugars. Later even 
this duty was taken off for the five years following December 30, 
1895.^^ This exemption was renewed by the decree of September 24, 
1903; but sugar produced in Madeira from imported molasses was to 
pay the full foreign rates not only in Portugal but also in the colonies.^^ 
The exemption was maintained by decree of March 13 and law of 
December 11, 1911, which m.ade sugar imported from Madeira to 
Portugal free not only from the Portuguese import duties but also 
from the export duty in Madeira. The duties on sugar imported into 
Madeira were regulated hj the decree of September 24, 1903, which 
imposed for sugars above 19 Dutch standard, regardless of origin, a 
duty of 145 reis per kilogram. Further, the law of April 27, 1896, 
subjected the sugar of the Azores and of the colonies to a manu- 
facturing tax of 15 reis per kilogram, but made no mention of Madeira. 

Aside from the provisions already mentioned under the account of 
Madeira, a law of July 15, 1903, imposed a manufacturing tax on 
sugar produced in the Azores and an import duty of one-half of the 
foreign rate when this entered Portugal, and restricted even this con- 
cession to 1,000 tons for the first year of manufacture, with an ulti- 
mate limit of 4,000 tons. This '^additional duty" was abrogated in 
1906.^^ 

Since 1904 beer from the Azores has been treated in Portugal as a 
foreign product. 

TREATMENT OF IMPORTS INTO THE COLONIES. 

In the framing of the tariffs for the colonies general legislation has 
been the exception. Even in 1892, when nearly all the colonial 
tariffs were overhauled in the same year and several were decreed on 
the same day, each was proclaimed separately, and no two were 
alike. Even the most important feature of a general colonial tariff 
policy, the am.ount of the differential, if any, to be given to products 
of the mother country, has not been determined by general legis- 
lation, has never been applied uniformly even among the colonies 
which have given preferences, and is at present generalized only to 
the extent of the provision of the law of 1914, which prescribes that 
the differential shall not be less than 50 per cent. On some other 
points, however, the special laws for the preference-giving colonies 

53 The real is a trifle more than one-tenth of a cent. The reference here is not to special provisions for 
colonial products, but to arrangements which were special for Madeira as distinct from Portugal. 

53 B. I. d. D., 18th Sup. 

54 Tariff, 1913. Referring to laws of Mar. 3, 1891, and Oct. 27, 1906. 

55 B. I. d. D., 6th Sup. to No. 9. The Azores \\ere included. 

56 Ibid., 18th Sup. 

57 B. I. d. D., 17th Sup. and 26fch Sup. The law of 1903 had imposed the manufacturing duty for 15 years. 



494 COLONIAL TAEIFF POLICIES. 

are iu agreement. The}^ all treat foreign products (with some excep- 
tions) nationalized in Portugal as Portuguese, and all allow the differ- 
ential of 20 per cent on imports of foreign goods reexported from 
Portugal, though they differ in that some require that the reexporta- 
tion be in national vessels. ^^ 

General Legislation. 

Before taking up the provisions applicable to separate colonies, the 
more important of the general laws or decrees which apply to all or 
to several of the colonies may be mentioned. These have affected 
particular articles; they have either changed the rate of the duty, 
leaving the percentage of differential undisturbed, or have changed 
the differential by altering either the Portuguese or the foreign rate 
or both, or have put the article on the free list, and thus swept away 
the differential. 

Of the first kuad, those which merely changed the rate of duty, were: 
The law of September 2, 1892, whicli raised the duty on sugar from 
40 reis (about 4 cents) per kilogram to 80; the decree of November 
26; 1903, which established rates on mineral oils, except kerosene; 
and the laws of November 26, 1903, and March 20, 1915, which fixed 
rates on automobiles and their parts. ^® 

Of the second kind — those which changed the proportion as well as 
the amount of the differential — is the tobacco law of December 1, 
1887, apparently the oldest of these laws which still remains partly 
in force. By this law the rate of duty on Portuguese leaf, roll, or 
plug tobacco was only 25 reis per Idlogram; as against 1,800 reis on 
the foreign product; Portuguese cigars paid 150, and other manu- 
factured tobaccos 100, while all foreign manufactured varieties, 
including cigars, were charged 3,600 reis per kilogram. ^^ 

A law of September 25, 1908, im_poses, in addition to the stamp 
tax of 25 reis on each bottle of foreign mineral and medicinal waters, 
a further tax of 50 reis per kilogram. ^ 

Another example is the decree of December 27, 1915, which 
imposes an export surtax of 3 per cent on all cocoa exported to 
foreign countries. Such a duty had already been imposed on exporta- 
tion from Portugal. 

Of the third kind, decrees which put certain articles on the free 
list and thus abolish all differentials, three examples may be cited. 
^'The provisions regulating prospecting and the working of mines 

58 Heexportation does not require tliat the goods leave the ship, and it need involve little trouble or 
expense. ' The formalities can be attended to by the steamshin company if the shipner provides lists of 
the packages ^-ith their marks, contents, etc. By decree of Oct. 3, 1901, sugar receiving a drav.'back on 
exportation from. Portugal was classed as a reexport and not as a nationalized product. B. I. d. D., 3d Sup. 

The colonial tariffs of 1892 are given in Pautas Vigentes nas Alfandegas das Provincias Ultramarinas 
Portuguezas, 1892. 

69 This last-mentioned law reduced the rate on passenger cars from 120 milreis each to 50 milreis; and 
for tracks, to 14 milreis; it made automobile parts, however, which had been free, dutiable at rates varying 
according to their component materials. 

60 General legislation on alcoholic liquors, beginning with the law of June 13, 1889, for the free admission 
to the colonies of Portuguese wines, will be found under the heading *• Treatment of alcoholic beverages, " 
p. 495. 

61 B. I. d. D., 5th Sup. to No. 9. This law applies to the "Portuguese transmarine pro'^dnces" — the 
usual way of referring to the colonies— and "to the seLf-govemlng district of Timor." This reference to 
Timor Is the only one of its kind in the decrees and laws cited. If the language quoted was necessajy in 
this case, it would seem that the other general laws and decrees mentioned do not apply to th6 island of 
Timor. 

The decree of Dee. 27, 1910, exempting colonial refrigerated meat and meat cattle exported to Portugal 
from all colonial export duties, has been mentioned previously. 



PORTUGAL. 495 

in the colonies, "^^ approved by the decree of September 20, 1906, 
provide that machines exclusively for working mines or for preparing 
the ore are to be admitted to the colonies on payment of a statistical 
duty of one-tenth of 1 per cent.^^ A decree of July 3, 1911, made 
general a provision already enacted for Principe and Guinea, that 
wire or other netting to exclude flies and mosquitoes from dwellings, 
with meshes not exceeding 3 square millimeters in area, should 
enter all the colonies free of all charges. Another decree, of October 
28, 1911, specified that agricultural and industrial machinerj^, v/hich 
was granted free entry to ^e Portuguese colonies by the various 
free lists established in 1892 or earlier, shall be subjected to no other 
charges either by colonial governments or by administering com- 
panies. The decree states that such charges had been operating 
practically as a nullification of the exemption. ^* A decree of Novem- 
ber 15, 1913, authorized the colonial governors to grant free tempo- 
rary importation, subject to reexportation within a year, to articles 
for the preparation or packing of agricultural or industrial products 
for export. ^^ 

Treatment of Alcoholic Beverages. 

The treatment to be accorded to alcoholic beverages is prescribed 
in considerable part by legislation which is general or which at least 
applies to several rather than to individual colonies. This is due in 
part to the provisions of the general treaties, which require certain 
minimum duties throughout the greater part of Portuguese Africa, 
and in part to the special interest which the Portuguese have taken 
in their vfine trade. The history of these duties is com_plicated and 
only an outline of it need be given. To facilitate comparison, all 
rates will be given in reis per hectoliter, though the earlier duties 
were levied per decaliter, and the later by liters, it will simplify 
the account also to follow the history of duties on wines through to 
the present time before taking up those on distilled liquors. 

The earlier tariffs levied specific rates on alcoholic beverages, and 
to these the general preferential in favor of Portuguese products v/as 
applied. This differential was 50 per cent in Mozambique and 
Guinea, and 70 per cent in the other colonies, except that in the 
Congo District and Ambriz, in Timor, and in Macao there was and 
is no differential — at least there is none in their tariffs. In India, 
both Portuguese and foreign wines were subject to specific duties, 
the former only about one-sixth the amount of the latter, i. e.^ 
there Vv^as a differential of five-sixths. 

wine: rates and preferences. 

The rates on wmes in these early tariffs were from 2,000 to 8,000 
reis per hectoliter ($0.08 to $0.33 per gallon) and there was a special 

f^2 Disposicoes que reguiam a Pesquisa e Lavre de Minas nas possessoes iTltramarmas, Lisbon, i90i-. p. 48, 
arts. 138, 139. 

^ Export duties also were made uniform at the following rates: Precious stones and metals, one-half of 
1 per cent of gross value; ores of precious stones and metals, 5 per cent; other ores, one one-thounandth of 
gross value. (This is a statistical duty.) 

6* Decrees of Mar. 23 and June 7, 1911^ for Princip^ and Guinea, Another decree of June 7, 1911, ruled 
that baroed wire was included with agricultural machinery. A decree of Sept. 2, 1901, provided an exten- 
sion of 15 years for the free importation of agricultural and industrial machinery; why such a decree should 
be necessary is not clear. 

65 Text on file in Department of Commerce. The decree also granted free entry to articles of furniture 
for repairs or further manufacture, to wagons and cattle used in transportation across the frontier, and to 
effects of persons staying in the country only temporarily, such as theater companies. 



496 COLOl^IAL TAEIFF POLICIES. 

rate of 20,000 reis on cliarapagiie iii three of them. By a law of 
June 13, 1889, all duties on Portuguese wines were removed. 

This 100 per cent differential was repealed b}" the tariffs of 1892, 
at least m reference to Mozambique, Guinea, and Sao Thome and 
Principe. In Guinea and the Congo District the single duty of 
2,700 reis was put on all alcoholic beverages, regardless of kind or 
source. In Mozambique the duties for national and foreign wines 
were specific, the former paying 2,000 as agauist 6,000, 8,000, or 
20,000 reis. In Sao Thome and Principe the differential was 600 
against 15,000 or 40,000 reis.^^ The new rates in these colonies 
ran from 6,000 to 30,000 reis, so that even, if the general differentials 
of 90 percent and 80 per cent, respectively, were applied, the amount 
of the differential alone was greater than the whole of the rate 
previously paid by the foreign product. In India the differential 
was somewhat reduced, except on champagnes, but the limit as to 
quantity was taken off. 

A decree of April 25, 1895, 'temporarily" reduced to 100 reis (a 
cent a gallon) the duties applicable to ''Portuguese wines, ordinary 
and licpjeur, and wme vuiegar in casks," throughout Portuguese 
Africa; vrhiie on these products if of foreign origui, and on all other 
wines and fermented beverages, the duty was mcreased by 3,000 
reis.^^ 

A law of May 7, 1902, raised the rates on certain classes of Portu- 
guese wines. Ordinary wines not exceeding 15° were left at 100 reis 
per hectoliter, except that in Sao Thome and Principe after five 
years, and in Mozambique south of the River Sabi immediately, the 
rate was to be 800 reis. Wines of greater strength not exceeding 17°, 
and sweet, full bodied and special wines such as Madeira, port, and 
muscatel up to 23°, were to pay 400 reis, with an exception similar 
to that above — the rate for the regions excepted being 1,000 reis.^ 
For wines of strength above 17° the rate was 20,000 reis. On foreign 
wines, even though reexported from Portugal, the rate was 30,000, 
or if in bottles containing not over a liter each, 50,000 reis. Foreign 
champagnes were to pay 60,000 while the rates on the national 
product Vv^ere only 1,000 and 5,000 reis. 

These rates are apparently stili in force except in Loanda, Ben- 
guela and Mossamedes and Mozambique, where tariffs of May 27 
1911, and of May 15, 1916, have superseded them. The new rates 
are much higher on Portuguese wines — on those not over 16°, from 
3,000 to 10,000 reis instead of 100 and 400; but as the rentes on foreign 
wines are 50,000 and 60,000 reis, the differential is still very large. 
On sparkling wines the new rates are 10,000, as compared with 
100,000 reis ($4.09 per gaUon) on the foreign, increasing the differ- 
ential absolutely, though decreasing it proportionately. Only in 

66 2.4 cents per gallon against $0.61 or 81.63. Whether the free importation of Portuguese wines into 
Loanda, Benguela, and Mossamedes and the Cape Verde Islands was repealed in 1892 is not clear, but in 
any case the absolute amoiuit of the differential was increased. 

67 B. 1. d. D., 1st Sup. to No. 10. Sao Thome was not included, though normally the Cape Verde Islands 
and Sao Thome and PrincipiS seem to be treated as a part of Africa. This decree, or at least the account 
in the Enghsh edition of the B, I. d. I)., does not mention the unit, but presumably it is the decaliter as 
before. The punctuation given above is as found, but in the description of foreign products the reading is: 
"wines, ordinary and liqueur, and wine -vinegar, in ca'^ks." 

68 In Sao Thome and Principe there was to be an intermediate rate in the fourth and fifth years of 400 
reis on the weaker wines and 800 on the stronger. Art. 30 of the law, according to the English and Spanish 
texts of the B. I. d. D., provides that "the full differential benefit" of the tariffs in force on Portuguese 
goods "shall cease to be applied as regards wines" and other alcoholic beverages. Whatever else this 
means, it is not an abandonment of the differentials. 



PORTUGAL,. 497 

Mozambique, on wines above 16°, is the differential made com- 
paratively small — 45,000 as compared with 50,000 reis, 

DISTILLED liquors: RATES AND PREFERENCES. 

In the tariffs of 1877-1882 distilled liquors paid mostly 9,000 to 
12,000 reis per hectoliter of liquid.^^ The Portuguese product paid 
30 per cent or 50 per cent of these rates, as mentioned above. 

Among other provisions of the Brussels treaty of 1890 there were 
included provisions for restricting the liquor trade and the trade in 
arms. A minimum duty of 15 francs per hectoliter (10.96 cents per 
gallon) of alcohol at 50° centesimal was required in all the African 
colonies between 20° N, and 22° S. The provisions of this treaty 
effective on April 2, 1892, applied to all islands within 100 marine 
miles of the coast; but Sao Thome and Principe are a little beyond 
and the Cape Verde Islands are considerably beyond this distance. 
This called forth the Portuguese decree of August 3, 1892, which set a 
rate of 2,700 reis per hectoliter (11 cents per gallon) of alcohol of 60° 
in the Congo district, where previously there had been no duty, in 
accordance with the final act of the conference of Berlin. In Guinea 
the tariff of 1892 established a rate of 2,700 reis per hectoliter of 
liquid, regardless of kind or strength and without differential; but 
in the other African colonies the tariffs of 1892 increased the rates, 
apparently without regard to the Brussels treaty, for the previous 
rates had been high enough to meet the treaty requirements J*' 
The new rates ran from 12,000 to 40,000 reis per hectoliter of liquid, 
and except in Sao Thome and Principe the differential was decreased 
to 40 per cent. In those islands the differential was expressed in 
specific rates, and ^.mounted to 80 and 85 per cent. In 1897 the 40 
per cent differential was introduced into Guinea by raising the rate 
on foreign J3randies, etc., to 4,500 reis. 

Meanwhile, in 1895, in the other African colonies the differential, 
as reckoned in percentage, has been decreased by the imposing of 
an increase on all distilled liquors equal to half of the duty on the 
foreign product, while no differential was allowed on the increase.'^^ 

In 1899 increases were made in Ambriz and in Loanda, Benguela, 
and Mossamedes, the latter being an addition applied without dif- 
ferential. In this year the Brussels treaty was revised, though the 
new rate of 70 francs per hectoliter of alcohol at 50° did not come 
into force until 1900. Decrees of July 7, 1900, raised the rate for 
the Congo district, Ambriz, Guinea, and the Kyassa Company's ter- 
ritories to 12,600 reis, with proportionate increases for greater 
strengths, the increase specified being 252 reis for each degree above 
50°, In the rest of Angola and of Mozambique north of the Sabi 
the new rates made no great changes in the general level of the rates 
or of the differentials. The foreign rates in Mozambique ran from 
20,700 to 45,000 reis and in Angola from 25,101 to 57,811 reis, with 

69 $0.37 to $0.49 per gallon. Some paid 18,000 in Loanda, Benguela and Mossamedes, and the rates in 
Guinea were only 2,500 and 4,000 reis. 

^0 The Brussels treaty was not mentioned in the discussion above of the duties on wines, for the reason 
that these duties seem always to have been above the minima established in the treaty of 1890 and its revi- 
sions of 1899 anti 1906. The rate prescribed applied to all spirituous beverages, but, as the application was 
based on alcoholic content, the less intoxicating liquors were not much afiected. The treaty of 1899 makes 
explicit what was apparently the interpretation in practice of the earlier treaty, that liquors under 50° 
centesimal were taxed proportionately less, as those over 50" were taxed proportionately more than the 
rate stipulated for the basic unit. 

'fi Prtncip6 v/as not included. 



498 COLONIAL TARIFF POLICIES. 

differentials ranging from 23.2 per cent to 26.6 per cent and from 
18.8 per cent to 25.4 per cent, respectively. Intermediate rates half 
way between those for foreign and national products, respectively, 
were provided for foreign liquors reexported from Portugal. 

By the law of May 7, 1902, the importation of distilled liquors was 
prohibited in Mozambique south of the River Sabi, in Inham.bane, 
and in the military district of Gaza. A like prohibition on alcohol 
was imposed in Sao Thome and Principe, and rates of 45,000 and 
70,000 reis were imposed on gin, liqueurs, etc. 

The Brussels conference of 1906 raised the minimum rate on spir- 
itous liquors in the territory between 20° north and 22° south to 100 
francs (73.05 cents per gallon), retaining the former unit and method 
of levying.'^^ The decree of November 28, 1907, which put in force 
the revised rates, raised the duty in the Congo district, Ambriz, and 
Guinea to 18,000 reis per hectoliter of 50°. 

Apparently there has been no general legislation since 1907, but 
according' to the law of May 27, 1911, distilled liquors ^^ were 
charged in Angola 60,000 reis per hectoliter ($2.45 per gallon) if 
of Portuguese production and 160,000 reis if foreign, and the Mozam- 
bique tariff of 1916 imposes rates from 30,000 to 63,000 reis per 
hectoliter of 50° centesimal on Portuguese, as against 35,000 to 
80,000 reis on foreign. 

SUMMARY. 

With few exceptions the whole history of the wine duties in the Por- 
tuguese colonies since 1892 is one of increasing rates and increasing dif- 
ferentials. After making Portuguese wines entirely free, duties were 
put on them or the rates were increased only simultaneously with 
oft^setting increases in the rates on foreign products. The chief ex- 
ceptions are that there was in Guinea from 1892 to 1897 no differ- 
ential, and that some of the increases in Angola in 1911 and in 
Mozambique in 1916 were not offset by increases on the foreign 
product; but in these cases the rates on the Portuguese product had 
previously been insignificant, and after the change the smallest differ- 
ential — favoring the Portuguese product — on wines under 16° was 
in no case less than 8Q per cent of the foreign rate. On distilled 
liquors the percentage of the differential has been, on the whole, 
steadily decreased; in absolute amount it first was increased, then 
was maintained for a period at an even ratio, later was reduced, 
and finally was again increased. 

IV. Taeiffs of Colonies Individua_lly. 

[Those not v/ishing to follow the detailed discussion of Portuguese tariff policy as applied in the separate 
Portuguese colonies should pass over pp. 498-527, inclusive. They were prepared for detailed study, 
rather than for the general reader. Summaries will be found on pp. 506 and 517.] 

PEOYINCE OF ANGOLA. 

Location and Divisions. 

The colony of Angola lies on the west coast of Africa, south ^- of the 
Belgian Congo, north of (former) German Southwest Africa, entirely 

" All these treaties required the imposition of a like excise duty on the local production of distilled 
liquors. By special exception this treaty of 1906 allowed the Government of Angola to return to the dis- 
tillers 30 per cent of this charge, the rebate to be used in transfonning their plants into sugar factories. 

73 Prepared rum, gin brandy, and other alcoholic beverages. The importation of alcohol was prohib- 
ited. 

1* Except the enclave, Cabinda, which lies on the coast north of the Congo. 



PORTUGAL. 



499 



within the tropical zone. It has an area of 484,000 square miles and a 
population of perhaps 4,000,000. For purposes of customs adminis- 
tration, it is divided into three divisions or districts — a free-trade 
zone, the district of Ambriz, and the district of Loanda, Benguela, 
and Mossamedes. 

(A) Free-Trade Zone. 

The free-trade zone embraces a small enclave north of the Congo 
River (known as Cabinda) and that part of Angola which lies north of 
the River Loge and, further-inland, of the watershed of the Congo. 
This zone — the Portuguese Congo district — is within the conventional 
basin of the Congo, and is therefore subject to the provisions of the 
final act of the conference of Berlin. Accordingly, the tariff regime 
was regulated until recently by the treaties which have already been 
fully considered in the sections on the French colonies and on the 
Belgian Congo, and it need here be summarized only by saying that 
by the treaty of 1885 no import duties and no differential duties were 
permitted; in 1890 (effective 1892) maximum import duties of 10 per 
cent were allowed; but under Portugal's treaty of 1892 with the Congo 
State and France the rate actually levied was set at 6 per cent, with 
some exceptions, and this rate was maintained until, in 1902, it was 
increased to 10 per cent. In 1911 the treaty with the Congo State 
and France was terminated. But an amendment made in the pre- 
ceding year (1910) to the treaty of Berlin authorized duties greater 
than 10 per cent on arms and powder. It does not appear that the 
import rates have been changed since 1892, except (1) by the legis- 
lation already noted for the colonies generally, and (2) by certain 
legislation valid for the whole of Angola ^'^ and (3) by legislation in 
regard to alcoholic beverages."^ 

By the treaty of 1892 export duties were set at 10 per cent on rubber 
and ivory and at 5 per cent on other tropical products. Framed in 
accordance with this provision, the schedule of specific duties on 
exports contained some rates much greater than those previously 
in force, as may be seen in the following lists : 

Table 3. — Export duties of the Portuguese Congo district. 
[In reis per 100 kilos. «] 



Article. 


Decree of 
Sept. 2, 
1886. & 


Treaty of 
1892. c 


Ivory 


eg, 000 

3,600 
2,400 

1,200 
1,200 
400 
200 
200 
200 


f cZ18,000 
{ f'^S 800 


Rubber . . 


I / 37' 800 
7 200 


Coffee 


1 683 


Copal: 

Red 


1 485 


White 


270 


Pahn oil 


495 


Palm kernels 


252 


Oleaginous seeds and groundnuts 


245 


Sesamft . 


225 







a 1,000 reis per 100 kilos=$0.49 per 100 pounds. 
bB.I.d. D. No. 11,1891. 
c Pautas Vigentes, p. 66. 
d Pieces, 

c Tusks up to 6 kilos. . 

/Tusks over 6 kilos. 
75 See pp. 504-506. 

'« See p. 495, A decree of Aug, 19, 1914, raised the export rate on uncleaned coffee to 19 per cent, but there 
is some doubt whether this ever came into operation. See p. 506, footnote 1. 



500 COLOXIAL TAEIFF POLICIES. 

These export duties continued in force apparently until super- 
seded, except as to palm kernels and palm oil, by the provincial 
legislation of 1920 (see p. 506), but necessarily in the Congo Basin 
the rates to foreign countries are the same as to Portugal. 

(B) District of Ajibsiz. 

Ambriz lies somewhat north of 8° south latitude and is, therefore 
within the territory which was claimed by Portugal throughout the 
nineteenth century, but not recognized as Portuguese until the con- 
ference of Berlin. While various regulations or rates apply to the 
whole province of Angola, and othei^ to all parts thereof outside of 
the free-trade zone, Ambriz has always had its own tariff separate 
from that of Loanda, Benguela, and Mossamedes. 

TARIFFS BEFORE 1892. 

After it had been occupied by the Portuguese in 1855, the English 
obtained a promise that the Portuguese ^' would send orders to the 
governor general of xliigola * * * to desist from all interference 
with the existing state of things in so far as relates to foreign trade 
and intercourse, v^hich order * * * should hold good until an 
understanding could be effected between the two Governments ^^dth 
regard to the Portuguese claim to possession. " ^^ No treaty was 
agreed upon, although the Portuguese were v\'illing to concede low 
duties, because the British desired assurances not unlike those 
ultimately incorporated in the final act of the conference of Berlin. 
Whatever the exact status after the Portuguese promise, a decree 
of October 10, 1856, imposed 12 per cent on foreign goods imported 
from foreign countries in foreign vessels, 10 per cent on the same 
imported in Portuguese vessels, 4 per cent on foreign goods reexported 
from Lisbon and Oporto, and 3 per cent on Portuguese goods in 
Portuguese vessels. The export duties were 3 per cent to foreign 
ports and 2 per cent to national. By treaty, however, French, 
English, and American goods, imported directly, paid only 6 per 
cent. All imports paid an additional If per cent for public Y>'orks. 
As no duties were coUected in the unoccupied territory north of 
Ambriz, the foreign traders moved to Quicembo, Ambrizette, and 
other points, and little income was derived from these duties.'^ 
Consequently, a decree of November 12, 1869, imposed a duty of 4 
per cent on aU national or foreign goods imported, regardless of the 
nationality of the vessel in which they were imnorted, and an addi- 
tional levy of 2 per cent for public works. '''^ '^is decree levied no 
export duties. ^° A report from the American consul at Boma (1914) 
refers to the quasi-recognized contraband trade between Loanda and 
Ambriz. Goods imported through Ambriz and then passing through 
other customhouses in Angola paid the consumption duties in the 
latter. By decree of December 30, 1880, warehoused goods reex- 

n Gt. Brit., Pari. Papers, Cd. 3531, 1883. 

^8 See Tito de Carvalho, Les Colonies Portugadses au point de vue Commercial, Paris and Lisbon, 1900, 
pp. 41. 42. Antonio Pedro de Carvalho, As Pautas das Alfandegas das Provincia's L Itramarinas, Lisbon, 
1870, pp. 45, 46. 

'« B^I. d. D. No. 12. Ambriz Xo. 1, 1891. 

s° '' It is formallv prohibited to send to any place south of Ambriz. by commercial messengers or in any 
other manner, goods and merchandise intended for barter." (Art. IL) This seems to have become a 
dead letter. 



PORTUGAL. 501 

ported north of Ambriz were required to leave the customhouse 
within three months and to pay 3 per cent ad valorem as storage, 
while such goods reexported from other points were entitled to six 
months' storage free. 

TARIFF OF 1892. 

Apparently there was no further legislation until the general revi- 
sion of the colonial tariffs in 1892. The law of April 16 of that year 
began with the usual provisjxjns that Portuguese products and goods 
nationalized in Portugal should pay in Ambriz only 10 per cent of the 
duties paid on similar products from foreign sources, i. e,, Portuguese 
goods should benefit by a 90 per cent reduction in the duty, and that 
foreign goods reexported from elsewhere in the province of Angola or 
from the other transmarine provinces should benefit by the_ same 
reductions, certificates of origin being required in all cases. It v/as 
further stipulated that the products of other parts of Angola and of 
the other transmaiine provinces should pay 6 per cent ad valorem, 
and that Portuguese products or foreign goods nationalized and reex- 
ported from other parts of Angola, except the Congo district, or 
from other transmarine provinces, should be free; those from the 
Congo district v/ere to pay the full duty. (Art. 6, 7.) All goods 
reexported to destinations outside of Angola were to pay 2 per cent. 
(Art. 13.) The coasting trade of the province was restricted to 
Portuguese vessels (art. 15), but under the Berlin treaty of 1885 
this would not apply to the Congo district. Foreign vessels arriving 
from abroad might carry portions of their cargo to further ports, or 
they might transship it; but such vessels so proceeding must go 
through certain formalities from which national vessels were exempt 
and transshipment could be made only to national vessels. The 
trade with the other colonies might be carried on in foreign ships 
according to the decree of August 18, 1881. The importation of 
Portuguese money from foreign ports was prohibited, as was that 
of foreign silver and copper generally. These provisions seem to be 
still in force. 

The rates of import duty in the Ambriz separate tariff of 1892 have 
remained practically unchanged. The tariff schedule contained 30 
items, with a provision for a duty of 6 per cent on all articles not 
specified. The rate on "trade'' guns, gunpowder, salt, watches, and 
a considerable list of miscellaneous manufactures was 10 per cent; 
foreign-built vessels of not over 200 cubic meters were to pa}' 12 per 
cent, clocks were to pay 25 per cent, and the other 22 items had 
specific rates, some of which are given in the table on page 519. 

In addition to the 90 per cent reduction of these rates enjoyed by 
Portuguese goods, further dift'erentials appear in that, of the 24 arti- 
cles on the free list, 11 were free only when they were of national 
origin. ^^ The chief articles free of duty, no matter from what source, 
were agricultural and industrial machines and scientific instruments, 
railway cars and rails, coal, living animals, vessels of over 200 tons, 
roofi.ng felt, ice, books, sewing machines, and glass and earthenware 
vessels used in importation. 

81 E. g., buildings of iron, or partly of iron, put together or not; timber for building, bricks and building 
stoue, vessels or parts of vessels, fishing nets and twine for nets, casks, and sacks and packing cloth. 



502 COLONIAL TAEIFF POLICIES. 

The export schedule was very simple: 

Per cent. 

Ivory and rubber to Portuguese ports 7 

Ivory and rubber to foreign ports 15 

All other goods to Portuguese ports 3 

All other goods to foreign ports 10 

These rates of the tariff of 1892 appear to have remained unchanged, 
except in so far as legislation for the colonies generally or for the 
whole province of Angola have changed them, and except the rates 
on alcoholic beverages and cotton textiles. Because of the difference 
between the rates of duty at Ambriz and those at Loanda and of the 
increasing facilities for commerce overland between these places, it 
was felt necessary to increase the duty on cotton textiles at Ambriz 
to prevent Loanda from losing all its customs receipts from cotton. 
Accordingly', by decree of August 11, 1913, the rate on cotton textiles 
was raised from an ad valorem of 10 per cent — officially declared to 
be equivalent to 75 reis per kilogram — to a specific duty of 225 reis 
per kilogram (11 cents a pound), and at the same time the rate at 
Loanda was decreased from 500 reis per kilogram to 375 reis.^^ 

(C) District of Loanda, Benguela. and Mossamedes. 

Loanda, Benguela, and Mossamedes are the three most important 
ports and apparently the only customhouses south of Ambriz in 
Angola, and they are practically always grouped in the tariff laws 
and decrees. The regulations promulgated for them often apply also 
to Ambriz, or to the whole province of Angola, including the Congo 
district. In this situation a description will be given first of the sepa- 
rate tariff of Loanda, Benguela, and Mossamedes as it existed in the 
eighties and early nineties, and then of the modifications which 
have taken place since, including those changes, specified as each is 
mentioned, which apply also to Ambriz or to the whole province. 

TAParrs before 1892. 

B}^ decree of December 22, 1881,^^ import and export tariff sched- 
ules were promulgated for these ports. Products of Portugal, and 
foreign products ^^nationalized" in Portugal, paid only 30 per cent 
of the scheduled rates, making a differential of 70 per cent; and for- 
eign goods reexported from Portugal paid only 70 per cent of the 
rates, making the differential SO per cent. (Arts. 2 and 3.) Such 
goods might arrive via customhouses of other provinces. Products 
of the other transmarine provinces, except Guinea, or goods national- 
ized in them, were also to pay only 30 per cent of the rates paid by 
foreign goods. At Loanda there was a duty of 2 per cent on reex- 
portation. In general, free transit was allowed within the province, 
the free importation of colonial products from the ports north of 
Loanda into Loanda, Benguela, and Mossamedes being specified. 
(Arts. 5-9.) The ad valorem duty was calculated on the invoice 
value plus 20 per cent. (Art. 11.) 

82 See preamble to the decree in the Diario do Governo, Aug. 11, 191o. This new rate ^\•as set for a period 
of five years unles3thetari(Ts of 1892 were revised sooner. Note that this rate was decreased at I/oanda only, 
not at Benguela and Mossamedes, and that the law of Aug. 35, 3911, fixed the duty at 400 reis throughout 
Angola for a period of live years. 

82 B. I. d. D. No. 10. Loanda, Benguela, Mossamedes, No. 1. 



PORTUGAL. 503 

Some of the 20 specific duties (39 specifications) are given in the 
table below.^* The last item included plush, building wood, and 
manufactures of precious metals at 10 per cent; toys, twine, music 
boxes, beads, hats, cutlery, pipes, boots, porcelain, paper, matches, 
hardware, glass, etc., at 25 per cent; and uniforms^ clothing, and all 
articles not specified at 20 per cent. 

The free list included agricultural and industrial machinery and 
agricultural tools, live animals, carts, coal, ice, books, fish lines and 
nets, vessels, plants and fresBT fruits, fresh and dry vegetables; and 
native salt, sugar, and brandy. The only differential treatment is in 
respect to Portuguese coin, which is admitted free from Portuguese 
ports w^hereas its entry from foreign ports is prohibited. 

The export duties established in 1881 were: On ivory, 3 per cent if 
destined to foreign and 2 per cent if to Portuguese ports; on the chief 
products of the country — rubber, wax, coffee, hides, gum, fish, 
oleaginous products — ^5 per cent if to foreign and 3 per cent if to 
Portuguese ports. Articles not listed paid no export duty. 

Between 1881 and 1892 three changes were made in the rates or clas- 
sifications of iron, including the grant of free entry for iron buildings.®^ 

TARIFF OF 1892. 

The tariff of 1892 continued the rate of 20 per cent for articles not 
specified, but expanded the lists and classifications of articles subject 
to specific duties, and in general increased the rates.^*' 

Some rates, however, were decreased, but even on these the differ- 
ential on Portuguese goods was increased, both relatively and abso- 
lutely. Portuguese goods were hereafter to pay 10 per cent instead of 
30 per cent of the rates applicable to foreign goods,^^ and foreign 
goods, except tobacco, reexported from Portugal were to pay 80 per 
cent instead of 70 per cent of said rates.^^ Thus Portuguese goods 
were to pay in the future only one-eighth as much as was paid by 
foreign goods reexported from Portugal, as compared to the three- 
sevenths which they had been paying. National goods arriving by 
way of other transmarine provinces and foreign goods nationalized in 
these provinces were to pay the 10 per cent rate; except that those 
subject elsewhere to lower duties, or no duties, were to pay the differ- 
ence when arriving in Loanda, Benguela, and Mossamedes. No 

8^ See page 519. 

85 Decree of Jan. 27, 1887; ministerial order of Nov. 17, 1887: decree of Dee. 24, 18S9. A decree of Jan. 28, 
1891, granted a 10-year monopoly for the exportation from Angola outside of the Congo district of a 
certain dyestufl', not named, but provided for the payment of the usual differential duties of 5 per cent 
and 3 per cent. 

86 From a comparison of the trade and customs statistics of Loanda for the years 1890 and 1893 the most 
striking effect of the new tariff" appears to have been the reduction of the free imports from 820,000,000 to 
416,000,000 reis though the total imports had increased by 50 percent. The statistics yield the fono%¥ing 
averages: 



Average rate on- 



1890 



1893 



Dutiable goods of foreign origin 

Dutiable goods from Portugal and Portuguese colonies . 

Total, including free im^ports 

All exports 



cr cent. 


Per cent. 


30.5 


31.3 


4.6 


5.8 


18.9 


22.6 


3.1 


3.1 



Portugal, Administracao Geral das Alfandegas. Estatistica Geral das AUandegas de Loanda, Ben- 
guella, Mcssamedes, e Ambriz nos annos de 1890 a 1894. 

s7 Alcohol, brandy, and tobacco were exceptions, the former paying 60 per cent of the foreign rate, but 
tobacco a specific rate less than 5 j^er cent of the foreign rate. This last continued the rule established in 
the general law of Dec. 1, 1887. 

88 Foreign tobacco receives no reduction of duty if reexported from Portugal. 



504 coLOiSriAL taeiff policies. 

provision was made for products of other colonies. The duty of 2 per 
cent on reexportation was made general, for all vessels and for all 
destinations outside of the province of Angola. Within the province 
transit v/as free.^"* The coasting trade between the districts of 
Loanda, Benguela, and Mossamedes was reserved for Portuguese 
vessels. Foreign vessels — entitled as they were by virtue of treaties 
and other regulations to carry portions of their cargo from port to 
port within the province — were permitted to transship cargo for 
expedition between such ports only to Portuguese vessels and with 
formalities not required of Portuguese vessels making such trans- 
shipment. ^° 

The number of tariff items was increased to 41, and the specifica- 
tions to 88. Ad valorem rates were retained only, for articles not 
specified, 20 per cent; precious metals and watches, 10 per cent; 
foreign vessels not exceeding 200 cubic meters, 12 per cent; clocks 
and mien's hats, 25 perjjent. Some of the specific rates are given in 
the table on page 519, which shows a number of increases. The free 
list is somev/hat changed, being, except for the addition of mineral 
waters, th^ same as that of Ambriz; i. e., it contained nearly a 
dozen items which were free if Portuguese but dutiable if foreign 
products. It should be noted that the differentials were for the most 
part 20 per cent ad valorem, inasmuch as most of the articles admitted 
free from. Portugal fall within the classification "articles not speci- 
fied."^i 

Further differentials appear in the industrial tax — IJ per cent on 
foreign goods as against 1 per cent on Portuguese ; and in the charge 
for transferring goods from the ship to the customhouse, 1| reis per 
kilogram as against 1 real. 

The export duties and their differentials had already been changed 
provisionally in 1891 and were confirmed by this tariff' act of 1892. 
Instead of differential duties of 2 per cent against 3 per cent and 3 
per cent against 5 per cent the rates became:®^ 

Per cent 

On ivory to Portuguese ports. 2 

On ivory to foreign ports 10 

On all other goods to Portuguese ports. 3 

On all other goods to foreign ports , 15 

These differentials have been sufficient to send most of the exporta- 
tion to Portugal. 

Since 1892 there has been no general revision of the differentials in 
force in Angola. However, the decree of November 28, 1917, 
reorganized the government of the province and granted to it greater 
powers of self-government. This decree requires that products of 
Portugal or of the colonies shall enter Angola at reduced rates, the 
reduction to be determined by the governor general with the affirma- 
tive vote of the council of government, but to be not less than 50 
per centf^ and the products of Angola are to enjoy an equal reduc- 
tion on importation into the mother country or into any other 

«9 Arts. 15 and 17. See the order of Aug. 1, 1913, ruling that salt from Ambrizette should enter free, and 
the decree of Aug. 11, 1913, pointing out that no transit duties can be charged in Angoia. 

90 Arts. 17 and 18. The decree of Aug, 18, 1881, allowing foreign ships to trade between the different trans- 
marine provinces remained in force. 

91 Small vessels are mentioned as above; foreign bricks paid 4 reis per kilogram; glassware not otherwise 
speciiied, 150 reis per kilogram; sacks, 50 reis per kilogram (24 cents per pound). 

»2 Law of Aug. 13, 1891. B. I. d. D., No. 10. Loanda, Benguela, and Mossamedes, No. 1. 

93 Reservation is made in regard to treaty obligations; i. e., no differential is allowed in the Congo district. 



PORTUGAL. 505 

colony. The preference of 20 per cent on foreign goods reexported 
from Portugal is maintained, but only when they are carried in 
national vessels.®^ 

Since 1892 few changes of importance have been made in the 
import duties except a general increase due to the war. In 1897 the 
rate on flour and cereals v/as reduced by half.^^ In 1913, when the 
duty on cottons was increased for Ambriz, it was lowered for the 
port of Loanda from 500 reis per kilogram to 375 reis. The law of 
August 15, 1914, however, reduced the rate, for a period of five years, 
for the whole province of Angola by 20 per cent. 

A Portuguese decree of Novem.ber 17, 1913, instituted for the 
province of Angola transit duties ^^ to be paid in appropriate cases 
instead of the import duties. The rates were 3 per cent for goods 
arriving by sea and leaving by land and 1 J per cent for goods arriving 
by land and leaving either by land or hj sea; but in no case to exceed 
the import duties. 

By a law of July 22, 1914, an addition of 2 per cent of the duty was 
put on all goods imported, except wines from Portugal or the Portu- 
guese colonies. This was for a special fund for the execution of 
public works. The war apparently caused no increase until Novem- 
ber, 1917, v/hen two decrees ^^ reimposed the additional duty of 1914 
and added to it for the period of the war a surtax of 10 per cent ad 
valorem on all goods imported, with the exception of a considerable 
list of foodstuffs— rice, oil, potatoes, barley, wheat flour, condensed 
milk, alimentary pastes, ham, bacon, red and white Vvdne up to 14°, 
and Portuguese cheese. 

Changes in the export duties since 1892 have been somewhat more 
im.portant. In 1901 it was decreed that cotton from Angola should 
be exempt from export duty for 15 years and that sugar from Angola 
and Mozambique should pay only one real per kilo.^^ 

A number of decrees of 1910-1914 reduced export duties, partly 
for temporary reasons, but m.ostly to stimulate the trade of the 
country. Shortly after the revolution in 1910 the duty on the ex- 
portation of fish oil from Angola to foreign ports was reduced from 
15 per cent to 7 per cent, the rate on that sent to Portugal being 
reduced only from 3 per cent to 2 per cent.^^ A decree of November 
25, 1913, applying to Angola outside of the conventional basin of the 
Congo, was based on the considerations that the economic progress 
of Angola was dependent largely on agriculture ; that from a large 
number of articles no revenue was being derived because they were 
not being exported, and that various fibers were not exported be- 
cause of the high duty. This decree provided that cereals, vege- 
tables, meats, dairy produce, and similar products of agriculture and 
animal husbandry should be exported on the payment merely of a 
statistical duty of one-tenth of one per cent if the destination were 
Portugal or of two-tenths of one per cent if to other destmations. 
Further, fibers, barks, plants, and medicinal or oil seeds or fruits, 

^ These provisioBs appear in art. 9 of the decree. See Diario do Governo, Nov. 28, 1917. This decree Is 
in execution of the law of Aug. 15, 1914. 

95 Decree of Nov. 5, 1897. B. I. d. D., 4Lh Sup. to No. 10. The reduction was from 30 reis per kilogram 
to 15 reis, and it applied also to Ambpiz. 

96 Transit duties are forbidden in the Congo district by the treaty of Berlin. 

97 Nov. 12 and 21. 

98 Decrees of Sept. 2, 1901, ibid., 8th Sup. 

99 Decree of Nov. 28, 1910, ibid., 11th Sup. 



506 COLONIAL TAEIFF POLICIES. 

except coconuts, and in general all vegetable ra,w materials not speci- 
fied in the customs schedules should be exported on payment of 3 
per cent ad valorem if sent to Portugal and 6 per cent if sent else- 
where.^ 

For fiscal reasons, increases have been made m recent years m the 
export duties. The Portuguese law of July 22, 1914, establishing 
a fund for public works imposed surtaxes of 3 per cent ad valorem 
on rubber and 1 per cent ad valorem on all other goods exported 
from Angola. By decree of November 12, 1917, ionbriz was ex- 
cepted from this surtax on rubber, and by decree of November 21, 
1917, a surtax of 3 per cent was placed on palm oil, coconut oil, and 
similar oils destmed for Portugal, with a differential increasing the 
surtax to 11 per cent v/hen the articles were for foreign destinations. 
From April to July, 1920, the duties upon coffee, hides, palm oil, and 
palm kernels were fix:ed at specific rates on a sliding scale according 
to prices, but a provincial law of July 30, 1920, returned to the system 
of ad 'valorem rates. The law was applicable throughout Angola 
except that the rates on palm kernels and palm oil were not applied 
in the Congo district. The rates are as follows for exports to foreign 
countries, exports to Portugal receiving a preference of one-half: 

Per cent. 

Coffee 24 

Palm kernels and palm oil 20 

Oleaginous seeds 20 

Hides and skins 20 

Wax 12 

Riibber. 9 

Cotton. . . , 6 

summary: tariffs of the three divisions of angola. 

In the free-trade zone there are now m force import duties of 10 
per cent, with higher duties on arms and powder. 

In Ambriz, since 1892," there has been a low tariff with a general 
rate of only 6 per cent.^ but with a differential of 90 per cent of the 
duty in favor of Portuguese products, and of 20 per cent of the duty 
in application to foreign goods reexported from Portugal; that is, 
Portuguese products pay one-tenth of the 6 per cent, and foreign 
goods reexported from Portugal pay four-fifths. These differential 
rates apply also to the products of the other colonies, excluding the 
free zone (Congo district), but including the rest of Angola. Further 
differentials appear in a free list which applies to certain Portuguese 
products while similar foreign products pay usually 6 per cent. 

1 A decree of Aug. 19, 19.U, provided for a slight reduction of the differential on coffee exported from 
Angola (outside of the conventional basin of the Congo) and for a large increase in the rate on the exporta- 
tion of iincleaned coffee. The object was to force producers to send out a better grade of coffee. The rates 
imposed were: 

Cleaned coffee to — Per cent. 

Portugal in Portuguese shins 5 

Foreign countries in Portuguese ships 9 

Foreign ports m foreign ships 11 

Foreign ports on the west coast of Africa 6 

Uncleaned coffee 25 

This decree was to have gone into effect Aug. 1, 1915, but a law of Sept. 8, 1915, postponed it until Feb. 1, 
1916, and a decree of June 23, 1916, postponed it for eight months from that date. It does not appear in 
Kelly's Customs Tariffs, 1921. The postponements v.^ere due to the difficulty of getting the proper ma- 
chinery for cleaning the coff"ee. 

2 From. 1856-1809 there were differential duties: from 1869-1892 there were import rates of 6 per cent on 
all goods, without differentials. 

3 This is lower than the rate which has been in force in the free zone (Congo district) since 1902, and is 
much lower than the rate in force in the rest of Angola. 



PORTUGAL. 507 

.1 Loanda, Benguela, and Mossamedes, since 1881, the rate of 
l':port duty for articles not specified has been 20 per cent ad valorem, 
oince 1892, when the rates were raised, many articles on which rates 
are specified have paid much higher duties. During the war there 
was introduced a general surtax of 10 per cent ad valorem. There 
are differentials both in the import and in the export duties. In 
1892 the rate of import duty to be paid by Portuguese products was 
reduced from 30 per cent of the general rate to 10 per cent, but the 
colonial governments have recently been authorized to decrease this 
differential by levying upon Portuguese products as much as 50 per 
cent of the general rate. The reduction in favor of foreign goods re- 
exported from Portugal was decreased in 1892 from 30 per cent of the 
general rate to 20 per cent. In 1917 the benefit of this reduction was 
restricted to goods shipped in Portuguese vessels. Port charges add 
further differentials, and the arrangement of the free list renders the 
differential on certain articles equal to the whole amount of the duty 
charged on the foreign product. Portuguese tobacco pays less than 
5 per cent of the rate paid by the foreign product. The small differ- 
entials of the export duties were considerably increased in 1892. 
Products destined for Portugal were to pay 3 per cent ad valorem, 
those for other destinations, 15 per cent; except ivor}^, which was to 
pay 2 per cent in the one case and 10 per cent in the other. After 
the Portuguese revolution of 1910, with the object particularly of 
stimulating trade in articles not previously exported in quantities or 
articles in which the trade was not flourishing certain lower rates and 
smaller differentials were introduced in Angola; but the war brought 
some surtaxes, e. g., that on the export of edible oils, which increased 
the differential from 15 per cent against 3 per cent to 26 per cent 
against 6 per cent, and since the war rates of 6 to 24 per cent have 
been imposed with a preference of one-half to exports to Portugal. 

PROVINCE OF MOZAMBIQUE: PORTUGUESE EAST AFRICA. 

Location and Divisions. 

The colony of Mozambique or Portuguese East Africa lies along the 
coast, astride of the Zambesi River, paralleling the island of Mada- 
gascar, with former German East Africa to the north, and Rhodesia, 
the Transvaal, and Natal to the west and south. It lies almost 
wholly within the tropical zone, but reaches at the south almost to 
latitude 27°. It embraces an area of 295,000 square miles, with a 
population of over 3,100,000. It has a coast Ime of 1,430 miles. 

For administrative purposes this territory is divided into several 
parts and has at least three tariffs. North of the Zambesi River are 
the district of Mozambique — with the ocean ports of Mozambique, 
Quelimane, and Chinde,^ and the inland river port of Tete — and the 
territories granted as a concession to the Nyassa Company. The 
territory projecting northwestward, on both sides of the- river, is 
known as Zam_besia, but it has no separate tariff system. The terri- 
tory south of the Zambesi is sometimes called Sofala, but more popu- 
larly Louren^o Marques. The name Sofala is applied at other times 

< The British have a concession of about 25 acres at Chinde. It was leased in 1891 for a period of 99 years. 
The concession remains under the sovereignty of Portugal but is exempt from aU Portuguese rates, taxes, 
and customs duty. It serves as a port of entry for British Nyasaland and portions of Khodesia. 

185766°— 22 33 



508 COLONIAL TASIFF POLICIES. 

to only a part of the district of G-asalaiid, and is found in the / 
tariff laws associated with Manica as comprehending the concession of 
the Mozambique Company; and the name Louren^o Marques is used 
usually in reference to only the chief port of the colony or its customs 
district. The port of Lourenpo Marques is situated on Delagoa Bay 
in the extreme south and is important for its transit trade with the 
Transvaal. Inhambane is another port and district south of the 
Zambesi for which there is sometimes separate legislation. It is 
designated in the ISTovissimo Manual, 1910, as ''Inhambane south of 
the River Sabi" in distinction to Mozambique and Zambesia, which 
are within the territory to which the treaties of Brussels apply. The 
River Sabi, about 60 miles north of 22° south, is used as a boundary 
for the tariff legislation relative to alcoholic beverages in execution 
of these treaties and (as would appear from the expression just quoted) 
also as a boundary of the Mozambique Company's concession, which 
also extends on the map to 22° south. The boundary of the conven- 
tional basin of the Congo comes down the Zambesi-Shire watershed 
and follows the Zambesi to the sea. The northern half of Mozambique 
therefore lies within the conventional basin; it would be subject to 
the free-trade and open-door provisions of the final act of the confer- 
ence of Berlin, had not a ''reservation" made by the Portuguese dele- 
gates at the conference excluded it therefrom. 

(A) Mozambique except Territories under Chartered Companies 

TARIFF OF 1877. 

When the British were negotiating with the Portuguese in 1882- 
1884 in regard to the recognition of the Portuguese claim to territory 
on both sides of the mouth of the Congo, they obtained the inclusion 
in the draft treaty of a provision that the tariff to be enforced in this 
territory should not exceed the rates stipulated in the tariff of Mozam- 
bique of 1877 (without the differential duties). By the tariff thus 
accepted as a model all articles were admitted free unless included 
in the 24 specifications enumerated. Textiles, except some cottons 
listed for specific duties, were to pay 10 per cent; most manufac- 
tures of metal, 6 per cent; vessels, 3, 4, or 5 per cent; and the other 
articles named were listed at low rates, as may be seen from the 
examples quoted in the general table on page 519. Export duties 
were also low — 6 per cent on ivory, 4 per cent on rubber, wax, and 
cowries, 2 per cent on gums,, skins, and hides, and 1 per cent on 
orchilla and oleaginous seeds. 

The differential in favor of the products of Portugal or Portuguese 
colonies, or of products nationalized in Portugal, was 50 per cent of 
the import duty,^ There were no differentials on exports, but the 50 
per cent differential appears also in the transit duty of 3 per cent on 
goods destined by land or river for territories north or south of the 
Portuguese possessions, or for regions beyond the confluence of the 
Zambesi and the Shire. ^ Coasting trade between the customhouses 
of the Provinces, and in some cases to other ports, was open to foreign 
vessels. 

5 Decree of July 30, 1877, art. 41. B. I. d. D., No. 19, Mozambique No. 1. 

6 Art. 70. The intent of this article is not clear: it employs the term "foreign goods" and then says the 
reduced duties of article 41 are applicable to these goods. By strict construction it would seem to mean 
that the differential was granted not to Portuguese products but to foreign goods nationalized in Portugal. 



PORTUGAL. 509 

In 1880 the import and export duties were increased by one-fifth, 
and general rates were imposed on all articles not enumerated, on 
imports 3 pj3r cent and on exports 1 per cent; but a free list was 
instituted similar to that of 1882 for Loanda, Benguela, and Mossam- 
edes. In 1891 tobacco rates were increased, except to Cape Delgado, 
the most northernly port; and other increases were made on alcohol, 
guns, and gunpowder in Lourenco Marques, and Inhambane.^ 

TARIFF OF 1892, 

The purpose of the tariff of 1892 was to increase the differential on 
imports from Portugal ; to raise the rates greatly on all goods in which 
the Portuguese were already competing; also, to obtain more revenue 
from alcohols, on which the higher rates of Lourenco Marques and 
Inhambane were extended to the other customhouses, while national 
winesformerly free were subjected to moderate duties.^ Cape Delgado 
and Lourenco Marques were" given separate rates, to enable goods 
imported through them to compete in the trade of the hinterland. 
None of these separate rates were higher and some were lov/er than 
those of neighboring foreign ports. ^ Portuguese products, or foreign 
products nationalized in Portugal, were to pay only 10 per cent of the 
foreign rates; and there was introduced a differential in export duties. 
Foreign goods, except tobacco ^^ reexported from Portugal paid only 
80 per cent of the duties. Distilled beverages of Portuguese origin 
or nationalized in Portugal paid 60 per cent of the usual duty. 
Products of the colonies, or goods nationalized therein, paid in Mo- 
zambique the difference in the duties applicable to the articles in 
question if the rates of Mozambique were higher than those of the 
colony of origin.^^ These differentials did not apply to the territories 
under the administration of companies^ either for imports from Portu- 
gal or the colonies or for exports thereto. ^^ q^i^Q coasting trade re- 
mained open to foreign vessels. The ad valorem duties were to be 
calculated on the value of the goods at the place of origin, but if the 
invoices did not include freight, insurance, and commission, the 
valuation was increased by 25 per cent. 

The schedule of import duties had 39 items and 87 specifications, 
and provided for the rate of 5 per cent ad valorem on all articles not 
enumerated. It contained three columns, one for Cape Delgado, one 
for Lourenco Marques, and one for the rest of the province, but only 
on cotton yarns and textiles were the rates different in all three. 
For Cape Delgado 5 per cent was the rate on everything except alco- 
holic beverages, firearms, vessels of not over 200 tons, and clocks and 
watches; on these the rates were the same in all three columns. 
Lourenco Marques had the rate of 5 per cent on 34 of the specifica- 
tions, while this rate appeared in the last column only for goods not 
specified. In this last column all the duties were specific except those 
on men's hats, foreign vessels of not over 200 tons, precious metals, 

7 Ibid., pp. 9-11. Decrees of Dee. 23, 1880, and Jan. 29, 1891, Other chancres mimport duties are referred 
to in the Pautas Vipentos, 1892, p. 159, with dates of Sept. 2, and Pec. 23, 1886. 

8 Statement by the minister of marine and colonies. Pautas Vigentes, 1892, p. 160. This tariff was 
decreed on Dec. 29, 1892, while those of Guinea, the Cape Verde Islands, Sao Thom6, and Princip^, India, 
the Conso district, Ambriz and Loanda, Benguela, and Mossamedes were decreed on Aor. 16. 

9 Ibid., p. 161. 

10 Tobacco was subject to the general law of June 1, 1887, by which Portuguese tobacco paid less than 5 
per cent of the foreien rates. 

11 B. I. d. r>.. No. 19. Mozambique, 2d ed., arts. 1 to 8. 

12 See Manlca and Sofala, p. 516. 



510 COLONIAL TAEIFF POLICIES. 

clocks and watches; i. e., tlie same articles at the same ad valorem 
rates as in the tarijff of Loanda, Benguela; and Mossamedes of the 
same year. The specific rates were, as will be seen from Xhose given 
in the table on page 519, very similar to those of Loanda, Benguela, 
and Mossamedes. According to a report of the governor of Queli- 
mane for 1907-1909, bleached cottons had been paying a duty which 
averaged 57 per cent ad valorem and colored cottons 52 per cent ad 
valorem; the average duty paid by all goods dutiable and free came 
to 19.3 per cent.^^ 

The free list contained further differentials. It was the same as 
that of Loanda, Benguela, and Mossamedes of the same year (see p. 
504), except that it omitted oxen, iron buildings, and building timber, 
and applied to pulse only if of Portuguese origin. 

Export duties were imposed in a single schedule for the three divi- 
sions of the province. The rates were increased considerably over 
those previously in force, and, with the exception of those on wax, 
shells, and hides of nondomestic animals they were increased by 
from two-thirds to nine times the previous rates, but with a maxi- 
mum ad valorem rate of 10 per cent.^^ (See table on p. 514.) 

The differential in favor of exportation to Portugal was one-half 
of the duty where the rate was not greater than 4 per cent, but one- 
fourth of the duty in case of the higher rates.^^ Keexportation was 
permitted to foreign countries on pa3"ment of 2 percent ad valorem; 
to Portugal, the colonies, and the parts of the province administered 
by privileged companies it v\'as free. (Art. 9.) 

TARIFF CHANGES, 1892-1916. 

The numerous changes made in the tariffs of Mozambique since 1892 
need not be taken up in detail, but some points should be mentioned. 
A decree of the high commissioner of Mozambique on November 1, 
1895, set forth a new schedule of duties for Lourenpo Marques, to be 
in force from January 1, 1896. In the new schedule the increases of 
rates were much more numerous than the decreases, though the rate 
on articles not specified was reduced from 5 per cent to 3 per cent; 
the number of items on the free list was decreased to 15. The dif- 
ferential items in the free list — articles free only if of Portuguese 
origin — were reduced to five, namely, fishing nets, twine for nets, 
casks, sacks, and vehicles. A new differential was introduced in 
provisions that foreign goods subject to ad valorem rates must pay 
the duty in gold, and that invoices must not be made out in Portu- 
guese currency .^^ Further changes in differentials appeared in the 
provisions of August 17, 1901^ that salt from Portuguese India should 
pay only 25 reis per decaliter in Mozambique province and that the 

13 Cited in Portugal Burao, A. de: O Distrito de Quelimane. Bol. da Soc. de Geog. de Lisbao, 1914, 
vol. 32, p. 152. 

14 The new rates were: 

Per cent. 

Ivory, cloves 10 

Rubber, rhinoceros horns and hippopotamus tusks, tortoise shells 8 

Copal, pearls, precious stones 6 

Wax, ebony, cowries and other shells 5 

Sesame, skins, gums other than copal, and native tobacco 4 

All other products 2 

16 Art. 8. The B, I. d. D. is ambiguous in its translation and inaccurate both in the text and in the table 
of rates. The table in the Pautas Vigentes, 1892, gives 1^ per cent as the rate on "all other products" from 
Portugal, though art. 8 of the law calls for a rate of one-half of 2 per cent. 

19 Later, when a payment exceeded 1,000,000 reis at least two-tliirds might be by bills of exchange in 
Mozambique, Quelimane,.and Chinde. Novissimo Manual, p. 14. 



PORTUGAL. 511 

differential export duties on groundnuts and other oleaginous seeds 
should be 4 per cent and 2 per cent instead of 2 per cent and 1 per 
cent. A week later all vessels, sail or steam, imported into the 
provinces were put on the free list, so that in so far as these were con- 
cerned the differential disappeared. By a provision of September 2, 
1901, sugar was to pay only 1 real per kilo upon exportation.^^ Dry 
fish from Mossamedes (Angola) were admitted as if the produce of 
Portugal. The rate was 2 reis per kilogram.^^ 

Special provisions regulating trade with the Transvaal appear in 
the decree of August 10, 1903, which granted free exportation of 
maize to the Transvaal, and in those of September 20, 1904, and 
November 28, 1907, which resi)ectively put export duties of £100 
each on Angora goats and ostriches and £5 each on ostrich eggs, 
and then prohibited their exportation altogether, exception being 
made in each case of the colonies to the south and west of Mozam- 
bique, where there is or may be the same duty.^® 

In 1911 and 1912 further changes in rates were made. The 
export duty on fish oil was raised to 7 per cent and that on ivory 
and on the horns and hides of the animals enumerated in the hunting 
regulations to 20 per cent.^^ The import rates on automobiles were 
reduced and the differentials abolished, ^^ and the Government was 
authorized to reduce the rate on sugar.^^ 

A law of June 20, 1912, applied the existing duties of Lourenpo 
Marques to Inhambane, including the provisions for payment of 
certain duties in gold. 

TARIFF OP 1916. 

A commission appointed in 1912 reported that the tariffs needed 
revision, especially as to the territory of Zambesia, to afford protec- 
tion to the goods of the mother country and of the colonies and to 
effect a more equal distribution of the burden of the duties. This 
led to the revision in 1916 of the tariffs of Portuguese East Africa. 

Import duties. — By this revision one schedule of rates, placed in 
the first column, applies to Louren^o Marques, Inhambane, and Mo- 
zambique, while another applies to the districts of Quelimane and 
Tete. The very important change was made of decreasing the differ- 
ential accorded to Portuguese products and foreign goods nationalized 
in Portugal ^^ from nine-tenths to one-half, with a considerable num- 
ber of exceptions. Some of these exceptions are named in the pre- 
liminary provisions (art. 17), and of them denatured alcohol imported 
south of the River Sabi and alcohol for medicinal purposes, opium, 
and saccharin are real exceptions without a differential rate. The 
others, except certain alcoholic beverages, are given in the tariff 
schedules and have differentials greater than one-half, as set forth 
below.24 Colonial salt, dry fish from Mossamedes and colonial alco- 
hol for industrial uses south of the River Sabi receive the same 

" For the favors to stigar of Mozambique on entry to Portugal, see p . 490. By order of Feb. 9, 1904 (Novis- 
simo Manual, art. 1, seel, 4). 

18 Ibid., p. 122. 

19 The other relations with British South Africa, especially in regard to transit trade, have been treated 
under the heading "Treaty limitations," on p. 487. 

«o Decrees of Apr. 28 and Mar. 23, 1911. 

*i For other reductions, see p. 495. 

" Mar. 25, 1911; July 20, 1912. 

*3 Except that foreign mineral and medicinal waters receive no rebate for nationalization. 

24 All statements as to rates, etc., are taken from the official edition of this tariff published in 1917, mth- 
out a checking up of the changes, if any, made during the year. The preliminary provisions remain 
unchanged. 



512 COLONIAL TARIFF POLICIES. 

treatment as Portuguese products. Products of the other colonies 
receive the one-haK reduction — in so far as the other colonies grant 
to the products of Mozambique the same reduction in their tariffs. 
The products of the territories of the chartered companies pay as 
foreign goods, except that their products enjoy the one-half reduc- 
tion in cases where the companies grant that reduction to the prod- 
ucts of Mozambique. ^^ Goods which have paid the duties in one of 
the customhouses under the direct administration of the State pay 
in another the differences in the rates, if the latter are higher, except 
on products of local agriculture or industry. The ad valorem duties 
are reckoned on the foreign price plus costs of transportation; if the 
latter are not given, 25 per cent is added. Foreign goods reexported 
from Portugal pay 80 per cent of the duties, except that no reduction 
is made for tobacco, alcohol and alcoholic beverages, arms, muni- 
tions of war, opium, and saccharin. (Art. 26.) Articles which have 
received drawbacks are considered foreign. (Art. 28.) In Louren^o 
Marques and Inhambane ad valorem duties on foreign goods, when 
the charge is less than 2,250 reis, are payable at current rate of ex- 
change; greater charges are payable in gold at the (normal) rate of 
4,500 reis to the pound sterling. Specific duties are paid at the cur- 
rent rates of exchange. 

The tariff of 1916 has much more extensive schedules than the 
earlier tariffs. Its import schedule has 203 items, including 38 
which are marked free in both columns. Twenty -seven items have 
differential rates other than the general one of 50 per cent in favor 
of Portuguese products. On some of these the preference is the old 
nine-tenths of the duty (i. e., actual payment of one-tenth); thus, 
olive oil, soap, common wines of 12° to 14°, and champagne wines. 
On <irdinary wine up to 12° the preference is even greater, though 
not so great as it had been previously. Other Portuguese products 
pay various fractions up to one-fourth or one-third of the foreign 
rate, among these being wines, biscuit, sugar from other parts of 
Mozambique, and in the first column (Lourenpo Marques, Mozam- 
bique, and Inhambane), boots and shoes, and in the second column 
(Quelimane and Tete), candles. Portuguese wines above 16°, and 
whisky, brandy, cognac, etc., pay two-thirds or more of the foreign 
rate. A number of articles have a preference of nine-tenths in the 
first column and of only one-half in the second column, among these 
bemg salted meats, alimentary conserves, pulse, fresh and dry 
vegetables, dry fruits, dry fish, powder, lard, and vinegar; and some 
have a preference of four-fifths in the first column and one-half in 
the second; thus, conserved fish, cheese, salt. On cottons the rates 
are : ^^ 



Cotton duties. 



Cottons raw and unbleached of national origin. 
Cottons raw and unbleached of foreign origin. . 

Dyed cottons of national origin 

Dyed cottons of foreign origin 



3 per cent 

200 reis per kilo. 

3 per cent 

400 reis per kilo . 



3 per cent. 
10 per cent. 
3 per cent. 
10 per cent. 



25 Sugar from the territory of the companies is eiven the specific rate of 20 reis per kilogram, while foreign 
sugar paj^s 80 reis. Transfer of coined money from the mother country to overseas possessions, or between 
the agencies of the Banco Nacional intramarino, is free. 

28 For other examples of the rates, see table on page 519. The predominance of the rate of 10 per cent In 
the last column of the table is not as great as might be inferred from the entries in this abridged table; in 
the complete schedule it appears as the rate on less than two-thirds of the items. 



PORTUGAL. 513 

It is difficult to say which of the two columns imposes the higher 
rates. A large number of important items have the same rate in 
both; the free lists largely correspond; but in addition to the 60 
items where the rate in column I is specific and that in column II 
ad valorem — making comparison very difficult — there are about the 
same number on which the higher of two ad valorem rates appears 
now in one column and now in the other. However, in column II 
no ad valorem rate exceeds 10 per cent, whereas in column I nearly 
a score of items have rates of 20, 25, or 30 per cent. 

Export duties, — The schedule of export duties has been extended in 
the tariff of 1916 to 35 items, but this is rather an amplification than 
a revision. Among the added items 10 are free and 2 prohibited. The 
more important items have the same rates as before the war. The 
differential in the export duty was made 50 per cent throughout, 
but was limited to goods transported in national vessels, this differ- 
ential not to be enjoyed by vessels which charge freight rates higher 
than those charged by foreign vessels. ^'^ Goods carried to foreign 
ports in national vessels are to pay 90 per cent of the scheduled 
rates. A duty is imposed on reexportation, the rate being 2 per 
cent, except on sugar, which was to pay during the period of the 
European War 7 reis per kilogram. The transshipment dues are 
increased from the previous 150 reis to 250 reis per metric ton. The 
foUowing table and certain changes of 1920 mentioned in the foot- 
note show the upward tendency of the export duties of Mozambique. 

27 Art. 25, p. 25, of 1917 edition of tarifl. 



514 



COLONIAL TAEIFF POLICIES. 

Table 4. — Export duties of Mozambique. 



Article. 



Rubber: 

Extracted by boiling 

Extracted by modern process of boiling or crush- 
ing 

Extracted by incision, impure 

Extracted by incision, pure 

Ivory (rate charged in 1911) 

Hides of nondomestic animals (1911) 

Rhinoceros horns, hippopotamus teeth, etc. (1911) . . 

Cloves 

Pepper 

Tortoise shell 

Pearls 

Cowries 

Wax 



Gum copal 

Gums, or gums other than copal 

Ebony , 

W oods other than ebony 

Native tobacco . 

Oleaginous seeds (from 1901) 

Sesame 

Coffee 

Dried fish 

Articles not otherwise specified (1880). 



Law of 1911, to encourage whaling. 

Fertilizer made of refuse of whales per cent . . 

Whale oil and whale bone i do 

Ambergris ^ do 

Mangrove bark, 2 per cent export duty plus license 

duty reis per ton . . 

Sugar reis per kilo . . 



Mozambique Province. 



Per cent. 
4 

4 
4 
4 
6 
2 



Fer cent. 

8 



1910 



Per cent. 
20 



5 5 

5 5 

6 

4 5 

1 5 

2 2 

4 4 
4 



Nyassa 
Com- 
pany. 



1907 



Per cent. 
20 



Mozam- 
bique 
Com- 
pany, 



1913 



Per cem. 



To Portugal. 



Free. 
2 
10 

500 

1 



To other desti 
nations. 



1,000 
10 



(') 



The differential, except where otherwise specified, is 50 per cent, whereas in the law of 1892 it was only 
25 per cent in the case of rates exceeding 4 per cent. By a local decree of June 26, 1920, the rates on sesame 
and other oleaginous seeds were increased and made specific, but with difTerentials which on a percentage 
basis are much smaller than before. The rates on ebony, other woods, and manufactured tobacco were 
increased to 10, 5, and 6 per cent, respectively, but the difTerential on exports to Portugal was reduced in 
each case to 1 per cent ad valorem. Maize, millet, dried vegetables, and French beans became dutiable at 
$2.25 per metric ton if sent to foreign countries and $0.45 if sent to Portugal (B, T. J., Aug. 26, 1920, p. 258). 

1 A duty of 7 per cent was imposed on fish oil, on Apr. 18, 1911, and this apparently included whale oil. 
This was superseded at least partly by the whaling law, but the latter was suspended in June, 1911, 
and may not have been revived. 

2 The Portuguese text says "ambar," but the translation ambergris rather than amber seems necessary 
in this connection. 

3 The territories of the Mozambique Company have the 2 per cent export duty on mangrove bark, and 
have a free list which includes alcohol, gold, gold and silver coin, fruit, and agricultural produce. 

The decree of June 26, 1920, which increased the rates upon 
oleaginous seeds restricted the benefit of the differential duty to 
exporters who would give bond that the product would not be 
re-exported from Portugal, i. e., the decree introduced the principle 
of the monopolization of raw materials. 

Prohibitions on importation. — In addition to those dictated by 
sanitary considerations, there are imposed in Louren^o Marques and 
Inhambane prohibitions of importation of alcohol and gun barrels; 
and in all districts of the province, of importation of machinery for 
distilling liquors, of foreign silver coins, of Portuguese copper coins 
from other than Portuguese ports, and of articles falsely marked to 
simulate Portuguese origin. Bees may be imported into Louren^o 



PORTUGAL. 515 

Marques only by special license, and honey and honeycomb only 
from South Africa. ^^ The prohibition of the exportation of angora 
goats, ostriches, and ostrich eggs is maintained, also that on copper 
money destined for PortugaP^ and that on Portuguese silver coins 
to any destination, including the territories of the Mozambique and 
Nyassa Companies. 

Further differential charges — (a) Tonnage dues. — The tonnage dues 
in force in Mozambique by decree of January 23, 1905, were 50 reis 
per ton on steamships not engaged in coasting trade, but only 20 reis 
per ton on those making regular trips between the mother country 
and the colony .^^ 

(b) Commercial and industrial contributions south of the Biver 
Sahi. — By the order of July 1, 1908, special taxes were collected in 
Louren^o Marques and Inhambane. Of these the following are the 
chief examples: 



Article. 



Brandy, cider, beer. 

Alcohol 

Wines 

Sugar, olive oil, coffee, tea, kerosene, soap, salt, candles. 



National. 



Per cent. 

12 

3 

Various. 

1 



Articles not specified ' 2 



Foreien. 



Per cent. 
15 



For purpose of these taxes, foreign goods nationalized in Portugal, 
or those receiving drawbacks on exportation, are considered as foreign. 
Those of other parts of the province, or of other provinces or of Timor 
pay as Portuguese goods.^^ 

(c) Industrial tax in Mozambique, Quelimanc, and Tete. — From 
December 13, 1905, in these districts an additional duty under this 
name has been collected at the rate of 1^ per cent ad valorem on 
foreign goods and 1 per cent on Portuguese goods or foreign goods 
nationalized in Portugal, with some exceptions. ^^ 

{d) Fishing tax in Louren^o Marques. — On fish sold loose in Lou- 
ren^o Marques when caught by foreign vessels and outside of terri- 
torial waters the tax rate is 90 reis per kilogram; for catches by 
national vessels it is only 2 reis per kilogram.^^ 

(e) Municipal taxes. — Further differentials appear in the local taxes 
of Louren^o Marques and Beira. From January 6, 1909, Louren^o 
Marques has levied a municipal tax of 25 per cent of the customs 
duty on all goods imported, except wines, tobacco, and foods. This 
obviously affords to Portuguese products the same advantage pro- 
portionately that they have in the customs duty. Tobacco, meat, 
and wine have specific duties. Those on Portuguese wines are 
restricted to ordinary red and white wines, and the rates are limited 
to one-half of those specified in the customs schedule. The present 
rates are as high as this limitation permits.^'' 

28 Decree of June 6, 1909. 

29 0rder of Apr. 10, 1894, 

30 Novissimo Manual, p. 147. 
' 31 Ibid. , pp. 151-153. 

32 Ibid., p. 156. 

33 Ibid., p. 173, citing decree of May 10, 1907. Two of the multitudinous documents required in the 
customs and navigation administration have differentia] fees. Ibid., pp. 174, 178. 

34 The limitations were imposed in 1909, when exceptions were allowed for Lourenco Marques and 
Loanda from the law of 1902, which prohibited municipal imposts on Portuguese wines. 



516 COLONIAL TARIFF POLICIES. ' f 

For Beira a decree of September 26, 1905, abolished tlie cliarge, 
imposed in 1894, of £5 on each ship arriving from a foreign port, and 
imposed a tax of 50 reis per ton on all goods transshipped in the 
port, with some exceptions, and a tax of 47 reis per ton on all goods 
landed at or embarked from the port, again with some exceptions, 
the exceptions including mining products, agricultural produce of 
Manica and Sofala, and merchandise for. or from the Pungwe and 
Buzi Rivers. 

(B) DisT"RiCT OF IVIanica and Sofala (Mozambique Company). 

For the territory of the Mozambique Company there have been 
found no tariff rates antedating 1900, though probably the matter 
was not overlooked in the decrees of February 11 and June 30, 1891, 
December 22, 1893, and May 17, 1897, referred to in later decrees. 
A decree of November 8, 1900, set the rate on coffee for these terri- 
tories at 20 per cent, and a decree of November 13, 1902, established 
an import schedule of 60 items .^^ The rates are closely similar to 
those for Louren^o Marques in 1895, though on many foodstuffs they 
are lower and on some other items higher. The rate on articles not 
specified is 10 per cent. A separate schedule of 19 items gives the 
rates on Portuguese products. Several of these items are marked 
free, chiefly such as are found on free lists previously mentioned, 
and on other articles the rate on the Portuguese produce is generally 
from one-tenth (e. g., cottons) to three-tenths (articles not specified) 
of the rate on similar foreign goods. On distilled liquors the pref- 
erence is not so much, but on one item only, alcohol of over 50°, is 
it less than one-half. The export duties were put at 2, 5, 8, and 10 
per cent, etc., very similar to those of Mozambique in 1892, and there 
was a transit duty of 3 per cent. The export duty on sugar was 1 
real per kilogram. 

The preliminary provisions of this decree stated that products of 
the transmarine provinces should pay one-haK of the rates charged 
on foreign products ^® so that the other colonies were not treated as 
favorably as was the mother country. Foreign goods reexported 
from Portugal and the colonies paid as usual 80 per cent of the 
foreign rate. Special import rates were provided for the mining dis- 
trict of Manica — 5 per cent on foreign and 2\ per cent on Portuguese 
goods, but in no case more than the foreign rate. By the decree of 
Jul}^ 23, 1913, this special treatment of the mining district of Manica 
is maintained, except for alcoholic beverages, tobacco, and cottons, 
the last of which, however, j)ay only one-half of the rates paid else- 
where in the company's territories.^' This decree grants free entry 
to products of the soil of Rhodesia provided no export duty has been 
levied on them and provided that similar products of Manica and 
Sofala enter Rhodesia free. The decree included also a new export 
schedule, according to which the rate on ivory and on various kinds 
of hides is now 20 per cent, and that on tobacco, 4 per cent; i. e., it 
brought the rates into line with changes made for the rest of Mozam- 
bique. Alcohol, gold, and silver coin; gold in bars, powder, or nug- 

35 B. I. d. D., 6tli Sup. to No. 19. 

8« Novissimo Manual, 1910, p. 9, attributes this provision to the decree of May 17, 1897, and adds "and 
vice versa." Sugar was an exception; sugar imported from the territory of the company was to pay 20 
reis per kilogram in Mozambique. Ibid., referring to decree of Sept. 2, 1901. 

87 B. I. d. D., 14th Sup. to No. 19. 



PORTUGAL. .- 517 

gets; and other mine products were already free under the schedule 
of November 23, 1902; and to these were now added livmg wild 
animals, hides of domestic animals, fresh fruit, and unenumerated 
agricultural products — coffee having been listed at a rate of 2 per 
cent. Pit coal was specifically included with mining products. 

(C) Nyassa Company's Territories. 

The only tariff which has been discovered for the Nyassa Company's 
territories is that proclaimed as in force ''provisionally" from Janu- 
ary 1, 1907. It grants to products of Portugal or of Portuguese 
origin a general differential of 3 per cent as compared with 10 per 
cent for all articles not listed. There is also a short schedule of 
about a dozen articles which provides for a differential of 50 per cent 
when no other rate is mentioned in the schedule. But since this 
schedule lists only about a dozen articles and specifies other differ- 
entials for several of them, the 50 per cent rate applies in fact only 
to cottons, tobacco, clocks and watches, salt, beer, cartridges, opium, 
kaffir hoes, and rice. On distilled liquors the Portuguese products 
pay about three-fourths of the foreign rate, on powder and arms 
only one-tenth, while the differentials on wine are the very high 
ones then in force in Mozambique.^^ Cottons are the most valuable 
import, and to that extent the 50 per cent differential is of greatest 
importance; but it is evident that the differential most generally 
applied is that on articles not specified, 3 per cent as against 10 per 
cent. Salt from Portuguese India pays only 25 reis per decaliter 
as compared with the same rate per liter on salt from other sources. 
Foreign goods reexported from Portugal or the colonies pay only 
80 per cent of the usual rate, except on alcoholic beverages. The 
free list includes agricultural and industrial tools and machines, 
scientific instruments, railroad carriages, roofing felt, steamers, ve- 
hicles, etc., and half a dozen of the 28 items are free only if national 
products. 

There is a reexport duty of 2 per cent, which is not levied on goods 
bound for Portugal or the colonies. The export duties are of the 
same general character as those of Mozambique, and are shown in the 
table on page 514. The differentials in the export duties are 50 per 
cent of those duties which are not over 4 per cent, and 75 per cent of 
such as exceed 4 per cent. This is the greatest general export differ- 
ential found in the Portuguese system. 

Summary: Tariffs of the Three Divisions of the Province of Mozambique. 

The tariff of 1877 applied to the whole territory of Portuguese East 
Africa; later, separate tariffs were legislated for different parts of the 
territory. In 1892 the main and central region had one schedule and 
the two extremities of the 1,430 miles of coast had separate and low^er 
schedules. Now the districts of Mozambique, Lourengo Marques, and 
Quelimane have one schedule of import duties, and Inhambane and 
Tete another, while the territories of the Mozambique and Nyassa 
Companies have still other schedules. The K.iver Sabi forms a 
boundary for legislation and administration in regard to alcoholic 

«8 See p. 496. 



518 COLONIAL TARIFF POLICIES. 

beverages. Export duties have always been uniform throughout the 
Province except for shght differences in the territories not under the 
direct administration of the State. 

KATES OF DUTY. 

The rates of the tariff of 1877 were low; only 24 articles were duti- 
able and few if any of the rates exceeded 10 per cent, while many 
were lower. The chief articles of export paid from 1 per cent to 6 
per cent. In 1880 there was a general increase of one-fifth in import 
rates, and 3 per cent was imposed on articles not specified and not 
included in the free list. The tariff of 1892 increased the rate on 
articles not specified to 5 per cent, and in general raised the rates 
considerably, leaving, however, low rates at Cape Delgado and Lou- 
ren^o Marques, Export rates were increased, making the rates range 
from 2 per cent to 10 per cent. Increases were made in 1895 for 
Louren^o Marques, and between that time and 1916 there were 
changes in various items, especially some increases in the export rates. 
The tariff of 1916 increased the number of items on the free list; 
made comparatively few changes in the specific duties; placed import 
duties of 3 per cent on many necessities and on raw materials, with 
duties of 10 per cent on many unessential articles; and, for Mozam- 
bique, Louren^o Marques, and Inhambane, rates ranging from 20 per 
cent to 30 per cent on a number of luxuries, including hats, cIocks, 
and carpets. The export schedule was amplified, with minor increases 
of rates. The rates in Manica and Sofala in 1902 were very similar 
to those of 1895 for Louren^o Marques, but the rate on articles not 
specified was made 10 per cent instead of 3 per cent, except for the 
mining district of Manica, where it was only 5 per cent. 

DIFFERENTIALS. 

In 1877 the tariff of Mozambique gave to Portuguese products a 
differential of 50 per cent of the low import and transit duties. By 
the law of 1892 Portuguese products were required to pay only one- 
tenth of the rates imposed on foreign goods, and foreign goods 
reexported from Portugal to Mozambique to pay 80 per cent, or 
eight- tenths of those rates; while a differential in the rates of export 
duty was granted for goods shipped to Portugal, the preferences 
being one-half when the rate of duty was 4 per cent or less, and one- 
fourth when the rate exceeded 4 per cent. In 1916 the advantage 
to Portuguese imports was reduced; the provision was continued 
that they pay one-half of the foreign rates, but there were intro- 
duced a considerable number of important exceptions. In most of 
these exceptions the preference is much more than one-half, espe- 
cially in Mozambique, Louren^o Marques, and Inhambane. The 
50 per cent differential for colonial products is made conditional on 
reciprocal treatment. 

In the tariff of 1892 there were differential rates in both the transit 
duties and the duties on reexportation. Other differential charges 
still exist in Mozambique in the tonnage dues, and in the so-called 
commercial and industrial contributions, the fishing tax, and the 
municipal taxes. The total of these taxes is sufficient to make an 
addition by no means negligible to the differential import duties. 



PORTUGAL. 



519 



0^03 






PI o 
3 






li 



h:i^ 



-• ^S. 



ft ft ftft ftftftft ft 

O O OO OOOO CO 



ft ft ft ft ft 
CO o o o o 



OOOO 



8 S 



aftc!>":" 
oo2 o 



"'."Sft'^o^- ft a^ (^^ 



OOOO 



OOOO 
OO C^IOOO 
O lO t^ CQ rH 



O O O O 

"o o o lo 

(M CO lO 1-1 



55 a; i-o 



L^ "S tf 2 



I I ^ I 



ooooo ooooo ooooo 
ft ftjftftft ftftftft ft ft ft ft ft ft 

LO LO lO lO LO LO lO LO LO LO lO lO lO to LO 



a ft 

LO LO 



0.2^2 



ISi ;tJt^° 
.^•^ : ftft 

!oo 



g g 






C3 
O 
1-5 






ft ft . ft 

o o o 



s a s 



So 



i i 



O lOOO 



888aS8S 

LO lO o r^ LO th 



ss 



C^" ft ^ ft 

^ 8 ^ 












1 T3 

■ u, • • • --! g 

S I : : : "- S 

^ csi^ fl ® -^ "3 s : ft 

&^^^H:)(n »h; S M ra O m 






520 COLONIAI. TARIFF POLICIES. 

THE CAPE YERDE ISLANDS. 

The Cape Verde Islands are a group of nine islands lying 400 miles 
off the western extremity of French West Africa. Their area is about 
1,500 square miles and they have a population of 150,000. They 
export coffee, medicinal products, and miillet to the value of several 
hundred thousand dollars annually, and pay for the millions of dollars' 
worth of imports by 'invisible'' exports. 

Tariff. 

The tariff decree of December 14. 1882, established schedules of 
duties for the Cape Verde Islands whose import rates were very 
similar to those established for Loanda, Benguela, and Mossamedes 
in the preceding year. The free list was almost the same. The rates 
on textiles were higher and the ad valorem rates were som^ewhat 
lower. The rate on articles not specified was 20 per cent. The 
export rates contained differentials, as m.ay be seen from the table 
on page 521. A tax of 15 reis per liter, to be collected at the port of 
shipment, was placed on brandy sent from one island to another of 
the group. In the preliminary articles, differentials in import duties 
were provided as follows: Portuguese products, foreign products 
nationalized in Portugal, and colonial products paid only 30 per cent 
of the rates on foreign products, and goods reexported from Portugal 
paid 70 per cent of those rates. Foreign products nationalized in 
Guinea and Ambriz were not given the benefit of this provision, pre- 
sumably because the rates there were so lov/. There was no differ- 
ential on coal. The 2 per cent reexport duty applied uniformly. 
The ad valorem^ duties were to be calculated on the invoice value 
plus 20 per cent. 

The decree of April 16, 1892, gave to Portuguese products in the 
Cape Verde Islands a preferential advantage relatively smaller than 
that given in most of the other colonies, because revenue was needed 
and a greater favoring of Portugal was not needed — the conquest of 
the market by the national products "already stood rooted in the 
commercial habits of the archipelago," ^^ Portuguese products were 
to pay 20 per cent of the foreign rates instead of the usual 10 per cent. 
Foreign goods reexported from Portugal were to pay, as in the other 
colonies, 80 per cent of the import rates. Products of the other 
colonies or goods nationalized in the colonies were to pay in the Cape 
Verde Islands the difference in the rates of import duty applicable in 
the two respectively, in case the rates in the latter were higher. 
Transshipment and the coasting trade were m^ade subject to rules 
similar to those applied in Angola; this was a repeal of the provisions 
of the law of August 18, 1881, by which foreign vessels were allowed 
to carry on trade between the islands of the group. An exceptional 
provision was that brandy when sent from one island to another was 
to pay an export duty of 20 reis per liter. 

The import schedule of 1892 contains 43 items and the rates are 
largely the same as those for Loanda, Benguela, and Mossamedes, 
concluding with 20 per cent on all goods not specified. The free list 
with its dift'erentials is the same, except for the omission of coal and 

89 Pautas Vigentes, 1892, p. 6. 



PORTUGAI.. 



521 



small vessels o The export duty on castor oil v/as doubled and that 
on coral was increased 50 per cent; that on coffee was reduced one- 
fifth. The differential of 2 per cent as against 1 per cent on articles 
not specified was left unchanged; on the articles just mentioned it 
was increased so the exports to Portugal paid one-half of the foreign 
rates instead of from three-fourths to five-sixths as formerly. 







Tariff of 1882. 


Tariff of 1892. 


Article 


Foreign Rate to 
rate. j Portugal. 


Foreign 
rate. 


Rate to 
Portugal. 


Castor oil 

Castor beans i 

Coffee 

Coral ,... 

Articles not specified 


.per decaliter.. 

per kilo.. 

do 

do.... 


Rds. Reis. 
120 100 

4 4 

5 1 4 
400 1 300 

2 per cent. 1 per cent. 


Reis. 

240 

6 

4 

600 

2 per cent. 


Reis. 

120 

3 

2 

300 

1 per cent. 





1 Decree of Feb. 17, 1887. 

The tonnage duties on steamships showed a differential of 50 per 
cent in that the rate was 9 reis per ton for vessels maintaining a 
regular service with the mother country as against 18 reis for others. ^^ 

Tliis tariff of 1892 seems to be still in force, with a few changes^ 
chiefly reductions. The rate on maize was reduced in 1901; that on 
motor cars in 1911; that on beer in 1912. This last mentioned 
reduction was from 200 and 100 reis per kilogram, respectively, on 
foreign and Portuguese beer to .100 reis and 10 reis, respectively. 
Salt was ^'provisionally" exempted from export duty in 1902. Free 
importation of material for the whaling industry and the extraction 
of whale oil was granted in 1914, but differential export duties were 
imposed on the products of the industry, the rates being the same as 
those cited in the section on Mozambique on page 514. 

SAO THOME AND PRINCIPE. 

The two islands, Sao Thome and Principe, constitute one province, 
though since 1892 the tariff provisions which apply to them have 
not been identical. They lie in the Gulf of Guinea about 125 miles 
off the coast of Kamerun and Gaboon. Although their combined 
area is less than one-thousandth part of that of Angola or Mozam- 
bicjue, they have a trade about equal to that of each of those prov- 
inces.^^ The comparatively large trade of the islands is due almost 
entirely to the plantations of Sao Thome, which until the recent 
spectacular rise of the cocoa production of the Gold Coast led the 
vforld in the production of cocoa. The imports are the usual tropical 
imports — preserved foodstuffs, including liquor and tobacco, and 
manufactured goods of all kinds, with cotton textiles leading. 

Tariff. 

The tariff decree of December 14, 1882, for this province contained 
the same preliminary provisions as that issued for the Cape Verde 
Islands on the same day, except that (1) in addition to brandy shipped 

«o Law of Nov. 24, 1892. 

<i Excluding the reexport and transit trade of Mozambique. 



522 



COLONIAL TARIFF POLICIES. 



between the islands coffee shipped from Sao Thome to Principe paid 
the export duty, and that (2) there were no duties on the transship- 
ment of coal. The rates of import duty were in general similar to 
those of the Cape Verde Islands, but there were many differences. 
The export duties on goods destined to Portuguese ports are exhibited 
below, but the rates shown for exports to foreign ports are those of the 
decree of August 13, 1891, which seem to have increased considerably 
the differentials previously in force. ^^ 

Coffee produced in Principe was exempt from export duty for 10 
3'ears. 

The tariff law of 1892, much of which is still in force, provided 
that Portuguese products entering Sao Thome pay only 10 per cent 
of the foreign rates, and that with the exception of tobacco, reexports 
from Portugal pay only 80 per cent of those rates. By an exception 
unique in the Portuguese colonial system, all Portuguese products 
and those nationalized in Portugal, save onlj^ alcohol and distilled 
liquors, enter Principe entirely free. In Sao Thome, Portuguese 
wine and beer and tobacco pay less than 5 per cent of the foreign 
rate and distilled liquors pay up to 20 per cent. Products sent from 
one of the two islands to the other were to be charged as foreign. ^^ 
The import schedule of 28 items is very similar to that of Loanda, 
Benguela, and Mossamedes of the same year, but the rate on articles 
not specified is 25 per cent instead of 20 per cent. The same differ- 
entials appear in the free list. The export duties ** introduced a new 
differential ^^ in favor of Portuguese ships. Further, the duties 
applicable to exportation to foreign ports in foreign vessels may be 
reduced 50 per cent when the freight charges for transportation in 
national vessels to Portugal exceed 8,000 reis per metric ton ($7.40 
per short ton) for coffee and 6,000 reis for cocoa. Reexports except 



^2 The colonial minister in introducing the tariffs of 1892 referred to this decree as one intended to cure 
the disastrous effects of the previous regime of sliglit differentials upon the Portuguese marine and upon 
the commerce of the mother country. Coffee and cocoa suffered most, because of the French surtaxes 
on indirect importation, and the result was beginning to be seen in the increase of French and the decrease 
of Portuguese shipping. The direct communications with France were beginning to affect the sale of 
Portuguese wines, a perceptible foreign competition having grown up. The rninister concluded by saying 
that the national industry was now given tHe greatest possible protection compatible with local condi- 
tion. (Pautas Vigentes, pp. 8, 9.) 

<2 It is not clear whether the provision of the law of Aug. 13, 1881, allowing free navigation to foreign 
vessels between the ports of Sao Thom6 and Principe has been repealed. In the case of the Cape Verde 
Islands the repeal was explicit, and as the laws for both regions had been elaborated and passed at the same 
time, the repeal, not mentioning Sao Thome and Princip6, is probably not to be construed as applying to 
them. 

" Export duties of Sao Thome and Principe: 







Tariff of 1882. 


Tariff of 1892. 


Article. 




Foreign rate in- 


Rate to 
Portugal in 
Portuguese 

ships. 




rate. 


Portugal. 


Foreign 
ships. 


Portuguese 
ships. 


Coffee 

Cocoa 

Articles not specified 


per kilo.. 

do.... 


Reis. 
45 
40 

6 V. ct. 


Rcis. 
16 
14 

1 p. ct. 


Rcis. 
45 
40 

15 p. ct. 


Reis. 
30 
25 

5 p. ct. 


Reis. 

16 

12 

1 p. Ct. 







<^ This did not go into effect until June 22, 1892, i. e., until the expiration of the treaty of 1842 with Great 
Britain. On June 22, 1891, Portugal had given 1 year's notice of the termination of this treaty. (Hertslet, 
Commercial Treaties, Vol. VI, p. 598, and Vol. XIX, p. 783.) 



PORTUGAL. 523 

from one to the other of the two islands of the Province pay 2 per 
cent. All exports from Principe to Portugal were free from export 
duty, and so remained until the decree of November 21, 1916, extended 
to Principe the duties in force in Sao Thome. 

Few changes appear to have been made in this tariff of 1892. 
There need be noted only the increase of the export duties on agri- 
cultural products by 50 per cent in 1894,*^ which was suspended with 
regard to cocoa in March, 1918,-^ for the remainder of the war period; 
and the imposition of a war surtax of 3 per cent ad valorem on ail 
exports. The import duties on some cereals were reduced in 1897; 
and in 1913 lime and copper sulphate were exempted from such 
duties.*^ 

MUNICIPAL TAXES. 

There are also differential municipal taxes collected in the custom- 
houses of Sao Thome and Principe. For these taxes, foreign products 
nationalized in Portugal retain their classification as foreign. 

In Principe these municipal taxes fall on about 60 items, comprising 
the main classes of imports. Some of the rates are specific and some 
ad valorem. The specific rates impose on foreign goods charges for 
the most part two or three times as high as those levied on national 
goods, and may, perhaps, on a rough average, be said to increase the 
import by the equivalent of one-third of the customs duty. The ad 
valorem rates are chiefly 10 per cent and 15 per cent on foreign 
products, but are higher on a few items to a maximum of 30 per cent. 
On Portuguese goods the corresponding taxes are chiefly 5 per cent 
and 10 per cent, though Portuguese textiles pay only 3 per cent as 
compared with 10 per cent. However, in about one-fourth of the 
items no rate for foreign products appears, and therefore (unless the 
omission is due to there being no importation from foreign sources) 
the differential in these cases is against Portuguese goods, i. e., this 
municipal duty on the Portuguese product decreases the advantage 
enjoyed by that product in the customs charges. This decrease is in 
most cases small— e. g., a reduction of the differential from 90 per 
cent to 60-75 per cent — but in the case of salt the total of the two 
imposts leaves a net differential against the Portuguese product of 23 
reis per decaliter.^^ 

The municipal imposts of Sao Thome are quite different. The 
schedule is only one-half as extensive, all but two of the rates are 
specific, the rates are generally lower, and the differentials, though 
more varied, appear for only one-third of the items, while on the 
others the imposts fall only on the Portuguese product. 

PORTUGUESE GUINEA. 

Portuguese Guinea forms a sm.all triangle with an area of 14,000 
square miles bounded on the landward sides by French Senegal. Its 
population is about 300,000. It exports rubber, wax, oil seeds, 
ivory, and hides to the value of some $2,000,000 annually; its prin- 
cipal imports are cotton textiles, tobacco, preserved foodstuffs, and 
miscellaneous hardware. 

<8 Decree of May 17. 
<7 Decree of Mar. 18. 

<8 Decree of Nov. 5, 1897, and law of Aug. 19, 1913. 

<9 Assuming that the figures in Kelly, Customs Tariffs of the World, 1920, pp. 532-533, are correct. This 
is the only source found for these mimicipal taxes. 

185766°— 22 34 



524 COLONIAL TARIFF POLICIES. 

Tariff. 

The decree of May 24, 1877, provided for duties on liquors, weapons, 
beads, and cloth, a total of 11 items, and declared all other imports 
free. Portuguese and colonial goods imported in Portuguese ships 
paid onl^y one-half of the specified rates. Free transit to the Cape 
Verde Islands was allowed. The export duties were specific and 
without differentials.^*^ The law of October 21, 1880, which pro- 
vided for a differential tonnage duty of 25 as against 50 reis per ton 
on steamers according as they do or do not maintain regular services 
between Portugal and the colony, is apparently still in force. 

The tariff regime decreed on April 16^ 1892, was most simple — all 
imports were free except that a uniform duty of 270 reis per decaliter 
(11 cents a gallon) was imposed on all alcoholic beverages, regardless 
of kind and v/ithout differential." The absence of any differential 
in the export duties was continued, and the rate was made 10 per 
cent on all articles. The colonial minister said in introducing this 
tariff that the free system was adopted because Guinea was so small 
a territory, hemmed in by French West Africa, traversed by numerous 
waterways, and inhabited largely by untamed natives. ^^ 

Few changes have been made since 1892, aside from those affecting 
the colonies more generally and dealt with elsewhere, but these few 
changes are important relatively to the simplicity of the system. 

A decree of April 21, 1897, introduced a differential by raising the 
rate on alcoholic beverages to 450 reis per decaliter, while Portu- 
guese products were to pay only 60 per cent of this; i. e., the old 
rate.^^ At the same time a duty of 20 reis per kilogram on gun- 
powder, without differential, replaced the older storage requirement. 

A decree of October 26, 1897, reduced to 7 per cent the export 
duty on an oleaginous seed called mancarra, and that of July 12, 
1902, reduced all export duties to 7 per cent. This decree of 1902 
suppressed certain taxes and substituted for them a duty of 3 per 
cent ad valorem on all imports except liquors, tobacco, arms., and 
gunpowder.^^ 

Finally a decree of January 29, 1920, imposed a surtax on alco- 
holic beverages, increased the specific rates on tobaccos, doubled 
the general ad valorem rate, "and established a differential of 50 per 
cent in favor of national (or nationalized) products and a differential 
of 20 per cent in favor of foreign products, other than alcohol and 
tobacco, reexported from Portuguese ports in national vessels. ^'^ 

MINOR COLONIES IN ASIA AND THE PACIFIC I PORTUGUESE INDIA, 

TIMOR, MACAO. 

Portugal possesses in Asia or Asiatic waters three sm^all colonies — 
Portuguese India, Timor, and Macao. Portuguese India in turn 
consists of three distinct parts — Goa and Damao on the west coast of 

50 Palm oil, 15 reis per decaliter (0.6 ceut per gallon): wax, ivory, andgixms, 15, 20, and 5 reis per kilogram, 
respectively; leather and fine skins, 40 and 100 reis eacli: groundnuts and other oleaginous seeds, 25 reis per 
hectoliter, and increased to 40 reis by decree Nov. 3, 1880. 

51 The importation of liquors into part of the territory was prohibited, in accordance ^s-ith the priiieiple 
laid do^^Ti at the Brussels Conference of 1890. Formalitie-s were required for the importation of gunpowd'er, 
including storage in Government warehouses at 6 reis per kilogram per month. 

52 Pautas Vigentes, pp." 5, 6. • 

53 For later changes, see section on "Treatment of alcoholic beverages." 

5* The exceptions already had other rates or were now given them— arms and ammimition, 10 percent; 
gunpowder, 40 reis per kilogram; and tobacco, from 30 to 70 reis per kilogram. 

55 B. I, d. D., 8th Sup. to No. 13, 2d ed. The difCereatials are limited to the duties established by this 
decree. 



I 



PORTUGAL. 525 

India, the former south and the latter north of Bombay, and the 
island of Diu, about 140 miles west of Damao. The three together 
have a total area of less than 1,700 square miles. Macao is in south- 
ern China near Canton and is merely a landing place with an area 
of 4 square miles and a population of 75,000. These small posses- 
sions on the Indian and China coasts owe what little importance 
they have to their transit trade with the great territories beyond 
them. Portuguese Timor, the eastern portion of the island of 
Timor ^® is much the largest in area of these Asiatic possessions, yet 
ranks sm.all am^ong colonies, its area being a little over 7,300 square 
miles. It exports coffee, sandalwood, copper, and wax, to a total of 
less than $500,000 worth annually. 

(A) Portuguese India. 



After the expiration of the treaty of December 26, 1878, by which 
uniform rates of duty were applied in British India and Portuguese 
India, the governor general of the latter decreed on January 14, 
1892, a large number of changes. The decree was in force only a 
short time, but it may be mentioned that it enumerated a long list 
of manufactured goods which were to pay 14 per cent, and that it 
contained no differential duties except a special rate for Portuguese 
wine. Such a preference, and greater in amount, had already been 
in force under the treaty, but only for a limited quantity. 

The tariff of April 16, 1892, as amended December 21, 1892, and 
February 17, 1894, appears to be stiU in force with a few modifica- 
tions. It contained a schedule of som^e 200 specifications, expressed 
in terms of Indian weights and measures, but the rates were entered 
or calculated, in general, on the basis of 14 per cent ad valorem, ^^^ 
which was a large increase over the rates in force under the treaty 
with Great Britain. It contained a few ad valorem rates ranging 
from 3 per cent to 10 per cent. There were in the free list in 1892, 
47 items, and in 1894, 60 items, chiefly raw materials and tools, 
railway equipment, etc.^^^ 

The preference accorded to Portuguese products is only 50 per 
cent, except as to wine, on which the differential is five-eighths for 
ordinary wines and seventeen- twentieths for champagne wines. 
By exception, there is no preference on salt and on other alcoholic 
beverages, alcohol in perfumes, etc. 

There are export duties on a dozen items, but without differentials. 

The only changes since 1894, aside from those provided in general 
regulations which have been mentioned elsewhere, seem to be a 
prohibition of the importation of cocaine except for medicinal pur- 
poses (May 19, 1909) and a prohibition of the exportation of bird 
skins and feathers, other than ostrich (Nov. 21, 1910), to help the 
British save the Indian birds. 

58 Timor is north of Australia and west of New Guinea. 

57 Statement of the colonial minister, Pautas Vigentes, p. 12. The valuations are those of the invoice 
pins 10 per cent. ^' 

57 a There was speciallegislation for Diu, e. g.,a longer free list, which was extended by decree of Oct. 11, 
1919. This decree abolished the special fates at Diu on arms and beverages but made 5.5 per cent the 
eeneral rate for unenumerated articles. B. I. d. D., 7tb. Sup. to No. 14, 2d. ed. 



526 COLONIAL TAEIFF POLICIES. 

(B) Timor. 

TARIFF. 

By decree of January 20, 1887, Timor was given a simple schedule 
of ad valorem import duties. Six per cent was the general rate, but 
wine was to pay 5 per cent; cattle, pigs, wheat flour, and rice, 3 per 
cent; and vegetables, glass, vessels, books, etc., only 1 per cent; 
while the stronger liquors, and ivory, articles of gold, silks, tobacco, 
opium, guns, and powder were to pay from 20 |>er cent to 50 per cent. 
No differentials appeared except in the free list, which included 
Portuguese preserved m_eats and fish, sv\'eetm_eats, and common 
wine.^^ Machines and tools, coal, and fish v\^ere the chief items of the 
free list. The decree of December 1, 1887, introduced the great 
differentials on tobacco which have been mentioned elsewhere.^^ 

The decree of June 8, 1897, increased the rates considerably. 
According to this decree articles not specified and not on the compre- 
hensive free list now pay 8 per cent, textiles and salt 10 per cent; 
and the duties which previously ranged from 20 per cent to 50 per 
cent have been increased to rates ranging from 30 per cent to 90 per 
cent.^^ Decreases were not considerable in number or am^ount; a 
few^ articles formerly taxed 1 per cent were transferred to the free 
list. ~ • ^ 

Aside from the duties on tobacco and liquors, the only differential 
duties are 6 per cent on foreign alimentary preserves and 8 per cent on 
foreign sweetmeats and fruits, whereas the Portuguese products pay 
only 1 per cent; and Portuguese oil enters free, while the foreign 
pays 8 per cent. 

Since 1897 there has been no general revision of these rates. In 
1903 Portuguese mineral waters were added to the free list, and in 
1908 an additional duty was imposed on the foreign product. Special 
permits with nominal fees are required of foreigners who wish to 
visit the interior. 

Export duties have had somewhat the same history — there have 
been very simple schedules, with increases of rates from time to time, 
but the export duties are entirely without differentials. 

68 It is not clear from the material available whether this last is part of the decree of Jan. 20, 1887, for 
Timor, or of the general lavr of June 13, 1889, for the free entry of Portuguese -wine into the colonies. 

69 See p. 494. 



60 The list is as follows: 

Per 
cent. 

Portuguese preserves and pickles 1 

Scales, weighing macliines, and decimal weights 

and measures 1 

Portuguese sweetmeats and fruits 1 

Birds 3 

Mineral and effervescent waters 3 

Oxen, swine, and sheep 3 

Appurtenances and gear for ships 5 

Sailing vessels or steamers of any tonnage 1 

Furniture 5 

Flour G 

Fish, dried and salted tj 

Foreign preserves and pickles 6 

Paints and oils for painting 8 

Any other products 8 

Linen, woolen, and cotton textiles 10 

Salt 10 



Per 
cent. 
Swords, including those named "makassar"'... 20 

Silver, worked 20 

Cotton textiles, mixed v.'ith silk 25 

Foreign ^^-ines 30 

Gold, worked in plates, bars 30 

ivory 30 

Alcohol 30 

Liquors 30 

Beer 30 

Silk 50 

Precious stones 50 

Brandy. 50 

Cognac and whisky 50 

Gin 59 

Rifles , guns 80 

Gunpowder ^ .'V-'. V^ 

Opium : J::^-^ 



The list given of articles free of duty includes practically all other items that would figure in the trade 
of these colonies. 



PORTUGAL. 



527 



Table 6. — Export duties. 
[In reis per picul. i] 



Article. 


Jan. 20, 

1887. 


Sept. 27, 
1894. 


June 8, 
1897. 


Nov. 18, 
1913. 


Coffee . . . . 


800 

1,200 

240 

100 

5 p. ct. 


1,600 

1,600 

640 

320 

5 p. ct. 


2,520 


2,520 
10 p. ct. 
10 p. ct. 
10 p. ct. 
10 p ct 


Wax 


Sandalwood 








AH other products 2. . ....... ... 











1 The pical =62 kilograms = 136 pounds. 100 reis per picul= nearly 8 cents per 100 pounds. 

2 Except that minerals continue under the decree of Sept. 20, 1906. (See p. 494.) 

(C) Macao. 



On account of the" opening of several Chinese ports to vessels of 
all nations, Macao was declared, in 1845, a free port. However, a 
list was composed subjecting 17 items to a duty of 20 per cent on 
importation, unless brought from Portugal m Portuguese vessels. 
The list included arms, clothing, salt, wines, and liquors. There 
were provisions for warehousing and reexportation on payment 
of 1 per cent.^^ 

Jurisdiction over Macao was disputed between Portugal and China 
until 1888, in which year China recognized PortugaPs full sover- 
eignty. 

Neither the Bulletin International des Douanes nor the Pautas das 
Aifandegas do Ultramar, corrected to July, 1906, shows any duties 
for Macao. ^^ 

By treaty of June 14, 1913, between Portugal and Great Britain,*^^ 
the holder of the opium monopoly in Macao was not to be permitted 
to import annually more than 260 chests ^^ for consumption and 240 ^^ 
chests for export. 

Commerce between Macao and Timor, and between these and the 
other Portuguese colonies, can be carried on in foreign vessels under 
the same conditions as those which govern national vessels. ^"^ The 
tonnage dues imposed for Macao on January 19, 1887, are 100 times 
as high on vessels carrying emigrants as on others. 



Bibliography.^^ 

[See also the general works listed on p. 835 and the texts of treaties listed on p. 834.] 
OFFICIAL WORKS AND TEXTS OF TARIFFS. 

Pauta Geral das Aifandegas do Contineiite de Portugal e Ilhas Adjacentes. Nova 
edifao official. Lisbon, 1865. 

61 Tito de Carvalho, Les Colonies Portugaises, p. 38. 

62 The British Board of Trade Journal in 1908 referred to certain duties as previously existing and to others 
as having been imposed in 1906. This j ournal states that by decree of January 19, 190i:'., to be in effect from 
July 1, of that year, the monopolies of fish and salt are abolished; that fish, salt, and pork are to be free of 
import duties, but that other charges are to be le\ied— 2 per cent on fish, 50 reis per head on live swine, 
and on salt either a landing duty of 2 reis per kilogram, or, if the salt be intended for the preservation of 
fish,,a statistical duty of one-half real per kilo. 

6?;|Iertslet's Commercial Treaties, vol. 27, p. 1018. 
6* ;a. chest=40 balls of raw opium. 

Si But the governor of Macao might license a larger importation for export "provided that proof is given 
that the said imports are destined to meet the requirements of lawful trade." 

66 Decree of Oct. 21. 1880. 

67 Pauta, schedule; geral, general; aifandegas, customs; ilhas, islands; vigentes, in force; ultramarinas, 
overseas; direitos, duties; sahida, export; tratados, treaties; aduaneira, customs. 



528 COLONIAL TARIFF POLICIES. 

Ministerio dos Xegocios da Marinlia e Ultramar. Pautas Vigentes nas Alfandegas das 
ProAdncias Ultramarinas Portuguezas, 1892. This gives the tariffs of the differ- 
ent colonies, together ^ith 500 pages of explanations, reports of commissions, etc. 

Nova Tabella das Sobretaxas aos Direitos de Exporta^ao e das Prohibicoes de Sahida 
de Mercadorias. July, 1916. A small pamphlet by the Commercio do Porto. 

The Polycommercial . Pautas, Tratados, Convenyoes e Modus-Mvendi das Alfandegas 
do Continente e Ilhas Adjacentes. 2d ed. Aug. 1913. 

Direc^ao Geral Ultramar. Pauta das Alfandegas do Ultramar. July, 1906. This is 
pages 131-164 of some larger publication. 

Diaiio do Governo. The official bulletin of the Portuguese Government. 

Marino Andrade de Fonseca, Director of Customs at Chinde. Novissime Manual de 
Legislafao Aduaneira da Provincia de Mozambique. 1910. 368 pages. Lou- 
ren^o Marques, 1910. 

Pautas das Alfandegas com as respectivas Instrucgoes Preliminares approvadas por 
Portaria ProA^ncial No. 93, de 13 de Maio de 1916. Official edition, Louren^o 
Marques, 1916. Another edition with corrections to July, 1916, is found in the 
Boletim das Alfandegas for Julv, 1916, and there is another official edition in 
1917. 

Ministerio da Marinha e Ultramar. Regime do Alcool nas Pro"\4ncias Ultramarinas. 
Lisbon, 1903. Disposifoes que regulam a Pesquisa e Lavre de Minas nas 
possessoes ultramarinas. (Decree of Sept. 20, 1906.) Lisbon, 1906. 

Ministerio das Colonias. 

Breve Relatorio acerca das Pro videncias tomadas e diplomas promulo-ados . ( Feb . 9 

to Dec. 2, 1914.) Lisbon, 1913. Chiefly a list of titles. 
Colecgao dos decretos promulgados em Virtude da faculdade concedida pelo 
artigo 87 da Constituigao, no anno de 1913. Lisbon, 1913. Decrees of July- 
November, while the Congress was not in session. 
Colecgao dos decretos, etc., much as above, for 1915 and another for 1916, but 
none appears available for 1914. 

Great Britain, Parliamentajy Papers, Cd. 3531, 1883. 

A dministra^ao geral das Alfandegas. Estatistica Geral das Alfandegas de Loan da, 
Benguella, Mossamedes, e Ambriz nos annos de 1890 a 1894. Lisbon, 1896. 

GENERAL WORKS. 

Constitution de Portugal, 1911. Translated into French by Paul EiTera. Revue du 

Droit public et'de la Science politique, 1911, Xo. 4. 
Marnoco e Souza, Jose Ferreira. 

Constituigao Politica da E^publica Portuguesa. Lisbon, 1912. 
Direito Publico. Poderea do Estado. Sua organizagao segundo a sciencia 
politica e o direito const! tucional portugues. Coimbra, 1910. 
Morisseaux, Charles. La Compagnie a Charte de Mozambique. Reprinted from the 

Revue Eccnomique Internationale, April, 1906. Brussels. 
Carvalho, Antonio Pedro de. As Pautas das Alfandegas das Pro\T.ncias Lltramarinas, 

Lisbon, 1870. 
Carvalho, Tito de. Les colonies portugaises au point de vue commercial. Paris and 

Lisbon, 1900. 
The Delao:oa Dii'ectorv, 19th vear, Lourengo Marques, 1917. 
Keller, A.^G. Colonization. "Boston, 1908. 

Seignobos, Charles. History of Medieval and Modern Civilization. Xew York, 1907. 
Zimmermann, A. Die Europaischen Kolonien. Leipzig, 1905. 
Young, George. Portugal, an Historical Study. London, 1917. 
Lichnowskv- Karl Max, Furst von. Mv ^fission in London, 1912-1914. London, 

1918: 
Portugal Durao, A. de. O Distiito de Quelimane. Bol. da Soc. de Geo2:. de Lisboa, 

1914. 
Great Britain, Geographical Section of the Xaval Intelligence Division, Xaval Staff, 

Admiralty Manual of Portuguese East Africa. 1920. 
Great Britain, Foreign Office, Peace Handbooks, Vol. XIX. Nos. 115-121; Vol. 
XIII, Nos. 79-81. 1920. 



Chapter X. 

COLONIAL TARIFF POLICY OF SPAIN. 



CONTENTS. 



Page. 

I. Introduction: 

The Spanish colonial empire- 
History..... 530 

Present extent 531 

Area and population- 
Table 1 532 

Situation and commercial importance 532 
Table 2.— Trade of the Spanish 
possessions and dependencies. . 533 

II . Government of the colonies and making of 

tariffs 534 

Finance , 535 

III. Colonial tariff policy and system: 

Earlier Spanish colonial tariff policy 535 

Table 3 .— E arly tariffs of Cuba and the 

Philippines 536 

Treaty limitations 538 

Present policy- 
Preferential tariffs without imiform- 

ity .. = ,„.................... 539 

Present system- 
Preferences to Spanish trade in co- 
lonial import tariffs 540 

Preferences to Spanish trade in 

colonial export duties 540 

Preferences in Spain to colonial 

products. 540 

Intercolonial preferences 541 

Preferences to Spanish shipping 541 

IV. Tariffs of the colonies in di\i dually: 
The Canary Islands- 
Situation and commerce- 
Location , area, and population . . . 542 
Government and making of tar- 
iffs 542 

Production and industry . — ... 542 

Trade....... 543 

Table 4.— Exports from the 
Canary Islands, 1913 and 

1914.."' 543 

Table 5. — Principal imports 
into the Canary Islands, 

1913..... 544 

Table 6. — Exports from Spain 

to the Canary Islands, 1913 . 544 
Table 7.— Trade of the Canary 
Islands, by countries, 1913 

andl914 545 

Tariff policy relating to the Canary 
Islands — 

Import duties 546 

Tabular statement: Import 
tariff of the Canary Islands. 546 
The "consumes" and the "cabii- 

do" 547 

Export duties 548 

Concealed preferences 548 

Table 8.— Imports of dutia- 
ble articles and of certain 
free articles from Spain 
and from foreign countries, 

1912 548 

E Sects of the open preferences — 549 
Preferences in Spain to products of 

the Canary Islands 549 

Tabular statement: Products of 
the Canary Islands admitted free 
in Spain, with the minimum 
duty levied on foreign prod- 
ucts 550 

Intercolonial preference. 550 



Page. 
IV. Tariffs of the colonies individually — Con. 
Melilla and Ceuta— 

Location, population, and govern- 
ment 550 

Commerce 551 

Table 9.— Commerce of Mehlla, 

1913 and 1914 „ 552 

Table 10.— Commerce of Ceuta, 

1913 and 1914 552 

Table 11.— Imports into Melilla, 

1913 553 

Table 12.— Exports from Melilla, 

1913-.......... 553 

Table 13— Imports into Ceuta,1913 554 
Table 14.— Exports from Ceuta, 

1913 = ........ 554 

Free ports .,..,,. 554 

Treatment of products of these terri- 
tories in Spain. 556 

Spanish Guinea- 
Location, area, and population 556 

Table 15.— Area and population. 556 

Government 556 

Development of the colony 557 

Commerce. 557 

Tradeof Spain withFemandoPo— 
Table 16.— Imports into Spain 

from Fernando Po, 1913.... 558 
Table 17r-E xports from Spain 

to Fernando Po, 1913 558 

Tariff policy relating to Spanish 
Guinea — 

Tariff of 1893 558 

Tariff of 1907— 

Preferential import duties . . . 559 
Tabular statement: Import 

duties of Spanish Guinea. . . 560 
Preferential export duties. . . . 561 
Tabular statement: Export 
duties of Spanish Guinea... 561 

Miscellaneous provisions 561 

Municipal duties 561 

Preferential treatment in Spain of 

products of Spanish Guinea 562 

Tabular statement: Preferential 
trealanent accorded by Spain to 
products of Spanish Guinea — 563 
Bio de Oro and Ifni — 

Location, area, and population 563 

Commerce of Eio de Oro 564 

Table 18: Foreign trade of Rio de 

Oro, 1914 564 

Tariff of Rio de Oro 565 

The Spanish zone of influence in Morocco — 

Location , area, and population 565 

Spanish interests in Morocco 566 

Government of the Spanish zone 567 

Commerce of the Spanish zone in 
Morocco — 
Table 19.— Commerce of Spanish 
Morocco, 1915 and 1916......... 568 

Table 20.— Imports into Spain 
from Morocco, 1913 and 1914 ... . 568 

Table 21. — Exports from Spain to 

Morocco, 1913. - .... ........ 568 

The tariff system of Morocco — 

Import duties. 569 

Export duties 569 

Preferences in Spain to products of 

the Spanish zone 569 

Bibliography 569 

529 



530 COLONIAL TARIFF POLICIES. 

I. Introduction. 

THE SPANISH COLONIAL EMPIRE. 

HISTORY. 

Within one hundred years after the discovery of America, and 
before the English or the French had made their first permanent 
settlements in North America, the Spanish conquisfadors had estab- 
lished the authority of their sovereign over Cuba and other islands of 
the West Indies, over all of Central America, over most of South 
America with the exception of Brazil, v»^hich had been taken by 
the Portuguese, and over large portions of North America. They 
had also hoisted the flag of Spain at various points in the Pacific 
Ocean. The occupation of Cuba began in 1511. Panama and 
Vera Cruz were founded in 1519; Cartagena, in 1532; Lima, in 1535; 
Santiago de Chile, in 1541; Valparaiso, in 1544: and St. Augustine 
(Florida) in 1565. The occupation of the Philippine Islands vras 
begun in 1564. 

The Spaniards were the first people of m^odern history to colonize 
seriously and on a large scale. Instead of founding ''factories" on 
the coast — or preferably on islands just off the coast — as did the 
Portuguese, they conquered and occupied the hinterland. They 
established cities, estates, missions, and mining camps. Equally 
with the Portuguese, they sought prompt material gains, but their 
methods were different. The Portuguese were commercial monopo- 
lists and carriers, middlemen between Europe and the Spice Islands. 
The Spaniards were political conquerors and rulers; incidentally 
they monopolized the commerce of their colonies, but chiefly they 
drained the gold and silver of the New World, taken from the 
natives or from the mines which they compelled the natives to work, 
directly to Spain. The cities and mountains of Mexico and Peru 
yielded them their greatest prizes, while they administered the 
fertile plains of the River Plate region only at a loss. 

Spain acquired her colonial empire, as several other powers have 
done, largely through the initiative and the ambitious activities of 
private individuals, but after the initial discoveries and conquests 
the Government asserted itself and regulated and administered 
practically everything that was not left to the direction of the 
church. Because of the differences of m.ethod, particularly the in- 
troduction of relatively large numbers of military and civil official 
personnel, priests, and settlers, the impression of the civilization of 
the mother country upon the natives of the Tropics was much deeper 
in the case of Spain than m the case of Portugal or of later colonial 
powers. Having been held in political and economic subjection, 
even after the relaxmg of the commercial system in the eighteenth 
century, the American colonies of Spaiu; given the opportunity 
through Napoleon's conquest of the mother country, declared, and 
between 1810 and 1824 attained, their independence. The islands 
of Cuba and Porto Rico, however, remained dependent and until the 
end of the nineteenth century they and the Philippines, and^^he 
Marshall, Caroline, and Ladrone Islands, constituted most of the 
Spanish colonial empire. 



SPAIN. 531 

Spain took little part in the exploration of Africa, htit she early 
acquired the Canary Islands, a group lying close to the West African 
coasto The conquest of these islands began in 1402 and proceeded 
fitfully for nearly a century. Spain's earliest claims to territory on 
the mainland of Africa date from the founding of Santa Cruz de 
Mar Pequena in 1476 and the capture of Melilla in 1490, Melilla 
became a permanent Spanish possession in 1556, and Ceuta in 1580. 

In 1778, through a treaty with Portugal, Spain received the islands 
of Fernando Po and Annobon, in the Gulf of Guinea, together with 
a right to trade on the mainland. A half century later Great Britain 
set up a court in Fernando Po, with jurisdiction in slave-trade cases. 
After a period of friction between the two countries, Spain in 1843 
reasserted her claim to the island and by means of treaties with 
native chieftains extended her influence on the coast and in neigh- 
boring islands. 

Since 1885 Spain has extended her claims in the Rio de Oro region 
and the present boundaries were fixed by agreement with France in 
1900 and 1912. The agreement of 1900 also fixed the Franco-Spanish 
boundary of Rio Muni. The Spanish zone in Morocco was recognized 
by the Franco-Spanish treaty of 1904, and by the act of Algeciras 
of 1906, and was defined in detail by the Franco-Spanish treaty of 
November 27, 1912.^ Up to the end of the nmeteenth century 
Spain considered her African possessions of little importance. But 
after the Spanish-American War, resulting in the independence of 
Cuba, the cession of Porto Rico, and the sale of the Philippme Islands, 
followed in 1899 by the sale of the Caroline, Pelew, and Marianna 
Islands to Germany, Spanish leaders turned their attention to the 
neglected colonies in Africa. The central administration of colonial 
affairs was re-formed and commissions were appointed to make in- 
vestigations of the economic possibilities of the colonies, particularly 
those in the Gulf of Guinea.^ 

PRESENT EXTENT. 

The Spanish territories outside of the mainland of Spain a.nd the 
Balearic Islands^ constitute four groups, as follows: 

(1) The Canary Islands, a group of seven islands off the west 
coast of northern Africa. 

(2) The Spanish possessions in the Gulf of Guinea, on the West 
African coast, including the district on the mainland known as Rio 
Muni, and off the coast the Fernando Po and other islands. 

(3) The Spanish zones of influence in Morocco. 

(4) The Spanish possessions in North Africa, including the dis- 
trict known as Rio de Oro, or th'e Spanish Sahara, Ifni,* the ports of 
Melilla and Ceuta, and the islands of Penon de Velez de la Gomera, 
Alhucemas, and the Chafarinas. 

Of these territories, the Canary Islands are a Province of Spain, 
rather than a colony; the city of Ceuta is, politically, a part of the 

1 The text of the treaty, in English, was published in the American Journal of International Law, vol. 7, 
Supplement, pp. 81-93; and in French, with maps, in L'Afrique Frangaise, 1912, vol. 22, Sup., pp. 444-450. 
y ^'T heresults of the investigations were published in Spain. Ministerio de Estado, Memoria Respeto41a 
Situacidn Pollticay Economica de las PosesionesEsiianolas del Africa Occidenfal en el ano 1902 (Madrid, 
1-J04), and in Rio Joan, D. Francisco del; Africa Occidental Espanola (Sahara y Guinea). (Madrid, 1915.) 

3 In the tariff laws no distinction is made between the mainland and these islands, hence, the latter will 
not be separately considered here. 

< For the status of Ifni see p. 564. 



532 



COLONIAL TARIFF POLICIES. 



Province of Cadiz ; and Melilla is included in the Province of Malaga, 
at least for some administrative purposes. 



AREA AND POPULATION, 



The area and population of the Spanish possessions and depend- 
encies are shown in the following table: 

Table 1. — Area and "population of the Spanish colonies. 



Possessions and dependencies. 



Area 
(square 
miles). 



Popula- 
tion. 



Popula- 
tion per 
square 
mile. 



Canary Islands 

Melilla and Ceuta. 

Spanish Guinea, including Fernando Po. 

Rio de Oro and Ifni 

Spanish zone in Morocco ^ , 

Total 



3,342 

2 18 

10,283 
110,165 
10, 952 



1506,414 

3 64,' 000 
4 110,000 

4 45, 000 
4 600,000 



151 

"ii' 



134, 760 I 4 1, 305, 000 



1 Estimated population as of 1917 from Statesman's Year-Book, 1919. 

2 Ceuta embraces about 9 square miles. No statement of the area of Melilla has been found, but it is very 
small", there is no space for parks, cemeteries, etc. 

3 Not including a ganison of 20,000 to 30,000 at Melilla. 

4 Figures are very doubtful. See sections on the separate colonies, pp. 556, 564, and 566, below. 

5 1, e., the Spanish zone in northern ilorocco. The existence of the (unoccupied) Spanish zone in southern 
Morocco is generally ignored, and references to the Spanish zone in Morocco refer almost invariably only 
to the northern zone. Strictly, according to the Franco-Spanish treaty of Nov 27 1912, there is only one 
Spanish zone, which consists of two territories. 

SITUATION AND COMMERCIAL IMPORTANCE. 



As may be seen from Table 1, the Spanish colonial empire, even 
including territories not strictly to be termed colonies, is relatively 
unimportant in area and in population — it is the smallest and least 
valuable among those of the colonial powers. Whatever small com- 
mercial importance it now has is derived largely from noncontiguous 
Spanish territories which are here included in the '' colonial empke" 
only because the Spanish tariff does not apply to them. Even in- 
cluding these territories, the trade of the Spanish colonies exceeds 
that only of the Italian colonies; and the latter seem to have the 
greater potentiality. Spain's only possession of considerable area, 
as colonies go, is the ''Spanish Sahara," 100,000 square miles of 
desert, whose chief exportable product is, curiously enough, fish. 

The Canary Islands, situated off the coast of Africa, are advanta- 
geously located both as to climate and as to shipping routes. These 
islands lie in such latitude that their vegetables are ready to com- 
mand the high prices of the early spring market and they are near 
enough to Europe to benefi.t by prompt and inexpensive transporta- 
tion. All vessels from Europe to western and southern Africa and 
eastern South America must pass near their ports; their shipping 
facilities are excellent and their coaling business is important. The 
sea gives them an equable temperature, and various other advantages 
conibine to make their tourist trade important. The population of 
150 to the square mile is composed largely of hard-v/orking Spanish, 
peasants; the original inhabitants have long since disappeared or 
have been absorbed. These advantages, together with the rich soil, 
have given the islands a relatively large foreign trade — in 1913 



SPAI]^. 



533 



apparently over $50 per head. This high figure is due to the con- 
dition frequently found in tropical or semitropical colonies, that 
the population devotes itself to producing a few exportable products 
and imports almost everything which it consumes. The Canary 
Islands import sugar, tobacco, cereals, and meats which they could 
easily produce, as well as a great variety of manufactured articles. 

The cities of Melilla and Ceuta are also treated as parts of Spain 
rather than as colonial possessions. They lie near the opposite ends 
of the Mediterranean coast of Morocco and owe their importance 
largely to their situation as ports for the hinterland. In recent years, 
however, their trade has been due largely to governmental expendi- 
tures for military and other purposes. Their areas include no agri- 
cultural land and they are almost without industrial enterprise. 
Fishing is an important industry at Ceuta but com^merce is the only 
support of Melilla. If there is an important future for either, it is 
closely connected with the development of Morocco. The Spanish 
zone, however, with which these cities are in immediate contact, is 
only a small part of Morocco and as yet has been only partially occu- 
pied by the Spaniards. The greater part of Morocco is in the French 
zone and the French have been, even during the War, energetically 
building railroads and developing the country both from the east and 
from the west so that if at some future date the trade of the eastern 
part of French Morocco goes through Melilla it will do so only after 
having been diverted from established channels. The Spanish zone 
has some agricultural possibilities but it is largely m_ountainous and 
dry; at the best most of it can be used only for grazing. Small areas 
can be irrigated. It produces chiefly animal products, cereals, fruits, 
and nuts. The mineral resources are said to be considerable, but 
only three or four mines in the neighborhood of Melilla are now in 
operation. Narrow-gauge rail lines extend inland from Melilla and 
Ceuta for short distances. 

Of the Spanish colonies proper, Rio de Oro or the Spanish Sahara 
has already been mentioned. ' Rio Muni is neghgibie in its present 
state of development, though it has possibilities. Fernando Po alone 
has any commercial significance. Cocoa is its chief product, although 
coffee and other tropical products are grown and some wood is 
exported. 

Table 2 gives the value of the imports and exports of the Spanish 
possessions and dependencies in 1913 or in other recent years. 

Table 2. — Trade of the Spanish possessions and dependencies. 
[In thousands of pesetas. i] 



Possessions and dependencies. 



Canary Islands (1913) 

Melilla (1913) 

Ceuta (1913) 

Chafarinas, Alhucemas, Penonde la Gomera (1914) 

Spanish Guinea (1913) 

Rio de Oro (1914) 

Spahlsh Morocco C1916) 

Total 



Imports. 



56, 721 
25,803 

(?) 

5,080 

119 

20, 845 



Exports. 



19,475 
5,307 
1,481 
(?) 
6,831 
123 
2,800 



207,447 36,017 243,498 



Total 
trade. 



118,354 
62, 028 
27,284 
32 
11,911 
242 
23,645 



The peseta = $0,193 at normal exchange. 



534 COLOXIAL TAP.IFF POLICIES. 

The strildng fact disclosed by the figures is the excess of imports 
over exports. This feature is usually present during the development 
of young colonies. It is due to the investment of capital and to the 
payment of the costs of government and military operations by the 
mother country rather than by revenues raised^ locally. Such ex- 
penditures account in the main for the excess of imports in Melilla, 
Cent a, and the Spanish zone of Morocco. In the Canary Islands, 
however, the explanation lies in the 'invisible exports'^ involved in 
the tourist trade, in the coaling of passing ships, and perhaps in the 
methods of fixing valuations for statistical purposes. This excess of 
imports is not seen in Kio de Oro which is not being developed, nor in 
Fernando Po whose development has advanced to a stage where it 
yields large returns. 

II. GOVERXMEXT OF THE CoLOXIES AND MaEIXG OF TaEIFFS. 

The Spanish colonial possessions have a diver-sity of relations to 
the Kingdom, and their governments differ accordingly. The 
Canary Islands are a Province of Spain, with representation in the 
vSenate and Chamber of Deputies and with the usual provincial officers. 
MefiUa and Ceuta Hkev.4se are parts of the Spanish Provinces of 
Malaga and CacUz, respectively. The Spanish zone in Morocco is a 
sphere of influence, with diplomatic rather than constitutional rela- 
tions with the Spanish governmxent. Of the colonies proper, Rio de 
Oro is administered by a subgovernor under the governor of the 
Canary Islands, but it is not clear to what extent it is to be considered 
part of the Province; its tariff legislation, at least, differs from that of 
the Canary Islands. The Spanish territories of the Gulf of Guinea 
are governed under a royai decree of July 11, 1904.^ According to 
this decree there is a governor at Santa Isabel on Fernando Po, there 
are subgovernors for the districts of Bata and Elobey, and there is a 
''delegate" for Annobon. The governor has extensive powers, 
enumerated under 14 heads, but he remains under the continuous 
control of the minister of foreign affairs. He can not act without hav- 
ing consulted his council — Junta de Autoridades — composed of the 
chief officials and officers of the colonial administration together with 
the highest naval and the highest military officer _ present. The 
governor's power is especially limited with regard to finance; he can 
do little more than draw up a prefiminary plan for the budget. 

The central authority for the colonies is the colonial section of the 
department of foreign affairs, which acts on the responsibilit}" of the 
minister of foreign affairs. The council of ministers, of course, may 
be consulted at any time on colonial questions; and since September 
16, 1908, a special colonial council has been provided to give advice 
on such questions as may be submitted to it by the minister of foreign 
affairs. This council consists of 5 officials ex officio and 10 other mem- 
bers nominated by the minister. Nine of the first set of nominees 
weTQ members of Ihe legislative chambers. As it has no continuous 
functions assigned to it this council is normall}^ inactive.^ The tariffs 
of the Spanish possessions are laid down chiefly by the executive. 
The Spanish Cortes votes the general tariff laws for imports into'aM 

6 Gaceta de Madrid, July 12, 1904. 

fi Mori, Angiolo: I Corpi Consultivi deirAmministrazione Coloniale negli Stati d'Europe, Rome, 1912, 
pp. 322-330. 



SPAIN. 535 

exports from the Kingdom, but even these laws are frequently 
modified by royal decrees. The free importation of products of the 
Canaries, Melilla, and Ceuta, in so far as it is allowed, is by legisla- 
tive authority. Likewise the articles dutiable in the Canary Islands 
and the rates thereon have been determined and altered by law, but 
more frequently changes of rates have been made by decree, and it 
was by a decree that the differential rate on sugar was introduced in 
September, 1914. The import and export tariffs of the colonies 
proper are regularly imposed by royal decree. The tariffs of the 
Spanish zone of influence in Morocco had already been determined 
by treaty before the special position of Spain in that territory was 
recognized. 

FINANCE. 

The unsatisfactory condition of both colonial and national finances 
in recent years has prevented the undertaking of ambitious schemes 
of colonial development. The colonies are not self-supporting. 
The budgets of 1915 and 1917, for example, show subventions from 
the Spanish treasury for Spanish West Africa of 1,900,000 pesetas each 
year. The income budgeted for West Africa for 1917 was 1,140,000 
pesetas — less than two-fifths of the estimated expenditure. For the 
same years the expenditures in Morocco exceeded 100,000,000 pesetas.^ 

III. Colonial Tariff Policy and System. 

EARLIER SPANISH COLONIAL TARIFF POLICY. 

Through the earlier centuries of the modern colonial period Spain 
pursued a closely monopolistic policy, as did the other European 
powers. It was a criminal offense for foreign vessels to approach 
Spanish colonial ports, and if they came, commerce with them was 
punishable by death. Spanish trade with the Americas was per- 
mitted only through the port of Seville, or later through Cadiz; 
it was confined to fleets sent annually under convoy; the fleets went 
to Porto Bello and Vera Cruz; and the trade with the west coast of 
South America was permitted only through Porto Bello and Panama. 
Supplies for Buenos Aires were forwarded overland from Lima. In 
the eighteenth century this system was gradually relaxed, largely 
because of the great success of smugglers in evading the restrictions. 
By the treaty of 1713 with Great Britain, the English South Sea 
Company was to carry 4,800 slaves annually to the Spanish colonies 
and might send annually to Porto Bello one vessel of 500 tons. In 
1740, permission was granted for ^^ register ships" to sail in the inter- 
vals between the annual departures of the fleets. In 1748, trade with 
Peru and Chile via Cape Horn was permitted. In 1774, freedom of 
trade between several of the American colonies was granted, though 
the restrictions on their production of merchandise which would 
complete with Spanish products were largely maintained. Between 
1765 and 1788 commerce with most of the colonies was thrown open 
t<p,; ^11 Spaniards and all Spanish ports. The duties collected in the 
colonies were at the same time reduced to very moderate rates, 

"> Figures from Ministerio de Instruccion Publica: Anuario Estadistico de Espana, 1916, pp. 250, 253. 
One item of expenditure is: West Sahara, 69,000 pesetas. 



536 



COLONIAL TARIFE POLICIES. 



especially in the smaller ports which had suffered under the previous 
regina^c. These smaller ports were now favored by having smaller 
import duties than those levied in th^ larger ports, namely, 1^ i>er 
cent on Spanish products and 3 per cent on foreign goods. In the 
larger ports these rates were 4 per cent and 7 per cent, respectively.^ 
In the nineteenth century the Spanish policy was little affected by 
the great free trade movement. Differential tariffs prevailed in the 
colonies, giving preferences both to Spanish products and to goods 
transported in Spanish vessels. The importation of various im- 
portant Asiatic products into the Philippine Islands was entirely 
prohibited. The general character of the tariffs of the first half of 
the nineteenth century may be illustrated by the following figures: 

Table 3. — Early tariffs of Cuba and the Philippines. 



I Spanish goods 
I imported directly— 



Imports. 



Cul^an taiiff of 1831 : 

Most articles 

A few articles 

Philippine tariff of 1837: i 

Olive oil, shoes, most wines, some clothing 

Almost all other articles 



In 

Spanish 



Duty. 

m% 

Wo 
3% 



In 
foreign 
vessels. 



Duty. 



Foreign goods 
imported — 



In 

Spanish 
vessels. 



Duty. 



14% 
18% 



8% 



40% 
7% 



icweig 



Duty. 



■21% 
27% 

50% 



In Spanish vessels— In foreign vessels 



Exports. 




Cuban tariff of 1831; 

Leaf tobacco 

Most other products. ^ 

Philippine tariff of 1837: i 

Rice ^ 

Hemp , 

other agricultural products except tobacco. 



12% 
6% 

4|% 
2% 
2% ; 3% 



1 This applied also to the ''Dependencies" of the Philippines— theCarohne, Pelew, and Marianna Islands.. 



The Cuban tariff of 1879 had the same four columns as the Philip- 
pine tariff of 1837, but the rates were specific and showed considerable 
differences in the preferences. In general, however, the rates of the 
four <;oluinns were approximately in the proportion of 1, 2, 3, and 4; 
and they were thus four times as high on foreign goods carried in 
foreign vessels as on Spanish goods in Spanish vessels. 

The Philippine tariff of 1891 and the Cuban tariff of 1892 were 
much simpler and of quite a different character. There were only 
two columns instead of thi*ee or four.® One column contained the 
rates of the general tariff and the other the slightly lower rates of 

8 For the commercial restrictions of the old Spanish svstem, see Roscher, WilheLm: The Spanish Colohial 

Svstem (translated by E. G. Bourne); and, Moses, Bernard: Establishm:ent of Spanish Rule in J^merica. 

"9 From Sept. 1, 1891, to Aug. 27, 1894. Cuba and Porto Rico had a third column for the special rates 

established in the reciprocity treaty with the United States. See U. S. Tariff Commission's Report on 

Reciprocity and Commercial Treaties, pp. 152 et seq. 



SPAIN. 537 

the conventional tariff. The intermediate preferences to Spanish 
goods carried in foreign vessels and to foreign goods carried in 
Spanish vessels were dropped/^ and the only preference was on 
Spanish goods transported directly in Spanish vessels. These latter 
entered free so far as the general tariff was concerned, but in Cuba, 
at leastj there was a ^Hemporary'' additional duty of 10 or even 15 
per cent ad valorem levied on all goods without distinction. 

The ports of the Canary Islands were made free in 1854 and Spanish 
goods received no tariff favors there until 1914; but direct trade with 
these islands was considered coastwise trade and vfas confined to 
Spanish vessels. The tariff of Fernando Po, decreed in 1893 and 
applied later to the neighboring mainland, was essentially of the 
three-column type, Spanish goods in Spanish ships were admitted 
either free, or in the case of alcoholic beverages and arms, one-fifth 
of the maximum rate. Only a dozen articles were dutiable and the 
rates ranged from 8 per cent to 100 per cent ad valorem under the 
maximum schedule. Foreign goods in Spanish vessels or Spanish 
goods in foreign vessels received reductions of from one-fifth to 
one-third, except on arms and munitions. There were similar differ- 
entials in the export duties, but the maximum rate was 8 per cent. 

Colonial products imported into Spain in the nineteenth century 
received a corresponding treatment. Fligh rates and large prefer- 
ences were the rule, with further differentials for importation in 
Spanish vessels rather than in foreign vessels or overland. Thus 
the Spanish tariff of 1849 levied^^ on each arroba of raw sugar, 2, 8, 
and 16 reales de vellon^^ on the products, respectively, of Asiatic 
possessions, of American possessions, and of foreign countries; and 
on refined sugar, 12 and 30 reales, for the colonial and the foreign 
product, respectively; and for all kinds, 8 reales additionaP^ if im- 
ported under a foreign flag. The protection to the shipping interests 
was thus 1.6 cents a pound, ^'^ to the Spanish refiners, four-fifths of a 
cent a pound against Cuban refiners; and to the colonial producers, 
1.6 cents a pound. Later the character of the protection to national 
shipping was changed and the law of 1882 established in principle 
the free admission of colonial products of the major colonies^ limit- 
ing it only by the formalities and requirements of the coasting 
trade, the chief of which was transportation in national vessels. 
This freedom, hov/ever, did not apply immediately to the chief 
colonial products; rum, sugar, cocoa, and coffee continued to pay 
specific duties at rates which decreased by one-tenth annually 
until^from July 1, 1892 — ^they disappeared.^^ Colonial products 
if imported in foreign vessels became subject to the duties of the 
second column of the tariff', i. e., the minimum rates.^^ 

10 A law of 1882 provided for the unification of the rates of the different columns by changing the others 
to those of the third column. The change was to be made by degrees through 10 years. Gaceta de Madrid, 
July 23, 1882, p. 271. 

11 Law of July 17, 1849, specifjang certain bases for the reform of the tariff (Gaceta de Madrid, July 17, 
1849) and royal decree of Oct. 5, 1849, giving the schedules. (Aranceles de Aduanas para la Peninsula ^ 
Islas Baleares, 2d ed., Madrid, 1849.) 

12 Eight reales per arroba (25 pounds) equalled 18.78 francs per quintal, i. e., the real de vellon was worth 
about 5 cents. 

13 Exeept on raw sugar of foreign origin, on which the rate was only one-half of this. 

14 Except on raw sugar of foreign origin, on which the rate was only one-half of this. 

IhGt. Brit., Pari. Papers, 1882, C. 3399. New Spanish Tariff. Tobacco continued to be subject to the 
special legislation in force. lb. , p. 27. The rates on Philippine products were one-fifth of those on Cuban 
and Porto Rican products. This free entry was not allowed to become absolute; when the duties expired 
in 1892, "municipal" and "temporary" duties continued to give the domestic product protection as com- 
pared with the colonial product, e. g., on sugar 13.50 pesetas per 100 kilos. Sen. Doc. No. 277, 59th Cong., 
lstsess.,p. 1209. 

16 Board of Trade Journal, 1892, vol. 13, p. 407. 



538 COLONIAL TAEIFF POLICIES. 

As applied to the nearer and less important colonies, the prin- 
ciple of free admission of colonial products had already been recog- 
nized in theor}^, though except for the Canar}^ Islands it was little 
practiced. Most of the products of the Canary Islands, according 
to a list which has remained substantialh^ unchanged, have been 
admitted free since 1854. By article 154 of the customs ordinance 
of 1870 1^ the importation of products of the Canaries, Fernando Po 
and its dependencies, Ceuta, Melilla, Alhucemas, and the Chafarinas 
was defined as coasting trade. Accordingly it must take place in 
Spanish vessels and v/ithout touching at foreign ports, and the 
products were admitted duty free. However, there were recog- 
nized as colonial products only those articles which were specified in 
the tarifi^ law. This general provision remains in the customs regu- 
lations and applies equally to Penon de la Gomera;^^ but the tariff 
law of 1882 laid down the rule that '^the merchandise, fruits, and 
products, whatever their origin, coming from" Ceuta, Melilla, the 
Chafarinas, Alhucem.as, and Penon de la Gomera shall be dutiable as 
foreign products, except only the catch of the tunny fisheries from 
the first three. In 1892 the agricultural produce of the region ^^ of 
Melilla was added to the exception. Fernando Po and its dependen- 
cies received more consideration. The tariff of 1882 granted their 
products free entry except for the municipal and temporary duties, 
though it was not until 1892 that cocoa was definitely recognized as 
one of the products of Fernando Po.^^ In its lengthy preamble the 
royal order of March 20, 1892, states that it has now been established 
by the testimony of merchants, officials, and travelers that cocoa is 
being produced on Fernando Po and that it is unjust that this product 
shall pay duty on entry to Spain when other colonial products do 
not pay. Further, to aid the shipping connections between Fernando 
Po and Spain, all West African produce imported via Fernando Po 
was admitted into Spain, at least from 1863 to 1899, at a reduction of 
two-fifths from the rate of duty on other foreign products. 

From these evidences it may be seen that during the period in 
which her colonial empire was extensive, Spain pursued a highly 
restrictive policy — for the benefit not only of the colonial trade but 
also of Spanish shipping, though toward 1890 the polic}- of penalizing 
the importation of colonial products in foreign ships was temporarily 
abandoned. Differentials were the rule both in the import and 
export duties and in the treatment of colonial products in Spanish 
ports, and this system continued through the European free-trade 
period practically unafl'ected except for the establishment of the 
ports of the Canary Islands as free ports. 

TREATY LIMITATIONS. 

Spain has been a party to most of the general European treaties, but 
the only important limitations on her colonial tariff policy which they 
contain are found in the act of Algeciras and the other treaties relating 
to Morocco. These general European treaties have been discussed 

17 Ordenanzas Generales de la Renta de Aduanas Aprobadas por Decreto de 15 de Julio de 1870, Edic!i<M 
Oficial. This provision may antedate 1870. 

18 Manual de la Renta de Aduanas, edited by Don Jose Vila Serra, Valencia, 1910, p. 170. 
IS In Spanish, "campo". 

20 Royal order of Mar. 20, 1892, official Gaceta de Madrid, Apr. 2, 1892, p. 14. 



SPAIN. 539 

elsewhere ^^ and an account of the Moroccan treaties may be found in 
the section on colonial tariff policy of France. ^^ Here it need only 
be stated that they guarantee the open door in Morocco and limit 
the duties of the seaports to a maximum of 12 J per cent. 

Outside of Morocco the Spanish colonial tariffs are little affected 
by treaty limitations. No Spanish territory lies within the Con- 
ventional Basin of the Congo. The Brussels act of 1890 and its 
amendments ^^ restrict the sale of liquors and arms only in Rio Muni 
and Fernando Po, as the other Spanish possessions lie outside of the 
zone. Spain was also a party to the treaty of 1908 according to which 
several of the Central African powers prohibited, between February, 
1909, and February, 1913, the sale of arms in certain regions which 
included Rio Muni.^* Few of Spain's treaties with single countries, 
either commercial treaties or those defining the boundaries of colonies, 
contain provisions applicable to the present colonial tariffs. The 
treaties which guarantee most-favored-nation treatment, or in some 
cases national treatment,^^ make exception of the colonies proper as 
in the treaty of May 15, 1911, with Japan,^® or by excluding the 
coasting trade they make clear that no equality of treatment as 
betv/een foreign and Spanish trade is pledged for the colonies. 

PRESENT POLICY. 

PREFERENTIAL TARIFFS WITHOUT UNIFORMITY. 

The policy of Spain is to enforce differential tariffs in her colonies 
and to give preferences to colonial products in the home market. 
The general principle has indeed been expressed in legislation that 
colonial products shall enter .Spain free, but this principle has been 
applied only gradually in a succession of enactments which determine 
what articles shall be recognized as colonial products. In 1918 a list 
of products of Spanish Guinea which enter Spain free — a list which 
had already been extended to the other African possessions — was 
extended also to the Spanish zone in Morocco ; so that at the present 
time the uniformity of the rules applicable to imports from the 
possessions is broken only by the separate legislation for the Canary 
Islands and in reference to the coffee and cocoa of Fernando Po. 

No uniformity has as yet been introduced into the colonial tariffs. 
The general policy contemplates the free admission of Spanish goods, 
but this policy is modified in adaptation to the fiscal needs of the 
possessions. Spanish goods enter the ''free ports" — the Canary 
Islands, Melilla, and Ceuta — on payment of the usual fiscal customs 
and port dues except that Spanish sugar receives a special exemption 
in the Canaries. Treaty limitations prevent the application of 
differential rates in Morocco, though it may be noted that goods 
(whether foreign or Spanish) entering Morocco by way of Melilla pay 
a rate of only 5 per cent instead of 12^ per cent,-' Likewise the policy 
is to grant differentials in the export duties levied in the colonies, 
but this also can not be applied in Morocco, and the free ports levy 

21 See section on tariff system of the Congo Free State and the Belgian Congo, p. 85. 

22 See p. 204 ff. 

23 See p. 89, 122. 
2< See p. 120. 

^^ I. e., the treatment accorded to own nationals. 

S6 Brit, and For. State Papers, vol. 107, p. 985. This was not ratified until July 10, 1915. 

» See pp. 210, 212. 

18.j766°— 22 35 



540 COLONIAL TARIFF POLICIES. 

no export duties. The only points in which there is entire uniformity 
are that the direct trade between Spain and its possessions is reserved 
to Spanish vessels as coasting trade and that all the tariff preferences 
are granted only to merchandise transported directly and in Spanish 
vessels. 

PRESENT SYSTEM. 

PREFEREXCES TO SPANISH TRADE IX COLOXIAL IMPORT TARIFFS. 

The traditional policy of Spain has been to give preference in the 
colonial tariff rates to her ov>'n products and to Spanish shipping. 
Since 1854 and 1863, however, the ^'free ports" of the Canary 
Islands and of Melilla and Cent a have been exceptions to the rule of 
preferential treatment, and in recent years, through the loss and sale 
of her Caribbean and Pacific colonies and the acquisition of Spanish 
Morocco, where the open door must be maintained, the exceptions 
have become more important than the rule. In brief the ''open 
door'' is maintained in Morocco by treaty and in the free ports by 
policy, except for the preference accorded in the Canary Islands to 
Spanish sugar and to the cocoa and coffee of Fernando Po. In 
Fernando Po and Spanish Guinea, Spanish ^vines, textiles, shoes, 
coal, and jewelry, imported directly in Spanish ships, are free, and 
most other Spanish products imported under the same conditions 
receive preferences of from 50 to 80 per cent of the usual duty. In 
Kio de Oro all Spanish products im^ported directly in Spanish ships 
are free, but there the trade is insignificant. 

PREFEREXCES TO SPANISH TRADE IN COLONIAL EXPORT DUTIES. 

Preferential export duties in favor of shipments to Spain in Spanish 
vessels have also been a regular part of the Spanish colonial tariff 
pohcy. No export duties are levied, however, in the free ports, and 
the international situation does not allow preferences in the export 
duties of Morocco. At present, therefore, differential export duties 
are fomid only in Fernando Po and Spanish Guinea. The differential 
consists of the entire exemption from duties of products sent to Spain 
in Spanish vessels. If these producrs are shipped to Spain in foreign 
vessels, ^^ or if the destination be foreign, duties ranging roughly from 
one-haK cent a pound on nuts and woods and 1 cent a pound on cocoa 
to 3 cents a pound on rubber and 17 cents a pound on ivory are levied 
on all the exports of any importance whatever. These preferences 
are generally reinforced by the entire remission of duties or by 
important preferences in the Spanish market, 

PREFERENCES IN SPAIN TO COLONIAL PRODUCTS. 

The present Spanish tariff, like its predecessors, gives substantial 
preferences to colonial products, but always on the condition that 
the shipment be direct and in a Spanish vessel. There is, however, 
no general rule as to the amount of the preference. Free entry is 
granted to fish, vegetables, and fruit from the Canary Islands, which 
constitute about 90 per cent of the exports from the Canaries to 
Spain, and to a few other articles, including filter stones and paving- 

28 That is, indirectly, for the direct trade is reserved to Spanish vessels as coasting trade. 



SPAIN. 541 

tiles. For the other possessions, uniformity has been achieved by 
generahzing the exemptions granted to products of Spanish Guinea. 
These exemptions were extended to Kio de Oro, Mehlla, and Ceuta 
in 1912 and to the Spanish Zone of Morocco in 1918. The articles 
listed for exemption include all the chief products of the Spanish 
colonies, with but one important exception. The cocoa and coffee 
of Fernando Po receive preferences which amount to only 58 per cent 
and 25 per cent, respectively, of the rates on the foreign products, 
but as these percentages amount, respectively, to 6 cents and 3 cents a 
pound, the value of the preferences is really greater than on most 
of the products which are admitted free. There are, however, on 
many articles additional charges, spoken of as temporary and munic- 
ipal duties (similar to the French octroi de mer) which fall equally on 
foreign and on colonial products. ^^ 

Certain colonial products are further protected in the home market 
by special duties upon their importation from non-European countries 
through European ports. Petroleum and a dozen "colonial prod- 
ucts" are the articles subject to this duty. Of these articles the 
Spanish colonies are most interested in coconut and palm oils, cocoa, 
and coffee, and on these commodities the surtaxes for indirect im- 
portation are respectively, 1,50, 7.80, and 9 pesetas per hundred 
kilos. 

INTERCOLONIAL PREFERENCES. 

The older rule was that colonial products entering other colonies 
shared the preferences accorded to the mother country, and that 
foreign goods reshipped from one colony to another where the tariff 
rates were higher, paid in the latter the difference in the duties. 
Since the Spanish colonies have been reduced practically to one 
with a preferential and two with open-door regimes, the intercolonial 
trade stands on a different footing. Products of open-door colonies 
entering other colonies are treated not unnaturally, as foreign goods. 
Likewise the open-door colonies would naturally make no discrimi- 
nation in favor of other colonies, but in the tariff of the Canary 
Islands there has long been granted a substantial preference to the 
cocoa and coffee of Fernando Po. Until the alterations of 1914 this 
was one of the few and rare cases in which a colonial tariff gave a 
differential in favor of products of another colony but not of the 
mother country. The Canary Islands import some cocoa from 
other sources; also, large quantities of coffee, of which product 
Fernando Po exports only a small amount. 

PREFERENCES TO SPANISH SHIPPING. 

All the tariff preferences of the Spanish colonial system are pri- 
marily preferences to shipping and only secondarily preferences to 
national or colonial products. The direct trade between Spain and 
the Canary Islands or the colonies is not open to foreign vessels, and 
Spanish or colonial products, as the case may be, are not entitled to 
any tariff preference unless the transportation is direct and in Spanish 
vessels. ''Direct" trade does not, however, altogether exclude stops 
at foreign ports. 

29 It follows that, if the preference be calculated on the basis of the total of all the duties payable on 
importation the percentage will amount to less than the figure given in the text. See also notes on p. 562. 



542 COLONIAL TAEIFF POLICIES. 

IV. Tariffs of the Colonies Ixdiyidually. 

[Those not wishing to follow ihe detailed discussion of Spanish tariff policy as applied in the separate 
Spanish colonies should pass over pp. 542-569, inclusive. They were prepared for detailed study rather 
than for the general reader.] 

THE CANARY ISLANDS. 

SITUATION AXD COMMERCE. 

Location, area, and population, — The Canary Islands, the most 
important commercially of the Spanish colonial possessions, were 
acquired in the fifteenth centm-y. The archipelago comprises 13 
islands in ah, lying about 50 miles off the northwestern coast of 
x^irica in latitude 28° north. The principal islands are Teneriffe, 
Grand Canary, Palma. Hierro. Gomera, Lanzarote. and Fuerte- 
rentura. 

The total area of the archipelago is 3,342 square miles; its popula- 
tion according to the cerisus of 1910 was 444,016. The estimated 
population in 1918-^ was 506,414. 

Government and maMng of tariffs. — The Canary Islands form a 
Province of the Kingdom of Spain and are under a governor ap- 
pointed by the King. There is also a subgovernor, who resides in 
Eio de Oro— which is attached to the Province. The general sys- 
tem of the customs regime is prescribed by decrees or laws of 1852, 
1870, and 1900. The articles now dutiable were specified by the law 
of 1900, but the rates have been changed freely by royal decree, 
subject to the statutory limitation that the rate upon any article 
may not exceed the total customs and consumption duties in force 
in Spain. 

The "seven islands" — those named above — constitute the basis 
of local government, each having a council wliich controls schools, 
hospitals, and other local mattei^, and which fixes the rates of the 
cahildo^^ upon the articles and \\-ithin the limits authorized bylaw. 

Production and industry. — The location of the islands in a sub- 
tropical latitude gives them a mild, equable, and healtliful climate. 
Their momitainous sm^face exhibits many varieties of- vegetation, 
and the rich volcanic soil affords the basis for a profitable agiicul- 
tm^al industry. The cultivation of grapes and cochineal, for which 
the Canaries were famous in the nineteenth century, has now de- 
clined; at present the prmcipal products are fruits, particularly 
bananas, oranges, figs, dates, and pineapples; and vegetables, such 
as tomatoes, potatoes, and onions. Two crops are grown each year. 
Tobacco, sugar, and grain are also grown, but not in sufficient quan- 
tities to supply the needs of the local population. Land suitable 
for potatoes and tomatoes sefis for never less than $1,000 an acre. 
A protective duty of 6 cents a pound is not sufficient to cause 
extension of sugar groT\ang. 

The manuiacturing industries of the islands are of little account, 
but there are small factories which produce cigars and cigarettes, 
umbrellas, waterproofs, and shoes. Silk and cotton fabrics are also 
produced and there has been a revival of embroidery and linen 
drawn-work. 22 Fishing is an industry of local importance. The 

30 The Statesman's Year-Book^ 1920. 

3i Island tax, see p. 547. 

22 U. S. Consolar and Trade Reports, Apr. -June, 1914, p. 67. 



SPAIN. 



543 



catch was valued in 1916 at 3,629,000 pesetas. Shipbuilding is also 
carried on but has never reached considerable proportions. 

The American consul reported in 1916 that the trade of the islands 
had trebled in a decade.^^ 

In addition to their exportation of fruits and vegetables the islands 
have large invisible exports in catering to the extensive tourist 
trade and as the largest Atlantic coaling point south of Europe. 
'' Practically all vessels from Europe to South America, to South 
Africa, or to Australia via the Cape stop'' at Las Palmas or Santa 
Cruz de Teneriffe to refill their bunkers. In 1913 the tonnage of 
the 10,964 ships which called at Grand Canary and Teneriffe was 
nearly 26,000,000^* — i. e., greater than that which entered and cleared 
at London in the same year. 

Trade. — Fruits and ve^tables make up 80 to 90 per cent of the 
exports of the islands. Bananas are sent to Great Britain and to 
Spain; tomatoes, to Great Britain, Spain, and before the war, to 
Germany; potatoes, to Great Britain and to Cuba; onions and 
onion seed, to Cuba and the United States. Other exports and their 
destinations are as fohows: Dried and salt fish to Spain and Cuba; 
kerosene to the English colonies in Africa; barrels to Spain; thread 
lace to Cuba; cotton textiles and drawn work to Cuba; hides and 
skins to Spain, Great Britain, and France. 

The foreign trade of the Canary Islands in 1913 and 1914 is shown 
in Tables 4 to 7, inclusive. 

Table 4. — Exports from the Canary Islands, 1913 and 1914.^ 
[In thousands of pesetas.] 



Commoditv. 




Frait, fresh (chiefly bananas) b . 

Tomatoes^ 

Potatoes f> 

Onions b 

Fish, salt, smoked, or pickled '^. 

Almonds 

Petroleum, refined c 

Umbrellas and parasols 

Leather goods 

Silver coin 

Gold coin 

Copper ore '^ 

Coopers' wares <^ 

White cotton goods 

All other articles 



Total. 



10, 553 

2,017 

1,054 

429 

540 



o Figures from the Estadistica General del Comercio Exterior de Espafia. 
b Products of the Canary Islands admitted free of duty in Spain. 

c Theseitems are transit trade. Bunker coal, which is not included in the official statistics, exceeds the 
total of all other items. It is of course a reexport. 
33 Commerce Reports, Sup., May 16, 1916. 
3* Daily Consular and Trade Reports, Apr.- June, 1914, p. 67, 



544 



COLONIAL TARIFF POLICIES. 



Table 5. — Principal imports into the Canary Islands, 1913. 
[In thousands of 7)esetas.] 



Commodity. 



1913 



Maize 

T\1ieat flour 

"Wheat 

Rice, husked - 

Sweetmeats, jams, etc 

Vegetables (gi'een) 

Olive oil 

Sugar 

Coffee : 

Cocoa 

Bran 

Other feedstuffs and seeds, not other^vise specified 

Wines, liquors, etc 

Tobacco, manufactured 

Cotton piece goods 

Cotton knit goods 

Pure wool, hair, or flock- wool goods 

Silk goods 

Raw cotton and cotton waste 

Mneral and organic fertilizers 

Stearine and palmitine, manufactured 

Common soap 

Perfumery and essences 

Insecticides 

Common wood, logs, planks, etc 

Coopers' wares and packing cases 

Furniture, wooden 

Coal 1 

Lime of all kinds, cement, and puzzolana 

Paper, packing and wrapping 

Sole leather 

Leather, varnished 

Hides and skins, tanned or dressed 

Iron and steel tubes 

Iron and steel bars, not poUshed or galvanized 

Nails, hooknails, staples, and tacks 

Straw hats and caps 

Incandescent lamps with moimtings 

Toys and games, not ivory, gold, etc 

Sacks, new, imported terdporarily 2 

Sacks, other 

All other articles 

Total 



5,86i 

3,903 

1,693 

355 

3,274 

1,453 

1,241 

874 

617 

75 

491 

2,334 

3,630 

1,285 

7,955 

733 

3,425 

1,796 

400 

3,901 

1,607 

929 

616 

512 

3,431 

2,091 

1,362 

1,334 

686 

1,113 

1,081 

855 

335 

395 

353 

366 

711 

559 

348 

13, 641 

920 

20,336 



,879. 



1 Bunker coal, much of which is unloaded directly into lighters, is not included in the official statistics. 
It is easily the largest item either of imports or exports. Though the war interfered with the coaling 
business the coal imported in 1914 was valued at over 21,000,000 pesetas. U. S. Co mm erce Reports, Sup., 
May 16, 1916. 

2 This is the official figure, but it is hard to explain even if all the coal is exported in bags. Bananas are 
exported in crates and tomatoes and potatoes in cases; and yet the "sacks, new, imported temporarily 
for the reexportation of the products of the islands, " were valued in 1913 at a sum equalling two-thirds of 
the recorded total value of exports and in 1914 at a sum which exceeded that total. This officially recorded 
total does not, however, include buulcer coal. 

Table 6. — Exports from Spain to the Canary Islands, 1913. 
[In thousands of pesetas.] 



Commoditv. 



Value. 



Articles of food 

Olive oil 

Wine, red 

Rice 

Chick-peas 

Hay and other fodder 

Sardines 

Cotton, manufactures of 

Cloth, print goods 

Cloth, white goods 

Knitted goods 

Wool and manufactures thereof 

Hemp, flax, and jute and manufactures thereof. 



1,126 
480 
161 

92 
143 

51 



2,688 
■745 
607 



2,732 



4,077 



490 
173 



sPAijiT. 545 

Table 6. — Exports from Spain to the Canary Islands, 1913 — Continued. 



Commodity. 



Substances employed in agriculture, and chemical and allied industries 

Pharmaceutical products 

Perfumes and essences 

Stones, earth, minerals, etc 

Ceramic products 

Iron and steel, and manufactures 

Wood and other vegetable materials employed in industry and manufactures thereof. 

Furniture 

Animals and animal products used in agriculture and industry 

Shoe and sole leather .' 

Tamied calf skins 

Footwear, of all kinds 

Mules 



Instruments and machinery 

Paper and manufactures thereof .... 

Miscellaneous exports 

Sandals, hemp (alpargatas) 

Coral, ivory, bone, celluloid, and'jet, 



Total. 



Value. 



501 
115 



189 



444 



489 
273 
.325 
162 



851 
186 



677 



224 



155 

561 



1,544 



141 

167 

2,077 



13,018 



Table 7. — Trade of the Canary Islands by countries, 1913 and 1914. 
[In thousands of pesetas.] 



Country. 


Imports. 


Exports. 


Total trade. 


1913 


1914 


1913 


1914 


1913 


1914 


Great Britain 1 . .... 


34, 999 
15, 709 
7,968 
8,539 
3,815 
6,357 
2,041 
2,348 
2,081 
2,089 
2,981 
2,928 
1,970 
911 
3,188 
955 


34, 403 
17,459 
11,583 
6, 763 
4, 532 
4,407 
3,289 
3,069 
2,096 
3,045 
1,351 
2,481 
1,566 


9,494 

2,282 


9,366 
1,990 


44, 493 
17,991 
7,968 
11,838 
3,816 
6,535 
2, 041 
2, 652 
4,186 
2,089 
4,239 
2,978 
1,972 
911 
3,191 
1,454 


43 769 


Spain 2. .... , 


19, 449 
11 583 


Sweden . . 




3,299 

1 
178 


2,995 


9 758 


Norway . - . . 


4,532 
4 415 


Argentina 


8 

57 

274 

1,127 

15 

1,223 


Portugal . . 


3,346 
3,333 
3,223 
3,060 
2,574 
2 481 


Italy 


304 
2,105 


Cuba. . 


United States 


France 


1,258 
50 

2 


Austria-Hungarv 


Holland '. 


7 


1,573 


Morocco.. 


" 






3 

505 






All other coimtries 


3, 873 


904 

1 


4 787 






Total , 


98,879 


99, 917 


19, 475 


17,966 


118,354 


117,883 


■ 



1 Including Gibraltar. 

2 Including Ceuta, Fernando Po, Rio de Oro, and Melilla. 

The share of Spain, in the trade of the Canary Islands in 1913 was 
as follows: Imports, 15.9 per cent; exports, 11.7 per cent; total trade 
15.2 per cent. In 1914 the figures were, respectively, 17.4 per cent 
11.1 per cent, and 16.5 per cent. These figures, however, have only 
a relative degree of accuracy, for two reasons. In the first place, 
there is '^ an assumed official valuation for each commodity that never 
varies during the year and frequently remains stationary two or 
more years, while actual market values may vary 200 per cent. '^^^ 
Second, the figures give the immediate and not the real sources 
or destinations ot the merchandise. For these reasons the vol- 
ume of trade with the United States is understated in the table. 



35 U. S. Commerce Reports, Sup., Mar. 15, 1919. Exports declared for the United States in 1916 were 
ofRcially valued at less than $60,000, but by the American consular records, based on invoice values, 
they were worth over $136,000. 



546 COLONIAL TAEIFF POLICIES. 

Except in lumber and kerosene there was practically no direct trade, 
but considerable quantities of hardware and other articles entered 
through Liverpool or Hamburg. A direct trade has developed some- 
what since 1913 but even in 1917 a large proportion of the imports 
from the United States entered via Cadiz and were credited to Spain. ^* 
The United States sends to the Canary Islands chiefly lumber, kero- 
sene, and tobacco, but during the war coal and foodstuffs were added 
to the list. 

TARIFF POLICY RELATING TO THE CANARY ISLANDS. 

Import duties. — Since 1854 the Canary Islands have been ''free 
ports." Though commerce has thus in general entered them free, 
customs duties for revenue purposes have been levied on a few arti- 
cles of wide consumption and with no general preference to Spanish 
products. The articles dutiable according to the law of March 6, 
1900, are: Alcoholic beverages and tobacco; teas, coffee (and substi- 
tutes) and cocoa; sugar, molasses, and glucose; and spices and salted 
cod. In the cases of sugar, tobacco, and fish these duties protect local 
industries. The rule that no preference be given to Spanish products 
v/as broken m September, 1914, b}^ a preferential rate on a single item, 
sugar. ^^ 

The law of March 6, 1900, did not change the rates previously in 
force, but by royal decrees of 1900, 1901, and 1907 ^^ various rates 
were reduced, e. g., on alcohol and spirits, raw cocoa, chocolate, and 
spices. The rates now in force, after further changes during the war 
are as follows: 

Import tarijf of the Canary Islands. 

Pes. cts. 

Alcohol. .per hectoliter. . 62 50 

Plain spirits do 32 50 

Brandy, simple, up to 22 degrees, Cartier .do ... . 75 00 

Liquors, cognac and other made-up spirits do 130 00 

Rum and gin, up to 22 degrees, Cartier « do 100 00 

Sugar ?> .per 100 Mlos. . 25 00 

Glucose, liquid caramel, and similar products do. . . . 85 00 

Salt cod and stock fish do 24 00 

Cocoa: 

In the bean, unroasted, and cocoa shells the produce of and imported 

direct trom Fernando Po per 100 kilos. . 50 00 

From other places of origin do 65 00 

Roasted or ground, or in paste, cocoa butter do 200 00 

Coffee: 

In the bean, unroasted, the produce of, and imported direct from. Fer- , 

nando Po per 100 kilos. . 80 00 

From other places of origin do 107 00 

Roasted, ground; chicory, roasted or unroasted, and other imitations 

of coffee per 100 kilos. . 250 00 

Chocolate per kilo . . 1 00 

Juice and molasses, cane and beet root, containing more than 50 per cent of 

crystalUzable sugar per 100 kilos . . 80 00 

1 When imported from the Peninsula and Balearic Islands, or from nations with treaties actually in 
force, or enjo\T.ng the most-favored-nation treatment, except Portugal, so long as the treaty with the Nether- 
lands remains in force. 

^ Spanish sugar is free. 

36 lb. 

s7 Decree of Sept. 11. Gaceta de Madrid, Sept. 15, 1900. Several organizations had petitioned for the 
temporary free entry of Spanish sugar. The reductions to 25 pesetas per 100 kilos put the Canary Islands 
on the same footing'as Spain, where a consumption tax of that amount was levied upon local production, 
except when the product was exported. For the preference to the raw cocoa and coffee of Fernando Po, 
seep. 550. The duty on rum and gin smceMar. 20, 1900, had discriminated against countries which had not 
most-favored-nation treaties with Spain; but the important exporters of rum and gin all have such treaties 

38 Gaceta de Madrid, Aug. 20, 1907. 



sPAiisr. 547 

Pes. cts. 
Juice containing up to 50 per cent, inclusive, of crystallizable sugar, 

per 100 kilos.. 40 00 

Pepper, cinnamon, cloves, and other spices, or imitations thereof do 100 00 

Tea, and imitations thereof, also yerba-mate do 150 00 

Tobacco in the leaf: 

(a) Habana per kilo . . 1 08 

(b) Philippine. do. . . . 82 

(c) Virginia do 54 

Manufactured tobacco: 

(a) Habana do 2 17 

(b) Philippine do 1 63 

(c) Mixed do.... 1 36 

(d) Viro:ima do 1 08 

(e) Snuff do. . . . 1 08' 

(f) Verdin do. . . . 82 

TJie " consumos^' and the '^ caMldo.'^ ^^ — In addition to the customs 
duties, which are applied ecjually throughout the islands, imports 
are suhject to a number of other taxes which are not uniform but are 
collected separately for each city or island. In the past the most 
important and also the heaviest tax — heavier than the customs 
duties — has been the consumos or consumption tax, which corre- 
spoads to the French octroi de mer. This charge is for some 
articles a composite of an internal-revenue tax (whose proceeds go 
to the Spanish treasury) and a city tax, and for others it is a city 
tax alone. The cities are divided into five classes according to popu- 
lation, and the maximum taxes authorized increase with the size of 
the city. Thus cities of 5,000 population or less may levy 8 centesi- 
mos a pound on meat while those of 40,000 or more may levy as much 
as 12 centesimos, the intermediate classes being limited to 9, 10, and 
11 centesimos, respectively. Las Palmas, on the island of Grand 
Canary, which imports two-thirds of all the merchandise imported 
into the whole group, has abolished the consumos in favor of other 
taxes. In the city of Santa Cruz de Teneriffe one or both of these 
taxes fell upon nearly a hundred articles or classes of articles, at 
rates varying from about SO. 13 per ton on sawdust and peat to about 
$0.25 per kilo on table oils. InArucas most articles are taxed, but 
many at insignificant rates, e. g., a single entry of the 44 items on the 
schedule groups all cotton, linen, wool, or silk, and manufactures 
thereof, at 2 pesetas per hundred kilos. Some smaller cities lev}^ 
only on liquors, hog products, table oils, cereals, dried and canned 
vegetables, jams, and soap. 

Another tax to which goods imported from beyond the group are 
subject is the cahildo or island tax, which is levied separately by 
each of the seven large Canary Islands. In La Palma and Grand 
Canary the cabildo is 1 per cent on all imports ,^^ except that in each 
case there is a short free list including olive oil, wheat, rice, candles, 
and also a few other articles of common consumption on which the 
two lists do not agree. In Teneriffe the duties (except on alcohol) 
are all levied per metric ton (2,204 pounds), lime and cement paying 
2 pesetas, lumber 7.50 pesetas, and practically all other merchandise 
5 pesetas. 

While some of these four taxes fall upon only a few articles, and 
others are levied at very small rates, the total on certain articles is 

39 TMs description of the consumos and cabildo is based on a report by the American consul in 1917. 
«> Except that Grand Canary levies a specific duty of $0.04 (equivalent) per liter on alcoh ol. 



548 



COLONIAL TARIFF POLICIES. 



large. Thus the total charge in Santa Cruz de Teneriffe on a liter of 
alcohol is as follows : 

Equivalent of 

Customs duty ". $0. 13^ 

Consumos, internal revenue 12^ 

Consumos, city tax 04 

Cabildo 04 

Total 33i 

Export duties. — ^The export duties levied in Spain are not imposed 
in the Canary Islands. The only export duties in the islands in re- 
cent years have been a few levied for the purposes of conservation 
during the war. For instance, when in 1916 Spanish sugar was 
granted free importation into the Canary Islands, the duty previously 
imposed upon its importation (25 pesetas per hundred kilos) was 
transposed to its exportation. 

Ooncealed preferences. — The extent to which the selection of dutia- 
ble articles was and is favorable to Spanish trade interests can not 
be set forth accurately as regards figures,*^ but that the selection was 
dictated by preferential considerations is suggested by a comparison 
of the list of dutiable articles and the figures which show the origin 
of the imports for a normal year, e. g., 1912. The following figures 
mav be considered in this connection : 



Table 8. — Imports of dutiable articles and of certain free articles from Spain and from 

foreign countries, 1912} 

[In thousands of pesetas.] 



Dutiable articles. 


From 

Spain. 


■Prom 
foreign 
coun- 
tries. 


Free articles. 


From 
Spain. . 


From 
foreign 
coun- 
tries. 






• 780 

291 
63 

672 
12 
28 
46 

800 

80 

30 

1,934 






69 


Cognac and other compound 
spirits 


195 


Other wines 


1,039 

47 

2 50 

97 


228 


Beer and cider 


231 


Codfish. ... .. 


Fish, other than cod . 


7 


Sugar 




Sardines 


59 






Total 




Spices 


1 


1,233 
1,470 


594 


Tea 


Olive oil 


6 


CoSee 


a 17 
C) 
15 
5 


Wheat 


1,338 


Cocoa 


i 


Chocolate 




Tobacco 








Total 


233 


4,756 









1 Estadistica General del Comercio Exterior de Espana en 1912, Pt.n. Canarias. Comercio de Impor- 
tacion por Puertos y Paises, pp. 943 et seq. 

2 Not including 46,000 pesetas from the Spanish possessions in Africa. 

3 64 pesetas are accredited to Fernando Po. 

< Exclusive of 32,000 pesetas from Fernando Po. 

The figures show that the articles subjected to duties are imported 
almost exclusively from foreign countries and that certain other prod- 
ucts of a similar nature and almost equally fit objects for taxation 
but imported more largely from Spain are exempt from duty. The 
importance of this point may easily be exaggerated, however, for the 
dutiable articles are, with the exception of codfish, the almost uni- 
versal mainstays of revenue tariffs, and with the additional excep- 
tion of alcoholic beverages are not to any considerable extent in com- 

^1 statistics are not available to render possible a direct comparison between the amounts of duty paid 
upon imports from Spain and those on imports from foreign countries. 



sPAm, 549 

petition with Spanish products. The concealed preference really 
consists in the two unusual features, the imposition of a duty on cod 
while other fish are exempt and the exemptions from duty of wines, 
beer, and cider. If the sole object of the duty on fish had been to 
protect the local industry, other varieties than cod should have been 
included, for ail varieties compete with the local catch — which is not 
cod. Further, the figures show that the valuation of cognac and 
other compound spirits largely of Spanish origin averaged eight times 
as much per liter as that of the simple alcohols of foreign origin, but 
the duty was only two or four times as great. On the other hand, tho 
figures show no systematic classification of the duties with the object 
of favoring Spanish interests, e. g., Spain supplied none of the spark- 
ling wines which were left free. The conclusion that the preference to 
Spanish products shown in these duties was somwhat fortuitous is 
strengthened by two further considerations. There existed no obstacle 
by treaty or otherwise to granting open preferences if desired, and the 
cabildo shows no concealed preferences. 

The articles exempt from the cabildo are such as are consumed to 
large extent by persons of small incomes, the so-called necessities of 
life; hence the purpose in freeing them from taxation was doubtless 
to keep their price as low as possible.*^ One of the most important is 
olive oil, which is supplied almost wholly by Spain, but its exemption 
may be compared with the exemption of wheat, a commodity of like 
importance but imported almost entirely from foreign countries. 
The cabildo of Grand Canary Island as established in 1914 exempted 
fish, dried and imported by Spanish fishers, but this exemption has 
apparently disappeared. 

Effects of the open yrejerences. — The preferential tariff rates on cocoa 
and coffee imported directly from Fernando Po give premiums of 
about li cents and 2 J cents a pound, respectively, upon such impor- 
tation. This has no doubt been a factor in the cocoa trade, but in 
1912 less than one- third of the cocoa and practically none of 
the coffee came directly from Fernando Po. The preference of over 
3 cents a pound granted in September, 1914, to Spanish sugar was 
followed by large importations from Spain, from which there had 
previously been none. But Germany had been the chief source of 
the sugar importations and the effect of the duty is obscured by 
war conditions. The ad valorem rate of the differential was very high 
when it was imposed, but it was reduced by nearly a cent a pound in 
February, 1916,*^ and increases of costs of production and prices have 
further reduced its relative importance. 

PREFERENCES IN SPAIN TO PRODUCTS OF THE CANARY ISLANDS. 

The royal decree of 1852 which converted into free ports all the 
ports of entry of the Canary Islands enumerated 24 products of 
those islands which were to be granted exemption from customs 
duty upon importation into Spain. The list differed from that 
which has been in force since 1900 chiefly in that it named different 

42 The exemption of coal is dictated by the importance of the reexport business in bunker coal. 

43 Royal decree of Feb. 10. Gaceta de Madrid, Feb. 16, 1916. The rates established in September, 1914, 
had been 25 pesetas i)er 100 kilos on Spanish and 60 pesetas on foreign sugars. Under this decree of Feb- 
ruary, 1916, Spanish sugar entered free and foreign sugar paid 25 pesetas,!, e., the preference was reduced 
from 35 to 25 pesetas per 100 kilos. The duty on sugar imported into Spain had been reduced by decree of 
Jan. 30, 1916, from 60 pesetas to 25 pesetas per 100 kilos; that is, to the same rate as that of the internal tax. 
Before the war Spain produced a quantity of sugar about sufficient for her own consumption and she neither 
exported nor imported sugar on any large scale ; in 1916 she imported a considerable quantity . 



550 



COLONIAL TARIFF POLICIES. 



kinds of vegetables separately instead of vegetables collectively. 
The earlier list included also cereals, wine, sweetmeats, straw plaits, 
and silk. The changes made in 1900, therefore, somewhat shortened 
the list. The item fish appeared before 1900 wdthout the limitation 
that the fisherman must be of Spanish nationality. Basalt was 
added to the list in 1903 by a customs ruling. The important 
items are vegetables, fresh and dried fruit, and fresh, salted, or dried 
fish; these three classes made up in 1914, 92 per cent of the total 
exports from the islands to Spain. The full list of the products 
exempted, together Vv-ith the duties (rates of 1920 — see notes on p. 562) 
charged on the same articles when im^ported from foreign countries, 
is given in the following tabular statement : 

Products of the Canary Islands admitted free in Spain, ivith the minimum duty levied 

on foreign products. 



Products of the Canarv Islands admitted free. 



j Rate on 
I foreign 
' products. 



Vegetables per 100 kilos. 

Fresh and dried fruits do. . . 

Cochineal do. . . 

Barilla do. . . 

Orchil do... 

Natural mineral waters per hectoliter. 

Pacing tiles (loseta^): . 

Of"common clay per 100 kilos. 

Of fine clay do. . . 

Of china do. . . 

Basalt , rough and manufactui'ed do. . . 

Filter stones do. . . 

Fish , fresh . salted . and dried ^ do. . . 



Pes. 



cts. 
1 20 
120 00 



30 00 

(*) 

624 00 

U2 00 



i Rasins, figs, and dates, not for the table. 

2 Rasins, figs, and dates for table use, and all other fruits. 

s Various rates according to thickness. 

4 Not specified in the tarirf . 

5 Free from the Canary- Islands only if caught and prepared by Spaniards. 

6 Fish, fresh, or with the salt indispensable for its preservation; salt codfish and stockfish. 
' Tunny fish and sardines, fresh or with the salt indispensable for their preservation. 

IXTERCOLOXIAL PREFEREXCE. 

The Canary Islands gave no tariff preference to any Spanish 
product until 1914, but they have given since 1900 preferences to the 
cocoa and coffee of Fernando Po. The rate of the preference on 
coffee has remamed unchanged, namely, 105 pesetas per 100 kilos 
on the Fernando Po as against 140 pesetas on the foreign product. 
On cocoa the preference was at first set at the rate then in force in 
Spain — 90 pesetas per 100 kilos as against 120 — but in xlugust 
of 1900 these figures were reduced to 60 and 80 pesetas, respectively, 
and in 1907 there was a further reduction to 50 and 65 pesetas. On 
both coffee and cocoa the preference is granted only to theunroasted 
and unprepared product. 

MELILLA AXD CEUTA. 



LOCATIOX, POPULATIOX^ AXD GOYERXMEXT. 

The cities of Melilla and Cent a have been Spanish possessions for 
centuries, and administratively they are parts of Spain and not 
colonies. Though they lie on the coast of Morocco, they are poKti- 



SPAIN. 



551 



cally not a part of the Spanish zone, and none of the limitations 
imposed by treaty on that zone apply to them. In the days of the 
Barhary pirates they were valuable outposts for Spain. Associated 
with them are three small rocky islands (or groups of islets) — the 
Chafarinas, Alhucemas, and Penon de Velez de la Gomera — which 
lie along the same coast.^^ The population of these islands is only 
several hundred each, they have no customs establishments, and 
they are referred to in the customs regulations as free ports. In 
1914 their combined total trade was 32,000 pesetas.*^ They require 
no further mention. 

Meliila is situated near the eastern extremity of the Spanish zone 
of Morocco, while Ceuta is opposite Gibraltar, just east of the nar- 
rowest part of the Strait of Gibraltar. The populations of the two 
towns are, respectively, 40,000 and 24,000.^® A decree of December 
13, 1918, gave to Meliila, except for some special features, the status 
of a Spanish municipality, whose organization is prescribed by law. 
It had previously been governed by a special Junta de Arbitrios, half 
civil and half military .^^ 



COMMERCE. 



Meliila and Ceuta have become increasingly important as entrepdts 
for European goods destined for the interior of the Moorish Empire. 
But the military operations in the region of Meliila which began in 
1909 checked this trade with the interior, and the trade does not seem 
to have increased in quantity since 1914. The growth of the civil 
population of the city from less than 10,000 in 1907 to nearly 37,000 
in 1915 and the growth of the imports from 15,800 tons to 106,200 
tons in the same period were due largely to the increasing of the gar- 
rison from 4,600 to 31,000 men; and imports fell off one-third in 1917 
with the reduction of the garrison to 20,000. The export trade has 
increased rapidly since 1913 owing to the development of lead and 
iron mines; in 1918 ores accounted for 272,000 tons out of a total 
exportation of 282,000. ^» 

Meliila, while far behind Casablanca, is the second port of Morocco. 
Ceuta and Tangier have only about one-half of its commerce. In 
all these places the import trade vastly exceeds the export trade in 
value. 



« The Charfarinas , or Zaferine , Islands are 27 miles east of Meliila , at the extreme eastern end of the Span- 
ish zone; Alhucemas is 53 miles west and Penon de Velez 80 miles west of Meliila. Alhucemas was occupied 
in 1673 and the Chafarinas in 1848. 

45 Briones Ferrero, Gabriel: Espafia, Datos Geograficos y Estadisticos, Madrid, [1918?], pp. 441-443. 

46 The penal colonies formerly maintained in these ports have now been abandoned. 

47 L'Afrique Frangaise, 1918, p. 443; 1919, Sup., p. 31. 

48 See J. Goulven's description of the region of Meliila, in L'Afrique Francaise, 1920, Sup. pp. 25-36. 
He gives a table which is reproduced here in even hundreds: 



Year. 


Imports. 


Exports. 


Population. 


Civil. 


Garrison. 


1907 


Tons. 

15,800 

51,300 

104,500 

128, 800 

106,200 

68,600 

65,600 


Tons. 

1,100 

800 

1,500 

8, .500 

96,000 

213.000 

282,500 


9,800 
20,000 
23,300 
29, 700 
36,700 
37,300 
40, 100 


4,600 


1909 


21,000 


1911 : 


27,000 


1913 


30,000 


1915 


31,000 


1917 


20,000 


1918.. . 


17,700 







552 



COLOIs^IAL TAEIFF POLICIES. 



The foreign trade of tlie ports, by countries^ for the years 1913 and 
1914, is shown in Tables 9 to 13, inclusive. ^^ 

Table 9. — Commerce of Melilla, 1913 and 1914. 
[In thousands of pesetas.] 



Country. 


Imports. 


Exports. 


Total trade. 


1913 


1914 


1 
1913 1914 


1 1913 


1914 


Spain 1 


12,497 

12:324 

8.575 

6,941 

2,088 

2,052 

1.615 

563 

345 

278 


23,818 
6,565 
7.16& 
3,808 
1,227 
1,440 


3,030 1,484 

453 1 223 

13 1 15 

18 i 12 
! 15 


15,527 
! 12, 777 
' 8,588 
! 6.959 
' 2; 088 
! 2.061 
1 1,942 
; 596 
■ 345 
! 511 
i 10,634 


25,302 


France . 


6,789 




7,182 


Algeria . 


3,821 


Belgium 


1,242 




9 9 
327 ' 


1,449 


Morocco 




Italy 




33 ! 












Great Britain 




235 




\11 others 


9.445 


2.77S 


1,189 3,722 


6,494 




1 




Total 


56,721 i 46.797 


5,307 1 5,480 


62,028 


52,277 











i There are \ride discrepancies bet^veen the figures of the imports of Melilla from Spain and the Spanish 
figures for exports to Meliila. The latter were 4,227 and 4,196 thousands of pesetas for the two years shown 
above. Discrepancies of like nature are found in the returns of the trade m the opposite direction, the 
Spanish figure for imports from Melilla in 1913 being only 614 thousands of pesetas. The discrepancy is 
probai^ly due chiefly to the inclusion of Government supplies in the Melilla figures and their exclusion 
from the Spanish figures. The same discrepancies are found in regard to the trade with Ceuta; but in 
regard to the trade with Fernando Po the discrepancies are very slight. 

Table 10. — Comrroerce of Ceuta, 1913 and 1914. 

[In thoiisands of pesetas.] 



Country. 


Imports. 


Exports. 


Total trade. 


1913 


1914 


1913 


1914 


1913 


1914 


Spain 


12, 826 

4,771 

2, 785 

1.820 

1,298 

979 

923 

210 


14,485 

3,455 

1,190 

1.014 

483 

358 

563 

141 

250 

71 


898 

4 


1,312 

32 

8 

70 

26 

372 

306 

87 


13, 724 

4,775 

2.785 

1 1,866 

! 1,313 

i 1,272 

934 

423 


15, 797 


Gibraltar 


3,487 


Algeria. - 


1,197 


France 


46 
15 

293 
11 

213 


1,084 


Belgium 


508 


Morocco 


730 


Germany . . . . . 


537 


Italv 


447 




337 


Great Britain . 








73 


All others 


191 


1 




192 












Total 


25.803 


22,010 


1,481 


2,217 


27,284 


24.227 







The share of Spain in the trade of Melilla in 1913 was: Imports, 
22 per cent; exports, 57.1 per cent; total trade, 25 per cent. In 
1914 the figures were, respectiYely, 50.9, 27, and 48.4 per cent. 

The share of Spain in the trade of Ceuta in 1913 was: Imports, 
49.7 per cent; exports, 60.1 per cent; total trade, 50.3 per cent. In 
1914 the figures were, respectively, 65.8, 59.2, and 65.2 per cent. 

The values of the principal articles in the import and export trade 
of Melilla in 1913 are shown in Tables 11 and i2: 



■19 From Estadistica General del Comercio Exterior de Espana, 1914 and 1915. 



SPAIN. 



553 



Table 11. — Imports into Melilla, 1913. 
[In thousands of pesetas.] 



Article. 



Flour, wheat . . 

Barley 

Rice, husked . . 
Corn. 



Chick-peas 

Dried leg^^raes 

Vegetables and fruits 

Sugar, glucose, etc 

Coffee - 

Tea and yerba mate (Paraguay tea) 

Olive oil 

Condensed milk 

Preserved foodstuffs 

Sweets, confitures, etc . . - 

Salt pork, bacon, and lard 

Spirits, wines, and liquors 

Porage 

White cotton piece goods 

Woolen goods (uimiixed) 

Woolen, goods (mixed with cotton and other fibers) . 

Knit goods 

Stearine, worked 

Soap, common 

Perfumery 

Footwear 

Hides and skins 

Harness 

Lumber, sawed 

Shooks and staves 

Furniture 

Live stock 

Coal 



Cement 

Glass and glassware 

Kitchen utensils, etc 

Electrical goods, including bulbs 

Machinery, including sewing machines . 

Gold, silver, and manufactures of 

Empty sacks 

All other articles 



Value, 



Total. 



738 
743 
356 
235 
528 
60S 
425 
830 
684 
922 
353 
519 
007 
394 
889 
437 
820 
477 
069 
937 
347 
,508 
749 
519 
,092 
507 
406 
592 
348 
393 
,6G2 
333 
390 
329 
568 
749 
586 
,623 
547 
,497 



56, 721 



Table 12. — Exports from Melilla, 1913. 
[In thousands of pesetas.] 



Article. 


Value. 


Cottons, white - 


700 


Cottons, colored 


989 


Pure woolen cloth . . . 


106 


Hides and skins 


799 


Live stock 


496 




25 


Sugar 


411 


Wheat flour 


225 


Almnnds 




130 


Fresh fish 


79 


Candles 


149 


Wool in the grease 


124 


Another articles - . - 


1,074 








Total... 


5,307 





The values of the principal articles in the import and export trade 
of Cent a in 1913 are shown in Tables 13 and 14. 



554 



COLONIAL TARIFF POLICIES. 



Table 13. — Imports into Ceuta, 1913. 
[In thousands of pesetas.] 



Article. 



Spirits, wines, and liquors 

Barley and other cereals 

Wheat flour .... 

Hams, bacon, salt pork, and lard 

Chick-peas 

Olive oil 

Coffee 

Vegetables and fruits 

Feedstufls 

Live stock 

Harness 

Machinery and agricultural implements. . . . 

Cotton piece goods. 

Cotton knit goods and articles 

Silk goods 

Boots and shoes 

Woolen goods 

Empty sacks 

Lime and cement 

Shocks and staves 

Iron bars and sheets 

Gunpowder, explosives, and fuses for mines 
All other articles 

Total 



Value. 



2,578 

2,004 

1,715 

886 

804 

508 

430 

423 

963 

1,903 

670 

324 

1,107 

984 

621 

519 

378 

672 

390 

386 

352 

273 

6,913 



25,803 



Table 14. — Exports from Ceuta, 1913. 
[In thousands of pesetas.] 



Article. 


Value. 


Fish, salt, smoked, and cured . . . 


718 


Wheat - 


107 




58 


Shooks and staves 


124 


Sacks .. .. . .; 


79 


All other articles 


395 








Total 


1.481 



FREE PORTS. 



Melilla and Ceuta have been free ports since 1863. At Ceuta two 
classes of duties are collected. One is levied by the Board of Public 
Works in the form of tonnage dues on merchandise entering or leav- 
ing the harbor. These dues are divided into two classes, one apply- 
ing to coastwise trade and the other to foreign commerce. It will be 
recalled in this connection that the trade betw^een Ceuta and Spain 
is legally coastwise trade. There is a distinct preferential aspect to 
these duties, as, for example, the dues on coastwise coal is 15 cente- 
simos per ton, while, for the foreign trade it is 30 centesimos, a differ- 
ential of 100 per cent. In other instances the rates are from i to f 
higher on the foreign traffic than on the coastwise trade. 

In addition to these tonnage dues the municipality of Ceuta also 
levies certain duties. These latter are collected on a considerable 
number of imported articles and on the whole are rather moderate. 
Preferential duties appear for certain commodities, such as rice, olive 
oil^ beer, pork and certain pork products, cheese, wines, straw, wheat, 
and a few others. There is no uniformity in the preferences. Im- 
ported national cheese has an advantage of 300 per cent in the cus- 
tom dues as compared with the foreign product; similarly, nationally 



SPAIN. 



555 



produced olive oil has an advantage in custom dues of about 166 per 
cent as compared with that produced in foreign countries. The low- 
est rate is on rice imports, where the preferential is about 43 per cent. 
It will thus be seen that in those instances where a preference appears 
at all it is relatively very large, though absolutely it may not always 
be so important. 

In Melilla municipal duties (arhitrios) are collected on imports. 
The amount of the arbi trios collected on imports in 1913, 1,415,500 
pesetas, shows that the rate of these municipal duties averaged about 
2| per cent of the value of the total imports of all kinds, free or 
dutiable. Since 1913, some of the rates have been changed; but the 
general level remains about the same. Two duties are collected. 
The port dues for public works are levied on each passenger or animal 
and on each ton of merchandise landed or loaded in the port. The 
municipal tax is levied on the importation of many kinds of mer- 
chandise. The port dues levied under the royal decree of November 
2, 1905, discriminated against trade with non-Spanish ports as 
follows : 









Coast 










trade 










with 


Foreign 




Article. 




Spain 
and 


naviga- 
tion. 


<» 






Canary 
Islands. 










Pes. 


Pes. 


Foodstullfs 




per 100 kilograms. . 


0.10 


0.15 


Articles for industrial purposes. . . . 




do.,.. 


.15 


.20 



The port dues under the royal ordinance of January 11, 1915, 
make no discrimination in regard to merchandise but discriminate 
in the charges levied on passengers according to the schedule given 
below. The general character of the port dues and of the municipal 
tax may be seen from the following selected items. 



Ores per metric ton . 

Coal, cement, building materials, fertilizers, empty sacks, potatoes do. . . 

Cereals, salt, common wine, wool do. . . 

Full-bodied wines and distilled liquors do . . . 

Fig lead and merchandise not specified do. . . 

Animals each . . 0. 

Passengers to or from a port of Spain or the Moroccan coast — 

First class each. 

Second class do. , , 

Third class, embarking do. . . 

Third class, disembarking do. . . 

Passengers from other countries — 

First class. .each. 

Second class. do... 

Third class, embarking do . . . 

Third class, disembarking do . . . 

Municipal tax.^^ 

Textiles and clothing. per kilo 

Conserves, confitures, chocolate do . . 

Fish, butter, salted meat do. . 

Dates do . . 

Spices do . . 



Pesetas, 
. 0.30 
. .70 
. 1. 
. 5. 
. 2. 
1. 



10 



25 
30 
50 
00 



. .50 

. .25 

. .10 

. .10 

. 1.50 

. .75 

. .50 

. 1.00 

Pesetas. 

. 0. 10 

. .02 

. .03 

. .04 

. .08 



66 Melilla: Tarlfa Num. 10, Jan. 20, 1919. 

185766°— 22 86 



556 



COLONIAL TARIFF POLICIES. 



Tea per kilo 

Coffee do.. 

Kerosene. do. . 

Common wine under 15° do . . 

Full-bodied wines do . . 

Beer do. . 

Alcohol do.. 

Coal per metric ton 

Iran sheets do. . 

Wood per metric ton . . 4. 

Steel sheets per quintal . 



Pesetas. 

0.16 

.22 

.07 

.07 

.23 

.05 

.80 

LOO 

4.00 

00-5. 00 

. 3.50 



TREATMENT OF PRODUCTS OF THESE TERRITORIES IX SPAIN. 

Under the tariff law of 1882, products of Melilla, Ceuta, the Cha- 
farinas, Alhucemas, and Penon de la Gomera paid the full duties, 
with the exception of fish from the first three, which entered free 
if provided with the proper certificates. 

SPANISH GUIXEA. 

LOCATION, AREA, AND POPULATION. 

The Spanish possessions in the Gulf of Guinea include the islands 
of Fernando Po, the district of the mainland known as Rio Muni, 
and several lesser islands. Fernando Po lies some 20 miles off* the 
Kamerun coast at 3°-4° north. Rio Muni lies on the coast just 
north of the Equator, between the Muni and Campo Rivers, and 
after the French cession of territory to Germany in 1912 was entirely 
surrounded on the landward side hy Kamerun. The smaller islands 
named below are in the mouth of the Muni River -and in Corisco 
Bay, except Annobon which lies 300 miles to the southwest. 

I'he areas and population of these possessions are shown in Table 15. 





Table 15. — Area and population of Spanish 


Guinea. 








Possessions and dependencies. 


Area 
(square 
miles^. 


Population. 




Total.i 


'S^"hite. 


Rio Muni 


9,470 

800 

6.5 

5.5 

.05 

.75 


89, 130 
17,000 
1,-100 
1,400 
150 


130 


rernando Po 


300 






Corisco . . 




Little Elobey. 




Great Elobey. 












Total 


10/2S3 


108,950 


430 







» Estimates given in the Statesman's Year-Boole for 1919, p. 1269. The table on p. 1263 gives the popula- 
tion of Rio Muni as 200,000 and of the islands as 23,844. Briones Ferrero, Gabriel: Espana, Datos Geo- 
grificos y Estadistieos, Madrid, 1918 (?), gives Rio Muni a population of 17,350 (p. 8), or of 101,000 
(p. 450). Similarly he gives Fernando Po a population of 12,100 or of 20,750. 



GOVERNMENT. 



The Spanish possessions in the Gulf of Guinea constitute a single 
colony under a governor general who resides at the capital, Santa 
Isabel, on Fernando Po. There are subgovernors for the districts 
of Bata, the chief town of the mainland, and of Elobey, which 



SPAIN". 557 

includes the islands of Annobon and Corisco. There is no repre- 
sentative assembly and the tariffs are promulgated by royal decrees. 

DEVELOPMENT OF THE COLONY. 

Spanish Guinea may be divided into two parts : Fernando Po, and 
the mainland with the adjacent islands. Fernando Po has developed 
rapidly in the last 20 years, but the colony on the mainland has 
made no progress. 

The coast of the mainland is low, marshy, and unhealthful. Its 
luxuriant vegetation abounds .in rubber trees, oil palms, and hard- 
woods. But Spanish authority has not been made effective beyond 
the coast and there are no harbors and no railroads or even roads. 
The region also lacks navigable rivers. The few English, French, 
or Spanish ' 'factories" are located on 'the coast and on the islands 
of Corisco and Little Elobey. These factories exchange textiles and 
other European goods for ivory and forest products. An official 
report summarized the situation in 1915 as follows: 

In summary, the utilization or improvement of the colony from the point of view 
of its exploitation is practically zero, for the cultivated fields do not amount to one 
part in two thousand of the total area. The result is that a region capable of pro- 
ducing 500 millions (of pesetas) annually at present produces scarcely 1 million. ^^ 

The Spanish Government has tried to enlist private capital in the 
development of Rio Muni by offering concessions on very favorable 
terms with tax exemptions and even bounties, but so far without 
success. 

Fernando Po is a very fertile volcanic island, and as it rises to a 
height of 9,300 feet it might be used as a health resort. The little 
money which the government of the colony has had at its disposal 
in recent years has been spent in Fernando Po; new public buildings 
have been erected and two short railroads have been undertaken. 
While the agricultural development of the island has only started, 
it has made rapid progress since 1900. There are numerous European 
plantations, and cocoa, coffee, sugar and tobacco are cultivated. 
There is some trade in wood and other uncultivated products, but 
the trade in all other products combined is only a small fraction of 
that in cocoa. The annual harvest of cocoa has increased rapidly. 
In 1903 the crop amounted to 1,400 metric tons; in 1911, to 2,800 
tons; and in 1914, to over 4,000 tons.^^ 

COMMERCE. 

The total value of the commerce of the Spanish colonies in the 
Gulf of Guinea in 1913 ^^ was 11,911,000 pesetas ($2,298,000), 
6,831,000 representing exports and 5,080,000 imports. In 1910 the 
total value had been 8,047,000 pesetas— exports 4,067,000 and im- 
ports 3,980,000. The exports in 1913 included cocoa (6,920,000 
pesetas), ^^ timber, rubber, palm kernels, vegetable ivory, palm and 
coconut oil, copra, coffee, and kola nuts. The imports consisted 
chiefly of foodstuffs and provisions (1,309,339 pesetas), textiles, table- 

61 From Real Sociedad Geografica: Revista de Geografisi Colonial y Mercantll, Madrid, 1916, p. 12. Pub- 
lished by the Real Sociedad Geografica of Madrid. 

62 Deutsche Kolonialzeitung, 1913, p. 26; Revista de Geografia, 1916, p. 14. 
53 The ligures quoted are from Revista de Geografia, 1916, pp. 18-19. 

5* It is obvious that the value given for the cocoa exports is greater than the value for all exports. The 
discrepancy is remarked by the writer in the Revista de Geografia, who suggests that the explanation 
may be foimd in a confusion of exports to Spain with total exports. 1916, p. 19. 



558 



COLONIAL TAEIFF POLICIES. 



wares, building materials, hardware and tools, clothing, and leaf 
tobacco. 

Trade of Spain with Fernando Po. — The value of the trade in 
certain commodities between Spain and Fernando Po in 1913 is 
shown in Tables 16 and 17: 

Table 16. — Imports into Spain from Fernando Po, 1913. 
[In thousands of pesetas.] 



Commodity. 


Value. 


Cocoa 


4,576 
206 


Wood 


Miscellaneous imports 


93 


Total : 


4,875 





Table 17. — Exports from Spain to Fernando Po, 1913. 
[In thousands of pesetas.] 





Commoditv. 


Value. 


Wines . 




324 


Gold and silver coin 


483 


Preserved fniits and vegetables 


59 


Footwear, of aU kinds. . . . 


85 




34 


Rice . . 






284 


Oliveoil 


42 




101 


Manufactures of wood " 


107 




455 


Total............... .... 




1,974 









TARIFF POLICY RELATING TO SPANISH GUINEA. 

Tariffof 1893.— The tariff of 1893 for Fernando Po '' levied duties 
on only about a dozen articles of importation and on two exports. 
Spanish goods in Spanish vessels were admitted free or on payment 
of one-fifth of the duties paid by foreign goods in foreign vessels. 
The duties v/ere for the most part ad valorem, but were to be sta- 
bihzed by the fixing of official valuations. The preferences given 
to Spanish products and to Spanish shipping are shown in the fol- 
lowing table v/hich includes practically the whole of the schedule: 

Tariff of 1893. 







Foreign 








goods in 






Foreign 


Spanish 


Spanish 


Article. 


goods in 


vessels or 


goods in 


foreign 


Spanish 


Spanish 




vessels. 


goods in 
foreign 
vessels. 


vessels. 




Per cent. 


Per cent. 


Per cent. 


Textiles, except silk 


15 


12 


Free. 


Silk 


17 

8 


14 
6 


Free. 


■R.eariy-mflrlp. rlothirig . . 


Free. 


Wines 


15 
100 


10 
75 


3 


Other alcoholic beverages 


20 


Jewelry 


20 


14 


Free. 




100 
50 
17 


100 
35 
14 


20 


Leaf tobacco 


Free. 




Free. 







65 Decree of Aug. 2, 1893, Gaceta de Madrid, Aug. ii, 1893. The duties came into force six months after 
the publication of the decree. 



SPAIN. 



559 



Foreign coal paid 1 peso Der thousand kilograms. The chief 
differences between this schedule and the one now in force are found 
in the presence of the intermediate column and in the absence of a 
general rate on articles not specified. The export duties were only 
two: 





In 








Spanish 






In 


vessels to 


In 




forei2:n 


foreign 


Spanish 


Article. 


vessels to 


ports or 


vessels to 




foreign 


in foreign 


Spanish 




ports. 


vessels to 

Spanish 

ports. 


ports. 




Fer cent. 


Per cent. 




Palm oil 


8 
8 


6 

5 


Free 


Cocoa . . 


Free 







Tariff of 1907, — In 1906 the schedules of Fernando Po were ex- 
tended to Rio Muni, and in the following year new schedules were 
proclaimed for all the Spanish possessions in the Gulf of Guinea. 
This royal ordinance of December 9, 1907, included a free list, schedules 
of import arid export rates, and miscellaneous regulations. The 
purposes of the decree were set forth in the preamble, which reads in 
part as follows: 

Endeavor is being made to promote the interests o£ the treasury so far as may be 
consistent with the commercial interests of the colony. 

Considering that the fundamental basis of the new fiscal system should be as follows: 
Establishment of the duty in a specific form — that is, according to weight and measure- 
ment, so far as may be feasible; freedom from duty for articles classed as of prime neces- 
sity, as well as for those which may contribute to promote the material welfare and 
economic life of the colony, fixing of increased duties upon articles the consumption 
of which may prove harmful, as for example, alcoholic drinks; exemption from 
export duties of fruits and products, the trade in which, being Just begun, it is desir- 
able to encourage; determination of the proper duties upon the exportation of products 
which especially constitute the riches of Spanish Guinea; adoption of the system of 
two columns only, the one applicable to foreign commerce or to that under a foreign 
flag, and the other relating to domestic commerce carried on under the national flag, 
and finally that domestic commerce as well as shipping shall be protected by a proper 
differential margin. 

Considering, lastly, that the spirit which should shape the new tariff ought to be 
moderate in its aims as to revenue, both because of the economic situation of the colony, 
still very weak at its entrance into commercial life, and because it is absolutely neces- 
sary, by great caution in imposing duties and taxes, to foster the improvement and 
prosperity of the colony in its various relations and aspects, * * -^^ 

Preferential import duties: Under the tariff of 1907, which is still 
in force as set forth in the table below, substantial preferentials are 
accorded to Spanish products of the kinds most used by the natives, 
with the exception of alcoholic beverages. These articles are textiles 
and arms and munitions. Preferences are granted also on boots and 
shoes, jewelry, coal, tobacco, beer and wine, and on all articles not 
enumerated and not on the free list. These preferences, however, 
are limited to imports made in ships flying the Spanish flag. The 
free list is liberal, including, as stated in the preamble, ^^ articles 
classed as of prime necessity as well as those which may contribute 
to promote the material welfare and economic life of the colony.'' 
Among the most important are the following: Goods imported for 
the use of the government and for hospitals and missions; machines 
and tools for the construction of highways and railways; articles 



560 



COLOXIAL TARIFF POLICIES. 



imported by travelers for their own use; foodstuffs of various kinds, 
including live animals, meat, fish, oils, rice, cereals, vegetables, and 
fruits; building materials; agricultural, industrial, and mining 
machinery; and a variety of articles necessary for the comfort of 
European settlers, such as books, pictures, and tableware. 

This free list excludes from preferential tariff treatment practically 
all imports for the economic development of the territory and is a 
considerable deduction from the maximum possible extent of the 
preferences. On the stronger alcoholic beverages there is likewise no 
preference, but on the rest ot the schedule the preferences range from 
one- third of the duty levied on foreign goods to the whole of that 
duty. The absolute amount oi the preference is 80 per cent ad 
valorem on breech-loading firearms, 15 per cent on textiles other than 
silk and on jewelry, about SI (equivalent) a ton on coal, and 5 per 
cent ad valorem on unenumerated articles. The full schedule is as 
follows : 

Import duties of Spanish Guinea. 



Article. 



Rates on 
foreign 

goods or 

on good? 

imported 

under 

foreign 

flag. 



Rates on 
Spanish 
goods im- 
ported 
under 
Spanii^h 
flag. 



Tissues of silk ad valorem. 

Tissues of linen, cotton, or other textiles except silk do. . . 

Ready-made clothing do. . . 

Boots' and shoes - do. . . 

Jewelrv do . . . 

Coal : per 1,000 kilos. 

Full bodied wines per kilo gross. 

Common vrines .- do. . . 

Breech-loading fii-earms ad valorem. 

Tohaceo, manufactured per kilo gross. 

Tobacco, leaf do. . . 

Gunpowder, common do. . . 

GuniDowder, fine do. . . 

Flintlocks each. 

Percussion-cap guns do. . . 

Percussion caps per 100. 

Small shot, buckshot, etc per kilo gross. 

Cartridges, uncharged per 100. 

Cartridges, charged do . . . 

Petroleum per 100 kilos. 

Beer per kilo gross . 

Alcohol, denatured do. . . 

Sparkling wines do. . . 

Alcoholic liquids, without any added substances, of a value less than 1 peseta per 

liter, up to 50 degrees, inclusive per kilo gross. 

For each degree in addition an additional duty of do. . . 

Alcoholio liquids, with admixture of any kind, of a value less than 1 peseta per 

liter .' per kilo gross . 

Alcoholic liquids of a value of 1 peseta or more per liter: 

In bottles of less than one-half liter per bottle. 

In bottles of one-half liter to 1 liter do. . . 

In receptacles of a capacity of more than one liter do. . . 

All other articles, not included above and not on the free list ad valorem. 



Pes. cts. 

20% 

15% 

S% 

8% 

15% 

5 00 

1 00 

25 
100% 

1 50 

50 

2 50 

3 00 
12 50 
15 00 

1 00 
1 00 
1 50 
5 00 



10 00 



1 35 



L 00 
2 00 
2 50 
15% 



Pes. cts. 
Free. 
Free. 
Free. 
Free. 
Free. 
Free. 
Free. 
Free. 
20% 



1 35 



L 00 
I 00 
I 50 
10% 



1 This rate was increased to 175 peseta per hectoliter for the territories on the Continent by a roval ordi- 
nance of July 19, 1913. cGaceta de Madrid, Aug. 20, 1913.) 



SPAIIT. 561 

Preferential export duties: The preferential principle applies also 
to the export tariff. All exports are free of duty when consigned to a 
Spanish port in a Spanish vessel. When consigned to foreign ports, 
or transported under a foreign flag, they pay the following duties: 

Export duties of Spanish Guinea. 



Article. 



Duty. 



Palm oil per 100 kilos net. 

Oleaginous nuts, palm, palmiste, ka, etc do. . . 

Cocoa do .. . 

Rubber do . . . 

Wood, in logs or pieces measuring up to 3 meters in length piece. 

And for each meter or fraction thereof by which they exceed that length 

Wood in planks per 1,000 feet. 

Ebony and redwood (palo rojo) , per 100 kilos net. 

Ivory, in tusks, of 6 or more kilos per kilo net. 

Ivory, in pieces or stubs, of 6 or more kilos. ". do. . . 

Kola nuts per 100 kilos net. 



Pes. cts. 


10 


00 


2 


50 


10 


00 


35 


00 


10 


00 


5 


00 


8 


00 


2 


50 


1 


85 


1 


00 


5 


GO 



These products not only receive this preferential export rate if 
exported to Spain, but, as may be seen from the table on page 563, 
generally enter Spain also under a preferential tariff. 

Miscellaneous provisions: Miscellaneous provisions include the fol- 
lowing: (1) the restriction of imports of arms and ammunition to 
three j)orts (Santa Isabel, Nueva Bata, and Elobey), and regulations 
regarding their sale; (2) prohibition of the importation of spurious 
and light coins, obscene pictures and books, diseased animals and 
adulterated and damaged foodstuffs; (3) prohibition of the export of 
pieces of bokumen wood less than 75 centimeters in diameter, ^^ and 
also of elephant tusks and pieces or stubs of ivory weighing less than 
6 kilos. 

MUNICIPAL DUTIES. 

The communal councils of Fernando Po had been authorized pre- 
vious to 1907 to levy surcharges up to 50 per cent of the imjport 
duties. This power was abolished in 1907 or early in 1908,^^ and for 
it was substituted a fixed schedule of municipal import duties as 
follows : 

Pesetas per hun- 
dred kilos gross. 

Brandy, whisky, etc 15 

Sparkling wines 15 

Fiill-bociied wines. 10 

Alcohol 8 

Rum, ginger, etc 4 

Beer 1 

Cuban sugar cane 5 

Leaf tobacco 10 

Cement and bricks 0. 10 

Other merchandise. 0. 25 

These duties are levied on imports regardless of origin. 

68 The limitation has since been modified in order to allow the export of all wood cut in the process of 
clearing land for cultivation. See Revista de Geografia, 1916, pp. 17-18. 
" Board of Trade Journal, 1908, vol. 60, p. 491. 



562 COLONIAL TAEIFF POLICIES. 

PREFSRENTIAL TREATMENT IN SPAIN OF PRODUCTS OF SPANISH GUINEA. 

According to the tariff regulations in force as early as 1870, pro- 
ducts of Spanish Guinea entered Spain free of customs duty, though 
subject to ^'temporar}^" and municipal duties. Only certain prod- 
ucts, however, vvere officially recognized as those of the colony. 
TIiuf: it was not until 1892 that cocoa was so recognized. °^ The 
Spanish tariff of 1899 subjected to duty ail |)roducts of Fernando 
Po, Rio de Oro, and the other Spanish possessions in Africa, except 
fresh, salted, and cured lish, caught and prepared by Spaniards. 
This tariff provided, however, special rates for raw cocoa and coffee 
from Fernando Po, if transported directly ^^ in Spanish ships with 
the proper formalities. The rates were: On cocoa, 90 pesetas per 
hundred kilograms, as against 120 pesetas on the foreign product; 
and on coffee, 105 and 140 pesetas. The rate on cofl'ee remains 
unchanged,^^ but the preference on cocoa was greatly increased in 

1912 by reducing to 50 pesetas the rate on the colonial product, ^^* 
It should be noted that these preferences on cocoa and coffee apply 
only to Fernando Po, and not to Rio Muni and Rio de Oro. The 
amount of cocoa importable at the lower rate v/as limited in 1912 
to 2,000 metric tons, but this amount has been freely changed — in 

1913 it was 2,750, in 1915, 4,000, and in 1917, 3,700 tons.^^b xhere 
has been some criticism because these quantities were less than the total 
production. Some producers have held their cocoa, notwithstanding 
its inevitable deterioration, until after January 1, so that it would 
enter Spain under the low^er duty the following year. The budget 
law of December 25, 1912, for Spanish Guinea provided that coffee 
the product of the Spanish possessions in the GuJf of Guinea should 
be admitted entirely free from duty to a quantity of 5,000 kilograms 
in 1913, and 10,000, 15,000,20,000, and 25,000 kilograms, respectively, 
in the successive years through 1917. Any quantities in excess of 
these amounts were to pay the preferential rate of 105 pesetas. 
Colonial cocoa, coffee, and palm, oil are further protected in the Span- 
ish market by the surtaxes on indirect importation. 

By the Spanish tariff of 1912, exemption from duty was granted to 
a score of the chief exports of Spanish Guinea, Rio de Oro, and 
"the other Spanish possessions in Africa." This exemption was, as 
usual, dependent upon direct transportation in Spanish vessels. 
After the exemptions had been extended to the Spanish zone in 
Morocco, fresh and dried fruit was added to the list.^^ The following 
tabular statement shows the preferential treatment in Spain of the 
cocoa and coffee of Fernando Po, and the list of colonial products 
admitted free, together with the minimum duties ®^^ levied on similar 
products of foreign origin : 

68 See p. 538. 

59 "i3irectly " does not prevent stopping at natural ports of call if no cocoa or coffee be taken on board. 

60 The temporary tariff of May, 1921, makes the rate 70 pesetas and the tariff draft of July, 1921, raises 
it to 90 pesetas. 

60a In 1920 the duty on cocoa from Fernando Po was provisionaUy reduced to 20 pesetas per 100 kilos, 
pending the return of more normal exchange rates. This was mentioned in the temporary tariff of May, 
1921, and is retained in the July draft. The latter, however, reduces the rate on the foreign product to 
100 pesetas per 100 kilos. 

60b See Board of Trade JouiiaaL Jan. 20, 1913, up. 264-265; Apr. 15, 1915, pp. 170-171; Revista de Geo- 
grafia, 1916, pp. 8, 17. 

61 Bol. di legis., 1918, p. 739, citing Gaceta de Madrid, Oct. 31, 1918. 

61a The rates are those in force to 1921. The temporary tariff of May, 1921, increased most of them by 
50 or IGO per cent. Cotton and ivory were unchanged. 



SPAIN. 563 

Preferential treatment accorded by Spain to products of Spanish Guinea.^ 



Articles. 



Minimum 
rates 
of duty 
levied on 
products 
of foreign 
countries. 



Customs 
treatment 
of prod- 
ucts of 
Fernando 
Po, etc. 



Cocoa 2 100 kilos. 

Coffee 3 do. . . 

Neat cattle (milch cows) each. 

Neat cattle, other cows and bullocks do. . . 

Neat cattle, calves do. . . 

Sheep each. 

Goats do... 

Fish, fresh, salted or cured, if caught and prepared by Spaniards 100 kilos 

Raw cotton do.. 

Wool, common, unwashed do. . . 

Wool, washed do. . . 

Hides and skins, dried do. . . 

Hides and skins, green do. . . 

Gum arable do. . . 

kilo. 

100 kilos . 

do... 

kilo. 



••!( 



Pes. cts. 

100 00 

140 00 

80 00 

35 00 

11 00 

3 00 

2 00 



Ivory 

Palm oil 

Palm nuts 

India rubber 

Wood, unworked 

Dyewoods 100 kilos. 

Coconuts do. . . 

do... 

kilo. 

100 kilos. 



Copra 

Ostrich feathers 

Fresh and dried fruit 



4 24 00 

5 12 00 

1 30 

19 65 

45 70 

5 20 

3 00 

7 30 
20 

8 00 
(G) 

06 
0) 

16 
3 50 

1 00 
12 00 
8 3 50 



Pes. cfs. 
20 00 
SO 00 

Free. 

Free. 

Free. 

Free. 

Free. 

Free. 

Free. 

Free. 

Free. 

Free. 

Free. 

Free. 

Free, 

Free. 

Free. 

Free. 

Free. 

Free. 

Free. 

Free. 

Free. 

Free. 

Free. 



1 This preferential treatment, except that on cocoa and coffee, is extended to the products of Rio de Oro 
and the other Spanish possessions in Africa, including, since the decree of July 23, 1918, the Spanish zone 
in Morocco. (Bol. di legis., 1918, p. 628, citing the Gaceta de Madrid, July 25, 1918.) 

2 In the bean, uiiroasted, the product of Fernando Po, and imported directly therefrom in national 
vessels. Imports at the preferential rate are limited each year to a certain number of tons. 

3 In the bean, unroasted, the product of Fernando Po, and imported directly therefrom in national 
vessels. 

^ Fish, fresh, or with the salt indispensable for its preservation; salted codfish and stockfish. 

5 Tunny fish and sardines, fresh or with the salt indispensable for preservation. 

6 Not specified in the tariff. 

7 The rates vary according to the kind of wood. 

8 Raisins, figs, and dates for distillation pay 20 pesetas per 100 kilos. 

RIO DE ORO AND IFNI, 

LOCATION, AREA, AND POPULATION. 



The territory which usually appears on the maps as a single block 
under the name Rio de Oro really consists of three parts, to wjiich 
Spain possesses various titles. The larger part, to the south, is the 
colony proper. On January 9, 1885, the Spanish Government notified 
the European powers of its protectorate over this part of the coast, 
and the inland boundaries were later fixed by treaties wdth France. 
The notification of 1885 defined the coast as extending from Cape 
Blanco to Cape Bojador (27*^ 40' N., the boundary of Morocco), but 
a little later the decree putting the territory under the governor 
general of the Canary Islands defined it as extending from 20° 51' only 
to 26° 8', leaving unclaimed nearly 100 miles of coast between the 
colony and the Moroccan Empire. This coast and its hinterland was 
referred to in the Franco -Spanish treaty of October 3, 1904, in that 
France recognized in favor of Spain a ^^preferential right of occupa- 
tion" for the territory between 26° and 27° 40' N. This occupation 
has not yet taken place, so that under the rule that effective occupa- 
tion is necessary for the annexation of territory Spain has technically 



564 



COLONIAL TAEIFF POLICIES. 



no title to the region ; but as France is the only other power interested 
in northwestern Africa, French recognition of the Spanish sphere of 
influence is sufficient for practical purposes. The third portion of 
the territory usually represented as bemg part of Rio de Oro is the 
southwest corner of the Empire of Morocco which was recognized by 
the Franco-Spanish treaty of November 27, 1912, as part of the 
Spanish zone of influence in Morocco. ^^ The area of these three 
territorial divisions is about 65,500, 34,700, and 9,000 square miles, 
respectively, or a total of 109,200 square miles. The inhabitants, 
mixed tribes of Mohammedan Berbers and Negroes, number some 
tens of thousands.^^ The administration of Rio de Oro is carried on 
by a subgovernor under the governor of the Canary Islands. 

Farther up the coast a small strip of territory entirely surrounded 
by the French zone in Morocco is indicated on many maps as Spanish 
territory, under the name of Ifni. Its history is as follows: In 1476 
the governor of the Canary Islands made a settlement at Santa Cruz 
de Mar Pequena, on the African coast. By the treaty of 1860 with 
Morocco, the Spaniards obtained the recognition of the right to a 
fishing station at this point; but they were later unable to prove the 
location of the long abandoned settlement, and it is not improbable 
that it really lay in what is now Rio de Oro. In the Franco-Spanish 
treaty of November 27. 1912, the French recognized this cession of 
territory v/hich was still to be defined by the Sultan of Morocco, and 
its boundaries were f^xed by the Nun and Bu Sedra Rivers and a line 
25 kilometers from the coast. The area mcluded is thus some 965 
square miles.^* This territory, however, has not been occupied by 
the Spaniards, whose title to it is obviously incomplete. Naturally, 
it can have no special tarift', and it will receive no further consideration. 



COMMERCE OF RIO DE ORO. 

Rio de Oro is an arid, rocky and sandy plateau a thousand feet 
above sea level, and is often called the Spanish Sahara. There are a 
number of oases in the interior, and near the coast there is a scant 
growth of esparto grass. Attempts to acclimate European plants 
have not proved successful. The climate is very dry and hot, the 
temperature at times reaching 120° F. The inhabitants obtain a 
poor subsistence by raising cattle, sheep, and camels. The fisheries, 
the most important industry, are exploited by vessels from the Canary 
Islands, 

The principal items in the foreign trade of Rio de Oro in 1914 were 
as follows: 

Table 18. — Foreign trade of Rio de Oro, 1914. 
[From Re^^sta de Geografia, 1916, p. 21.] 



Imports. 


Exports. 


Commodity. 


Value. 






Commodity. 


j Value, 


Foodstuffs . 


Pesetas. 
56,658 1 
15,535 1 
47,067 


Fish 
Fish 


manm-e 
Total. 




1 Pesetas. 

j 122,500 

1 425 


Textiles 


Ari<5Pfillanpnn=; 










: 122,925 


Total 


119,260 i 









B2Seep. 532,fn. 5. 

^ Brioues Ferrero: Op. cit., on one page gives 24,000 and on another, 45,000. For other figures see 
Statesman's Year-Book, 1919 and 1921. 
« Statesman's Year-Book, 1920. 



SPAiK. 565 

In 1910 the imports were valued at 96^870 pesetas and the exports 
at 352,360 pesetas. In that year the exports of fish were worth 
346,501 pesetas.^^ 

The commerce carried on between Spain and Eio de Oro is insignifi- 
cant; in 1915 the imports into Spain from the colony were valued at 
only 38 pesetas and the exports to the colony were 1,102 pesetas,®^ but 
as Spanish fishermen who carry on operations on the coast of Rio de 
Oro have their base in the Canary Islands, fish from these fisheries 
probably appear in the Spanish statistics as imports from the Canary 
Islands. 

TARIFF OP RIO DE ORO. 

Search has failed to disclose any tariff schedules for this territory. 
The only decree on the subject before 1912 appears to be that of April 
23, 1895, which provided that all Spanish products should enter free 
if imported directly under the Spanish flag and that certain products 
'^from the Rio de Oro factory'' should, under the same conditions, be 
admitted free into Spain. The articles named were bovine animals, 
wools, gums, rough ivory, gold dust, ostrich skins and feathers, and 
fresh, salt, dried, smoked, or preserved fish from the fisheries or 
manufactories on the coast of the said colony. In the tariff act of 
1912, Rio de Oro is mentioned only in connection with Fernando Po 
and the other Spanish possessions in Africa, in the provision for the 
free importation of their products into Spain. The products listed 
for free importation into Spain are given on page 563. Since fish 
are practically the only export of Rio de Oro and half a dozen of the 
more plausible objects of trade development had already been 
mentioned by the decree of 1895, it is not likely that the law of 1912 
made any change in the situation so far as this colony was concerned. 

THE SPANISH ZONE OF INFLUENCE IN MOROCCO. 
LOCATION, AREA, AND POPULATION. 

By the treaty of November 27, 1912, between France and Spain, 
Spain was to assist in maintaining tranquillity and good government 
in a part of the Moroccan Empire. The Spanish zone of influence, 
thus constituted, consists of two distinct territories: A strip along 
the northern coast of Morocco, and a rectangular block in the south- 
west corner contiguous with Rio de Oro. This southern block lies 
between the River Draa and Cape Bojador (27° 40' N.) and extends 
inland to longitude 8° 40' west of Greenwich. Its area is about 
9,000 square miles, and the estimated population is only some 
6,000 o^^ It produces some esparto grass and date palms and the 
inhabitants raise sheep and camels. The occupation of this terri- 
tory was begun in 1916 to the extent that a small post is maintained 
at Tarfaya near Cape Juby. 

The Spanish zone in northern Morocco, generally referred to 
simply as the Spanish zone, extends some 350 miles along the north- 
ern coast, from the mouth of the Muluya River on the Mediterranean 
Sea westward to the Strait of Gibraltar and southward along the 
Atlantic Coast to 35° north. West of the Strait of Gibraltar its 
coast line is broken by the international zone surrounding Tangier^ 
and east of the strait by the old Spanish towns of Ceuta and Melilla. 

«» Deutsche Kolonialzeitung, 1913, p. 25. 

65 Esradistica General del Comercio Exterior, 1915. 

•* fiarris and Cozens-Hardy: Modern Morocco, London, 1919, p. 76. ^ 



566 COLONIAL TAEIFF POLICIES. 

This strip extends inland for an average distance of 50 kilometers 
(30 miles) and contains in all about 10,950 square miles, or one- 
twentieth of the entire area of the Moroccan Empire. It comprises 
the districts known as the Kif, the Gharb, and Djebala. The Rif 
lies in the eastern half of the zone, and '^forms almost a nation apart" 
as the people differ from the other tribes of Morocco in language, 
appearance, and customs.^* For centuries their submission to the 
Makhzen (Moroccan Government) has been only nominal. The 
authority of the Governm.ent over the Jibalas (inhabitants of Djebala) 
vfas also small. In 1914 Spain had effectively occupied only about 
one-fourth of this northern zone.^^ The population of this northern 
Spanish zone is usually given as about one-half million, but the 
latest estimate attributes that number to Djebala alone and adds 
400,000 for the Rif* and 50,000 for the Gharb.^^ The greater part of 
the Gharb is in the French zone. 

SPANISH INTERESTS IN MOROCCO. 

The Sppaiiards have naturally been interested in the country lying 
so close to them across the Strait of Gibraltar. Spain's commercial 
interests in Morocco have long been of some importance. The 
Spanish Jew" is an element of long standing in the population, and in 
recent years there has been a new influx of Spanish merchants to 
Morocco. With the development of public improvements under 
European supervision in Tangier and elsewhere, a great number of 
Spanish la^borers have resided more or less permanently in the cities 
of Morocco. In 1908 it was estimated that the Spanish population 
of Morocco numbered 30,000, or about four-fifths of the entire 
Christian population. "^'^ Relations between Spain and Morocco have 
not always been friendly, and even in times of peace the uncontrolled 
tribesmen of the Rif have often caused trouble. In 1893, after a 
conflict, the Moorish Government was forced to pay an indemnity 
of 20,000,000 pesetas, giving as temporary security a lien upon 
certain customs duties. In 1909 Rifhans attacked a gang of Spanish 
railroad labor erg near MeliEa. Large Spanish forces were sent to 
Africa, and after severe fighting occupied a considerable tract of 
territory. A treaty ^^ v/as then made by which the Shereef granted 
an indem.nity of 65,000,000 pesetas to Spain and agreed that a corps 
of Spanish ofhcials should assist the Moorish authorities in the col- 
lection of customs duties on the frontiers near MeliUa and Cent a. In 
1911 another attack upon Spaniards in the Rif resulted in the occu- 
'pation by Spanish forces of the ports of Laraiche (Ei Araish) and 
Arzila and of the district between as far inland as Alcazar (El Kasar). 
The natives made another serious attack on the Spanish forces in 
this region in 1921. 

In 1904 Spain had recognized the right of France to give advice 
to the Moorish Sultan concerning political and economic reforms, 
and in turn France had recognized the predominance of Spanish 

68 Harris and Cozens-Hardy: Modern Morocco (1919), p. 15. 

69 Don Louis Garcia Alixr'Un Voyage d'Etudes en Algerie (L'Afrique Francaise, 1918, vol. 28, Supple- 
ment, p. 23). He states that the Spaniards had occupied 7,000 out of the 28,000 square kilometers in their 
[northern] zone and the French 215,000 out of their 572,000 kilometers. The area of this Spanish zone 
is usually given as 24,000 or 25,000 square kilometers but sometimes somewhat less. Harris and Cozens- 
Hardy state that the Spaniards have not occupied one-tenth of this territory, 

™ Harris and Cozens-Hardy: Op. cit., p. 71. 

'1 Estimate of P. Lerov-Beaulieu in his De la Colonisation chez les Peuples Modernes, Paris, 19C8, vol. I, 
p. 274. 

'2 Spanish-Moroccan agreement of Nov. 17, 1910. Eeprinted in Deloncle, 1^.: Statut International de 
Maroc, Paris, 2d ed., revised, 1912, pp. 333-43. 



SPAIN. 567 

influence in a zone or sphere of influence in Morocco.'^ But Ger- 
many's protest against this manner of handhng Moroccan affairs 
resulted in the meeting of an international conference at Algeciras 
in 1906. The act of Algeciras, although it partially nullified the 
Franco-Spanish agreement of 1904, gave Spain the right to- police 
certain ports and admitted European representatives to participation 
in the management of the State Bank of Morocco. '^^ In 1912, when 
France formally announced her protectorate over Morocco, the zone 
described above was assigned to Spanish control. The port of Tan- 
gier (140 square miles) was not included in the Spanish zone, but was 
to be subjected to an international control. The form of this control 
and the exact status of Tangier, however, have not yet been agreed 
upon. In the meantime, and provisionally, the consuls of the 
European powers practically govern the city. The Spaniards feel 
that Tangier is an essential part of their zone, and argue that on the 
basis of foreign population it should be given to them. The French 
point to their predominant position in Morocco and to their invest- 
ments in Tangier; and they are no more interested than the Spaniards 
in establishing a definitive international administration for Tangier. 

GOVERNMENT OF THE SPANISH ZONE. 

The treaty between France and Spain regarding Morocco (1912) 
provided for the continuation of the Shereefian Government subject 
to the control of the French and the Spaniards in their respective 
territories. The Spaniards take the position that the treaty gave to 
them the same relation to their zone of influence as the French have 
to theirs — i. e., that the zone of influence is really a protectorate. 
The French maintain that there is only one Shereefian Government 
which retains its sovereignty over the whole of Morocco, including 
Tangier and the Spanish zone, and that by their treaties with Spain 
and Morocco, France alone is the protector and adviser of this 
Government in all that pertains to foreign affairs and to all other 
functions of Government which are not local in their nature. "^^ 

The Spanish zone is administered, under the control of a Spanish 
high commissioner, by a Caliph chosen by the Moorish Sultan from 
two candidates nominated by the Spanish Government. Provision 
is made for the financial independence of the Spanish zone, in the 
following articles of the treaty: 

Art. 10. The imposts and resources of every kind in the Spanish zone will be 
appropriated for the expenses of said zone. 

Art. 11. The Shereefian Government can not be called upon to share in any way 
the expenses of the Spanish zone. 

The financial independence is not complete, however, for the treaty 
also provided (art. 12) that the vSpanish zone should contribute to the 
expenses of the Moroccan loans of 1904 and 1910 in the ratio which 
the customs receipts of the Spanish ports, after a deduction of 
500,000 pesetas Hassani, bear to the total received in all the ports 
which are open to commerce. The contribution from the Spanish 
zone was provisionally fixed at 7.95 per cent of the total expenses of 
the loans, but this ratio is subject to annual revision. 

"a See Deloncle: Op. cit., pp. 36-37. 

'^ The police force was to he under Spanish control at Tetuan and Laraiche and under joint French and 
Spanish control at Tangier and Casablanca. Art. 12 of act of Algeciras, Debidour, A.: Histoire Diplo- 
matique de I'Europe, Pt. U, p. 295, or Deloncle, L.: Op. cit., p. 04. 

'& See various declarations by leading Frenchmen and Spaniards, published from time to time in 
L'Afrique Frangaise. 



568 



COLONIAL TABIFF POLICIES. 



COMMERCE OF THE SPAXISH ZONE IX MOROCCO. 

The distribution of the export and import trade of the three ports, 
Laraiche, Tetiian, and Arzila in the Spanish zone, by conntries^ in 
1915 and 1916 is sho^\Ti in the following table :'^ 

Table 19. — Commerce of Spanish Morocco. 1915 and 1916. 
[In pounds sterling.] 



Countrj-. 


Imports. 


Exports. 


1915 1916 


1915 ^ 191G 

i 




511,951 573.008 


43, 179 
27, 792 


79,363 
28, 212 


United Kingdom 


218, 882 
25,924 
38,071 
31,030 

9,544 


176,365 

35, 586 

22, 893 

12,057 

9,380 


T^fvnt, 






8,147 


4,205 




United States 






Italv 


5,204 
339 


137 


Othei' countries . 


18,588 4,525 


62 






Total 


853,996 1 S.^3.8^4 


^,861 


111,979 









The share of Spain in the trade of the Spanish zone was as follows: 
1915 — imports, 60 per cent; exports, 51 per cent; 1916 — imports, 
68.7 per cent; exports, 70.9 per cent. 

In the absence of statistics treating the commerce of the Spanish 
zone by commodities, Tables 20 and 21 are submitted to show the 
chief commodities exchanged between Spain and Morocco (both 
French and Spanish zones) :' ' 

Table 20. — Imports into Spain from Morocco, 1913 avA 1914- 
[In thousands of pesetas.] 



^ommoditv. 




Natural phosphate of lime 

Sesame and other oil-bearing seeds 

Hides and skins, dried 

Hides and skins, green 

Tallow and other animal fats 

Chick-peas 

Seeds and beans 

i^ggs. 



Miscellaneous imports. 
Total 



2,664 



Table 21. — Exports from Spain to Morocco, 1913. 
[In thousands of pesetas.] 



Commodity. 



Value. 



Total . 



\U 
342 
34 
173 



Stones, earths, minerals, etc. (brick, 890; tiles, 209) 

Metais and manufactures of 

Materials used in agriculture, pharmacy, perfumery, and chemical industries i 

Cotton and manufactures of (cotton piece goods, 294) j 

Hem-p, flax, and j ute, and manufactures of j 

Wool' and manufactui'es of 

Silk and manufactures of . 

Paper and manufactiires of 

^\ ood and other vegetable m.aterials used in industry, and manufactures of (furniture, 306). 

Animals and animal products used in agriculture and industry 

Instruments and machinery 

Articles of food (.potatoes, 416; olive oil, 549; wioes, 2,111) 

Miscellaneous exports (sandals (alpargatas), 245) 



42 

429 

469 

5S 

4,228 

980 



8,759 



7s Board of Trade Journal, July 26, 1917. 

" Estadistica General del Comercio Exterior de Espafia, 1913 and 1914. 



SPAix. 569 

THE TARIFF SYSTEM OF MOROCCO. 

The French and Spanish zones of Morocco have the same tariff 
system, both because the tariff — at least the maximum duties levia- 
ble — is limited by treaty and because the French and Spanish have 
agreed upon uniformity of duties in the two zones 7^ The French 
zone in Morocco is vastly more important commercially than the 
Spanish, and the tariff system has been treated fully in the account 
of the French colonial tariffs (pp. 204-214). A brief summary will 
suffice at this point. 

Import duties. — In numerous treaties the Moroccan Government 
pledged itself to levy upon imports no more than 10 per cent ad 
valorem. To this, the conference of Algeciras added 2\ per cent 
for the construction of public works. Wines, distilled liquors, silks, 
and jewelry pay only 5 per cent, plus the 2\ per cent. Agricultural 
machinery and fertilizers enter free, and there are various prohibi- 
tions upon importation — tobacco, powder, opium, etc. These treaty 
rates apparently never applied to imports overland from Algeria, 
and by the Spanish-Moroccan accord of November 17, 1910, the 
Moroccan customhouse just beyond the Spanish port of Melilla,^^ 
levies no higher duties than those of the Algerian frontier. On these 
two frontiers the import rate is 5 per cent ad valorem, except that 
about 30 articles are dutiable at specific rates. 

Export duties. — The export duties of Morocco fall on all exports 
of any importance, and are set forth in a long schedule composed 
chiefi}^ of specific rates. The ad valorem rates are generally 5 or 8 
per cent. At the land frontier of Algeria and Melilla the rate is 5 
per cent except for a few specific duties. 

PREFERENCES IN SPAIN TO PRODUCTS OF THE SPANISH ZONE. 

No tariff preference was granted in Spain to products of the Span- 
ish zone in Morocco, until the royal decree of July 23, 1918, By 
this decree the advantages previously granted to the free ports and 
other possessions in Africa were extended to the Spanish zone — i. e.^ 
products of the zone in so far as they are listed in '^Disposition VIII" 
of the tariff ^^ now enter free if imported directly in Spanish vessels. 
In extending this provision to the Spanish zone, a limitation was 
imposed upon the quantity of wool in the grease which might be 
imported free each year. This amount was fixed at 150,000 kilo- 
grams from the zone and the Spanish possessions, and the executive 
was given power to modify this figure whenever the statistics show 
that the production is approaching the limit set.^^ Later in the 
same year fresh and dry fruits were added to the list.^^ 

Bibliography. 

[See also general works listed on p. 835 and the texts of treaties listed on p. 834.] 

Ab eking, M. Zur Rio Muni Frage. Koioniale Rundschau, 1913. 

Andrews, G. F. Spanish Interests in Morocco. American Political Science Re- 
view, vol. 5. Baltimore, 1911. 

" Treaty of Nov. 27, 1912, arts. 13 and 19. 

" See p.' 210 fn. 

80 See list under ' 'Spanish Guinea," p. 563. 

«i Gaceta de Madrid, July 25, 1918. 

8a Gaceta de Madrid, Oct. 31, 1918. 



570 COLON liiL TAEIFF POLICIES. 

Beltran y Rozpide, Ricardo. Politica Geografica. La Expansion European en 

Africa, 1907-1909. Madrid, 1910. El Porvenir de la Guinea Espanola. Revista 

de Geografia Colonial y Mercantil, vol. 13. Madrid, 1916. 
Bernard, Franyois. Le Maroc Economique et Agricole. Paris, 1917. 
Causse, J. Les Espagnols dans le Rif. Questions Diplomatic! ues et Coloniales, 

vol. 28. Paris, 1909. 
Debidour, A. Histoire Diplomatique de TEurope. Part II. Paris, 1917. 
Dechaud, . Melilla et les Presides. Bulletin de la Societe de Geographie 

Commerciale de Paris, December, 1907, and January, 1908. 
Deloncle, L. Statut International de Maroc. Paris, 2d ed., revised, 1912. 
Ferrero, Briones Gabriel. Espaiia, Datos Geograficos v Estadisticos. ]\Iadrid. No 

date (1918?). 
France-Spain. Treaty Regarding Morocco, 1912. American Journal of International 

Law, vol. 7 (supplement), 1913. 
Gaceta de Madrid (official gazette), daily. 
Guia Oficial de Espana. Madrid, 1914. 

Haessner, Max. Marokkos Handelsbeziehungen seit 1905. Berlin, 1912. 
Harris, "Walter B., and Cozens-Hardy, W., M. P. Modern Morocco. A report on 

Trade Prospects, with some Geographical and Historical Notes. London, 1919. 
Hauser, Henri. La Guerre Europ^enne et le Probleme Colonial. Paris, 1915. 
L'Afrique Frangaise, Bulletin du Comite de I'Afrique Fran^aise, Paris, monthly, 

and supplements. 
Lerov-Beaulieu, Paul. De la Colonisation chez les Peuples Modernes. 2 vols. 

Paris, 1908. 
Lorin, Henri. Les Colonies Espagnoles du Golfe de Guinee. Questions Diplo- 

matiques et Coloniales, vol. 21, 1906. 
I^'.Iadrid: Real Sociedad Geografica. Re vista de Geografia Colonial v Mercantil. 

Vols. 12 and 13; 1915, 1916. 
Marvaud, Angel. L'Espagne au XXe Siecle. Paris, 1913. 
Mill, H. R. (editor). International Geography. New York, 1909. 
Mori, Angiolo. I Corpi Consulti\d dell'Amministrazione Coloniale negli Stati 

d'Europe. Rome, 1912. 
Moses, Bernard. Establishment of Spanish Rule in America. New York, 1898. 
Olivart, Marques de. Coieccion de los Tratados, Convenios y Documentos Inter- 

naclonales (1834-1904). 14 a^oIs. and index. -Madrid, 1890-1911. 
Orderanzas Generales de la Renta de Aduanas Aprobados por Decreto de 15 de Julio 

de 1870, Eclicion Oficial, Madrid. 
Perez, A. Zona Espanola del Norte de Marruecos. Toledo, 1913. 
Reparaz, Gonzalo de. Politica Espanola en Africa. Barcelona, 1907. 
Rio Joan, D. Francisco del. Africa Occidental Espanola (Sahara y Guinea). Madrid, 

1915. Sobre un Provecto de Colonizacion en la Guinea Espaiiola. Madrid, 

1914. 
Roscher, Wilhelm. Establishment of Spanish Rule in America. (Trans, by E. G. 

Bourne, New York, 1904.) 
Singelmann, Carl. Die Wirtschaftlichen Yerhaltnisse in den Spanischen Besitzungen 

im Guinea Busen. Deutsche Kolonialzeitung, 1913. 
Spain: Aranceles de Aduanas para la Peninsula e Islas Baleares. Edicion Oficial. 

Madrid, 1906. 
Spain: Ministerio de Estado. Memoria Respeto a la Situacion Politica y Economica 

de las Posesiones Espaiiolas del Africa Occidental en ei ano, 1902. Madrid, 1904. 
Spain: Direccion General de Aduanas. Estadistica General del Comercio Exterior 

de Espana. Madrid, annually. 
Spain: Ministerio de Instruccion Pubiica. Anuario Estadistico de Espaiia. 1916. 
Spain: Resena Geografica y Estadistica de Espana. 3 vols. Madrid, 1912. 
Velez Villanueva, Joaquin. Recopilacion Legislativa vigente en la Zona de In- 

fluencia de Espagna en Marruecos. Organizacion delProtectorado. Madrid, 

1917. Ensayo sobre la Agricultura, el Comercio, y la Industria en Marruecos. 

Madrid, 1916. 
Vila Serra, Don Jose. Manual de la Renta de Aduanas. Valencia, 1910. 



Chapter XI. 

COLONIAL Tariff policy of the united states. 



CONTENTS. 



Page. 

I. Introduction: The colonies of the United 

States 572 

Area and population- 
Table 1.— Area and population of the 
United States and noncontiguous 

territories 573 

Commerce- 
Table 2.— Distribution of trade of 
United States colonies, 1900, 1913, 
and 1919 574 

II. Government and making of tariffs: 

Government 574 

Making of tariffs 575 

III. Colonial tariff policy and system- 

summary: 
Treaty provisions bearing on the colonial 

tariff policy of the United States 576 

The insular cases 577 

American colonial tariff policy 578 

Tariff system — 

Import duties in the colonies 579 

Export duties in the colonies 579 

Internal-revenue taxes. 579 

Treatment of shipments to the United 

States from the colonies 580 

Provisions with respect to coastwise 
trade 580 

IV. Tariffs of the colonies individually: 
The Philippines- 
Area and population 580 

Commercial importance 580 

Table 3.— Total exports by coun- 
try of destination, and princi- 
pal articles exported from the 
Philippine Islands, 1913, 1918, 
1919 581 

Table 4.— Total imports by 
country of origin and" principal 
articles imported into the 
Philippine Islands, 1913, 1918, 
1919... 582 

Table 5.— Share of the United 
States in imports into the 

Philippine Islands 582 

Acquisition and government 583 

Finance 584 

Table 6. —Income and expendi- 
tures of the Philippine govern- 
ment, 1919 585 

Tariff of the Philippines- 
History of the Philippine tariff 587 

The tariff under the Spanish 
regime 587 

The tariff under the United 
States military administration^^ 588 

Tariff provisions in the treatym 
Paris 588 

The Philippine tariff act of 1901 . . 589 

The tariff act of March 8, 1902. ... 591 

Export duties: Remission of duty 
upon exports to the United 
States under the acts of 1902 
and 1909 592 

Drawbacks and exemptions from 
internal revenue for exports to 
the Philippines, act of 1902 595 

The Philippine tariff of 1905 595 

The act of February 26, 1906 . 596 



IV. Tariffs of the colonies individaully— Con. 

Tariff' of the Philippines— Continued. 

Act of 1909: Free trade between the 

United States and the Philippines. 597 

Table 7.— Comparison of rates 

under the Philippine tariff acts 

of 1905 and 1909 with those 

under the United States tariff 

act of 1897 599 

The United States tariff" act of 

1913 599 

Coastwise-shipping provisions . . 600 
Porto Rico- 
Area and popiilation 600 

Commercial importance — 

Table 8.— Value of merchandise 
exported from Porto Rico, 

1901-1920. 601 

Table 9. —Value of principal ex- 
ports from Porto Rico, 1914, 

1917, and 1919 601 

TablelO.— Quantity of sugar,cigars , 
and coffee exported from Porto 

Rico, 1901-1919 602 

Table 11. —Value of merchandise 
imported into Porto Rico, 

1901-1919..... 602 

Table 12.— Value of principal im- 
ports into Porto Rico, 1914, 

1917, and 1919 602 

The government of Porto Rico 603 

Finance 603 

Tablel3.—Revenuesand expendi- 
tures of Porto Rico, 1918, 1919, 

and 1920 605 

Tariff history— 

The tariff under the military adminis- 
tration 605 

The Foraker Act of April 12, 1900 .... 607 
Table 14.— Ad valorem equiva- 
lents of rates under act of April 

12,1900 610 

Present tariff relations of the United 

States and Porto Rico 611 

American Samoa — 

General description 611 

Table 15.— Imports into Tutuila, 

1911-1919 612 

Table 16.— Imports into Tutuila, 

by principalcommoditie'S, 1911 . 612 
Table 17.— Exports of merchan- 
dise from Tutuila, 1912 to 1918. 613 
Table 18.— Exports of copra from 

Tutuila, 1903-1911 613 

Acquisition, government, and finance 613 
The tariff on imports into American 

Samoa 615 

Treatment of imports from Samoa 

into the United States 616 

Coastwise trade 616 

Guam- 
General description 617 

Acquisition and government 617 

Table 19.— Totaltradeof Guamfor 

1900, 1913, and 1919 617 

Commercial importance 617 

Table 20.— Revenuesand expendi- 
tures of Guam for the fiscal year 
1916....... 618 



185766' 



.oo_ 



571 



572 



COLONIAL TABIFF POLICIES. 



Page. 
IV, Tariffs of the colonies individually — Con. 

Tariff regulations. 618 

The Virgin Islands- 
General description 618 

Commercial importance 619 

Table 21. —Total trade of the Vir- 
gin Islands, 1918, 1919, and first 

six months of 1920 619 

, Table 22. —Value of imports into 
the Virgin Islands from the 
United States, by classes o'f 

commodities, 1918 and 1919 620 

Table23.—\'alue of exports to the 
United States from the Virgin 
islands, by classes of commodi- 
ties, 1918 and 1919 620 

Acquisition and government 620 



IV. Tariffs of the colonies individuallv— Con. 
The Virgin Islands— Con. 

Finance 621 

The tariffs of the Virgin Islands 621 

The tariff of St. Croix , 622 

St. Thomas and St. John 623 

Tariff treatment of imports into the 

United States 623 

Panama Canal Zone — 

Acquisition 624 

Government 624 

Tariff history , 025 

Tariff treatment of imports into the 

United States from Panama ... 628 

Coastwise-shipping laws not applied 

to Canal Zone 629 

Bibilosranhy 629 



1. Introduction: The Colonies of the United States. 

Until comparatively recently, the territorial acquisitions of the 
United States consisted wholly of land adjacent^ to the territory 
already forming part of the United States, unoccupied or sparsely 
inhabited, but suitable for extensive settlement hj people of Euro- 
pean origin. To such territories were given forms of government 
essentially colonial in chaxacter, but designed to be temporary only, 
and to permit of and promote the eventual assimilation of these 
territories into the Union as sovereign States as soon as they had 
attained a sufficient degree of development. Later, especially during 
and after the Spanish-American War, the United States acquired 
noncontiguous territories already densely populated in the main by 
non-European races possessing organized government, and not so suit- 
able for extensive settlement by European peoples. Such terri- 
tories were also given forms of government essentially colonial in 
character. Although these territories are frequently spoken of as 
''colonies" both by Americans and by foreigners, the nomenclature 
developed dming the days of the extension of the boundaries of the 
continental United States to adjacent undeveloped territory was 
applied also to them, and official usage uniformly refrains from re- 
ferring to them as colonies. 

The task of deciding, even in the nontechnical way permissible and 
adopted in this report, which of the territories under American con- 
trol are in effect colonies, and v/hich are not, presents considerable 
difficulty. Merely for purposes of convenience, this report will exclude 
from consideration Alaska and Hawaii, and include the Phihppines, 
Porto Rico, American Samoa, Guam, the Canal Zone^ and the Virgin 
Islands.^ 

In addition to the territories named above, the United States 
exercises sovereignty over Wake Island, ^iidway Island, Howland 
and Baker Islands, and the Guano Islands scattered over the North 
Pacific^ "but these are either totallj^ or practically uninhabited, and 
no provisions has been made for their government." ^ 



1 Except Alaska. 

2 The Isle of Pines, situated in the Caribbean, off the southwestern coast of Cuba, and ceded by Spahi 
in the treaty of Paris of 1898, is sometimes classed as a possession of the United States. Whether Spain 
relinquished it to the UrJted States or to Cuba has never been determined. Under United States judicial 
decisions the Isle of Pines must be regarded as at least de facto im,der the jurisdiction of the Republic of 
Cuba, and hence as a "foreign country^' within the meaning of tariff legislation, smce the United States 
has never taken possession of this island as included in the territory ceded by Spain to the United States 
in the treaty of Paris, but instead, through its legislative and executive departments, has recognized the 
Cuban Government as rightfully exercising sovereignty over the island as a de facto government until 
its de jure status shall be determined. (Pearey ?'. Stranahan, 205 U. S. 257 [1907].) 

3 Wllloughby, W. i\: Territories and Dependencies of the United States, p. 308. 



UJSTITED STATES. 



573 



Of the territories here classed for convenience as colonies, Porto 
Rico in its relations to the United States resembles most closely 
Alaska and Hawaii. The last two, however, have been constituted 
organized Territories of the United States, whereas Porto Rico has 
not. Both Alaska and Hawaii are customs districts of the United 
States^ subject in every respect to the customs legislation enacted 
for the country itself, with no separate taxes excepjt for local pur- 
poses. Porto Rico, wdiile it is also a customs district, differs from 
them as to tariff regulations in several salient particulars : It has free 
trade, but not customs union, with the United States; it keeps the 
customs revenues collected at its ports; it receives back from the 
United States the internal-revenue taxes collected on its products 
imported into the United States; until 1909 its import duties were in 
several respects not identical wdth the tariff on imports into the 
United States. 

None of the United States colonies just mentioned was acquired 
before 1898.* In that year Spain ceded to the United States the 
Philippine Archipelago,^ Porto Rico, and the island of Guam in the 
Ladrones. Sovereignty over American Samoa by the United States 
was agreed to in the tripartite treaty signed by the United States, 
Great Britain, and Germany, on December 2, 1899, w^hereby the 
Samoan Islands were divided between the United States and Ger- 
many.® The Canal Zone was transferred to the United States ''for 
use in perpetuity" by the convention with the Republic of Panama, 
signed November 18, 1903. The West Indian islands formerly owned 
by Denmark, namely, St. Thomas, St. Croix, and St. Jolm, were 
acquired by the United States from Denmark by purchase by the 
treaty signed August 4, 1916. 

AREA AND POPULATION. 

The following table presents the latest available statistics of the 
area and population of the noncontiguous territory of the United 

States : 



Table 1. — Area and population of tlw United States and noncontiguous territories. 



Territory. 


Area. 


Population. 


Continental United States 


Sq. miles. 

3,026,789 

590, 884 

6,449 


Year. 
I 1920 




Alaska 


105,708,771 


Hawaii . . . . 






Total United States 


3,624,122 












Philippines 


115,026 

3,435 

210 

77 

436 

149 


1918 
1920 
1920 
1920 
1920 
1917 


10,350,640 
1 297 772 


Porto Rico .... 


Guam 


13, 275 

8,056 

22,858 

26,051 


American Samoa ...... 


Canal Zone , 


Virgin Islands 




Total colonies. 


119, 333 




ll,7l8,-652 




Grand total 


3,743,455 




117 427 423 







« Except Wake, Midway, Howland, Baker, and Guano Islands, which, because of their lack of impor- 
tance, receive no attention in this report, and of Pago Pago in Samoa, ceded to the United States in 1878. 

6 The United States purchased theislands for 5520,000,000. 

6 The harbor of Pago Pago on the island of Tutuila had been ceded to the United States as a naval and 
coaling station by the treaty with the Government of the Samoan Islands, signed January 17, 1878, but ao 
naval station was established there during the following 20 years. 



574 



COLONIAL TAEIFF POLICIES. 



COMMERCE. 

Table 2 gives a general view of the distribution of trade of the 
colonies with the United States and with foreign countries for the 
years 1900; 1913, and 1919. For the last-named year imports into 
Porto Rico from foreign countries were valued at onl;^ 7 per cent of 
the total as compared with 37 per cent in 1900. The increase in the 
total volume of trade for all the colonies is even more striking. The 
exports show a difference between ^24,000,000 for 1900 and $202,- 
000,000 for 1919, those of the Philippines alone increasing from 19 to 
113 million dollars in value, and those of Porto Rico from 4 million 
to 89 million. 

Table 2. — Distribution of trade of United States colonies, 1900, 1913, and 1919, 

[Values in thousands.] 





Fiscal 
year. 


Imports. 


E 


xports. 




Colony. 


Total. 


From United 

States. 


From foreign 
countries. 


Total. 


To United 

States. 


To foreign 
countries. 




Value. 


Per 

cent 

of 

total. 


Value. 


Per 

cent 

of 

total. 


Value. 


Per 

cent 

of 

total. 


Value. 


Per 

cent 

of 

total. 


Pliillppine Islands. . 
Porto Eico. 


1900 

1913 

11919 

1900 

1913 

11919 

1900 

1913 

11919 

2 1903 

1913 

11919 


$20, 602 
56, 327 
53, 621 

5,251 
36, 900 
73, 061 

1 
160 
447 

117 
133 

188 


%1, 658 
25, 387 
31, 949 

3,286 
33, 155 
67, 800 

1 

16 
314 

44 
23 
103 


8 
45 
60 

63 
90 
93 

100 
48 
70 

38 
17 
55 


$18, 944 
30, 940 
21, 672 

1,965 
3,745 

5,261 


92 
55 
40 

37 

10 

7 


?19, 751 
53, 683 
113,118 

4,311 
49,] 04 
89,396 

13 

37 
65 

43 
133 
95 


$3,522 
19, 849 
56,453 

2,477 
40,539 
78,320 

13 


18 
37 
50 

57 
83 

88 

100 


816,229 
33,834 
56,665 

1,834 
8,565 
11,076 


82 
63 
50 

43 


Guam 


17 
12 




84 
133 

72 
110 
84 


53 
30 

62 
83 
45 






American Samoa . . . 


49 

9 
133 
95 


75 

21 
100 
100 


15 
33 


25 
79 














Total of all coloniess. 


1900 
1913 
1919 


25, 971 
93, 520 
127,317 


4,989 
58,641 
100, 166 


19 
63 
79 


20. 981 
34, 879 
27, 150 


81 
37 
21 


24, 118 
102, 920 
202, 674 


6.021 
60; 521 
134,917 


25 
59 

67 


18, 096 
42,399 
67, 756 


75 
41 
33 



1 Calendar year. 

2 First year given. 

8 Exclusive of the Virgin Islands, for which available figures are incomplete, 

II. Government and Making of Tariffs. 



GOVERNMENT. 



The Philippines and Porto Rico have locsi legislatures, empowered 
to enact laws dealing with local matters, including taxation and 
revenue. Executive power is in the hands of governors who are 
appointed by the President and who have partial veto power over 
legislation. Veto power is also exercised by the President of the 
United States or by Congress, and Congress has surrendered none of 
its authority to legislate for the possessions of the United States.'' 

1 See next subheading for further detail. 



UNITED STATES. 575 

The authority of the Phihppine Legislature rests on the act of 
Congress of August 29, 1916, which restricts its power to enact 
financial and fiscal legislation by the following provisions: That the 
bonded indebtedness shall not exceed $15,000,000 in addition to 
debt incurred in the purchase of church lands; that no export duties 
shall be levied; that the trade relations of the United States and 
the Philippines shall continue to be governed exclusively by laws of 
the United States Congress; and that amendments to the Philippine 
tariff shall not become operative until approved by the President. 
Congress has also enacted legislation applying to the Philippines in 
a number of instances, and such legislation supersedes any con- 
flicting Philippine legislation. With these limitations the Philippine 
tariff upon foreign goods is now made wholly by the local authorities. 

In Porto Rico the authority of the legislature is derived from the 
act of Congress of March 2, 1917. This act grants the legislature 
all local legislative power, subject, however, to important reserva- 
tions, especially with reference to tariff matters. Thus export 
duties are specifically prohibited; import duties are not named in 
the list of taxes which the legislature is authorized to levy; bonded 
indebtedness is limited to a maximum of seven per cent of the assessed 
value of property; the provisions relating to the tariff in the act of 
Congress of April 12, 1900, and all other United States laws appli- 
cable to Porto Rico not inconsistent with the provisions of the act 
tinder discussion, are continued in effect. 

The other colonial territories enjoy no independent civil govern- 
ment. Guam, American Samoa, and the Virgin Islands are gov- 
erned by naval officers who report solely to the Navy Department. 
The government of the Panama Canal Zone was placed by the 
President, under authority of the act of August 24, 1912, in the 
hands of a governor appointed by the President and reporting to 
him. 

MAKING OF TARIFFS. 

The act of August 29, 1916, empowers the Philippine Legislature, 
among other things, to enact fiscal legislation for local purposes, but 
subject to the provisions that the trade relations of the United States 
and the Philippines shall continue to be governed exclusively by laws 
of the United States Congress, and that amendments to the Philippine 
tariff shall not become operative until approved by the President, 
and subject also to the general veto power of the governor appointed 
by the President and to the higher legislative power of the United 
States Congress. The tariff at present in force on imports into the 
Philippines v/as drawn up in 1909 by the Philippine Commission, and, 
revised and enacted by Congress, it continues with practically no 
change to the present time. 

Export duties were levied in the Philippines by the acts of the 
Philippine government and of Congress, until they were repealed by 
the act of Congress of October 3, 1913. The act of August 29, 1916, 
moreover, stipulates that no export taxes shall be levied by the 
Philippine Legislature. 

In Porto Rico the general LTnited States tariff acts of 1909 and 
1913 were made to appl}'- in their entirety. The act of March 2, 1917, 
on which the legislative authority of Porto Rico rests, not only con- 



576 COLONIAL TARIFF POLICIES. 

tinued in effect the provisions of the act of Congress of April 12, 1900, 
which dealt with the customs duties on imports into Porto Hico, but 
specifically withholds from the Porto Rican Legislature the authority 
to levy export duties. Congress accordingly retains complete con- 
trol over the customs of Porto Rico. 

For Guam and American Samoa, legislative authority with regard 
to all tariffs has been exercised solely by the naval governors of the 
islands, subject to the approval of the Navy Department,^ and 
Congress has never enacted any tariff legislation for them. In the 
case of American Samoa, article 3 of the treaty between the United 
States, Great Britain, and Germany, signed December 2, 1899, 
which provides for equal treatment of the commerce and shipping 
of the signatory powers in the Samoan Islands, restricts the power, 
however, of the naval governor to establish discriminatory duties. 

In the Canal Zone all legislative authority, including the power to 
levy taxes, is vested in the governor. His power over import duties ^ 
was, however, restricted within narrow limits by the treaty of Novem- 
ber 19, 1903, with the Republic of Panama, and was completely 
nullified in consequence of the executive agreement with the Republic 
of Panama of December 3, 1904. 

As for the Virgin Islands, the act of March 3, 1917, providing for 
their government, reserves to Congress all authority over tax legis- 
lation by stipulating for the free admission of American products, 
for ail increase in the export tax on sugar, and, in other particulars, 
for the continuance of the tax laws then in force in the islands until 
otherwise provided by Congress. 

III. Colonial Tariff Policy and System — Summary. 

TREATY provisions BEARING ON THE COLONIAL TARIFF POLICY OF THE 

UNITED STATES. 

As far as agreements with foreign countries are concerned, only 
four treaties have had bearing on the tariff relations of the United 
States with its colonies; the treaty of peace with Spain of December 
10, 1898, the convention signed December 2, 1899, between the 
United vStates, Germany, and Great Britain, dealing with Samoa, the 
treaty of 1903 and the Executive agreement of 1904 with the Republic 
of Panama, dealing with the question of customs taxation in the 
Canal Zone. 

Fkst. By the treaty of Paris signed December 10, 1898, the United 
States was, for 10 years, to ^^ admit Spanish ships and merchandise to 
the ports of the Philippine Islands on the same terms as ships and 
merchandise of the United States." 

Second, The convention of December 2, 1899, between the United 
States, Germany, and Great Britain, for the partition of the Samoan 
Islands between the United States and Germany, provides in article 3 
for equal commercial and shipping advantages in the Samoan Islands 
for the signatory powers, and contains no provision for the termina- 
tion of the agreement. Article 288 of the treaty of peace with 

8 American Samoa, a general report by the governor, Washington, 1916, p. 10. 

9 The governor's power includes that of levying export duties, but none have been levied. 



UNITED STATES. 577 

Germany signed June 28, 1919/^ stipulates that the special rights and 
privileges granted to Germany by article 3 ^^ of the convention of 1899 
shall be considered to have terminated on August 4, 1914. The 
treat}^ continues in effect, however, in so far as the United vStates and 
Great Britain are concerned. 

Third. Article 13 of the treaty signed November 18, 1903, with the 
Republic of Panama, authorized the United States to import into 
Panama free of all customs or other charges, materials and equipment 
of all kinds for the construction of the canal and all provisions, medi- 
cines, clothing, supplies, and other things ^^ necessary and convenient" 
for the officers and employees of the United States and their families. 

Fourth. F/hen later the Canal Zone government attempted to 
collect duties on imports from foreign countries of articles other than 
those specified in article 13 of the treaty of 1903, the Republic of 
Panama protested the authority of the United States officials to levy 
import taxes in the Canal Zone. The controversy was settled by an 
Executive agreement of 1904 with the Republic of Panama, according 
to which the Canal Commission may not levy duties, tolls, or fees 
upon imports. The agreement was confirmed by Executive order 
of the President of the United States of December 3, 1904,^^ and, with 
an unimportant proviso, continues in effect. 

The agreement of 1904, together with the treaty of 1903 resulted 
in the preferential admission, free from the duties imposed by Panama 
of articles imported by the American officials for the use of officials, 
employees, and their families, and of coal and fuel oil for passing ships. 
The preferences so established are peculiar, however, in two respects : 
the nationality of the goods so admitted does not affect their right to 
free admission, and the preferential character of the free admission 
is the result of the imposition of duties on other imports by the 
Republic of Panama and not by the American authorities. 

THE INSULAR CASES. 

Soon after the acquisition of the Philippines and Porto Rico the 
tariff relations between the new possessions and the United States 
became the subject of serious controversy. The first important cjues- 
tion, settled in 1901,^^ was whether imports from the colonies were, 

under the terms of the tariff act of 1897, dutiable as coming from a 
foreign country. The Supreme Court decided that the colonies are 
not ''foreign'^ territory. Accordingly, when Congress imposed 
special duties on imports from these Territories, the measure was 
challenged as a violation of the clause in the Constitution providing 
for uniformity in all imposts, duties, and excises throughout the 
United States. In the test case of Downs v. Bidwell, by a decision 
of five to four, the court declared that since, under the intent of the 

10 But not ratified by the United States. 

" Article 3 is as follows: '•' It is understood and agreed that each of the three Signatory Powers shall con- 
tiiiue to enjoy, in respect to their commerce and comtnercial vessels, in all the islands of the Samoan group 
privileges and conditions equal to those enjoyed by the Sovereign Power, in all ports which may be open 
to the commerce of either of them." 

12 Report of Isthmian Canal Commission, 1904, p. 63. 

13 De Lima v. Bidweil, 182 U. S. 244; Fourteen Diamond Rings, 183 U. S; 176. It follows from the judi- 
cial decisions and the legislation in force that the expression "imports from the colonies" is not technically 
correct and the use of the terms import, export and reexport should be confined to discussions of trade 
\7ith foreign countries. But in this study the convenience o f the ordinary uses has been nreferred to the 
circumlocution required by strict accuracy and found for instance in the section of the tafifl' law defining 
relations with the Philippine Islands. 



578 COLOXIAL TARIFF POLICIES. 

Constitution, 'the colonies vrere ^^unincorporated/' ^^ territory, 
"appurtenant to" the United States, the clause regarding uni- 
formity of duties does not apply to them. Congress, therefore, has 
the power to draw up distinct tariff schedules for the colonies, and to 
impose duties on their products entering the United States. 

AMERICAX COLOXIAL TARIFF POLICY. 

Formal definition of the United States policy regarding colonial 
tariff relations has never been formulated. But examination of the 
tariff relations of the United States with its colonies and territories 
discloses the fact that assimilation of tariffs has been established 
wherever the obstacles are not great and that where obstacles, 
temporary or permanent, exist, assimilation is carried as far as 
possible. This generalization remains true, even though only in the 
cases of Hawaii and Alaska, which are not here classed as colonies, 
and of Porto Kico, has complete assimilation of tariffs been actually 
effected. 

The obstacles just mentioned are of two kinds: First, treaty obliga- 
tions for the open door as in American Samoa, or conventional 
restrictions on the legislative authority of the United States to tax 
imports into its possessions, as in the Panama Canal Zone; and second, 
the inexpediency of burdening the consumers in a possession with 
the relatively high duties of the United States tariff, devised to protect 
American producers against foreign competition, and constructed 
without special consideration of colonial interests. These, it is to 
be noted, are obstacles in the way of the general establishment of the 
sam_e duties ori foreign goods imported into the colonies as are levied 
on similar goods imported into the United States. The larger colonies 
accjuired by the L^nited ^States as an incident of the war with Spain 
are important sugar-producing countries, arid the Philippines and 
Porto Rico are important producers of tobacco also. The opposition 
of the domestic producers of these products was a substantial factor 
contributing to prevent the free admission of colonial products into 
the United States, but Idter the natural desire to strengthen the 
commercial relations with the newly accjuired territories, and the 
obvious injustice of a system which would establish the preferential 
free admission of American products into the colonies, but would not 
grant in return the free admission of colonial products into the United 
States, led to the establishment either of tariff assimilation or of 
reciprocal free trade in every case in which American products were 
given free admission. 

It is nov7 the uniform practice of the United States to admit the 
products of its colonies and possessions into the United States free of 
duty, even where a treaty obligation prevents the preferential free 
admission of American products into the colony. The Canal Zone 
now stands out as the sole exception to this rule, and in the case of 
products of the Canal Zone, the imposition of duties upon their im- 
portation into the United States, although originally determined by 
specific congressional legislation, now rests upon an opmion of the 
Attorney General that the Canal Zone is not a "possession of the 

14 1, e., as distinguished from the territory "incorporated" in the Union, the inhabitants of which have a 
differentstatus.politically,fromthoseintheiinincorporated territories. See Willoughby, W. W., On the 
Constitution, voJ. Ij 406 fi. 



UNITED STATES. 579 

United States" within the meaning of the tarijff act of 1909. The 
free importation of all products of Samoa and Guam would, how- 
ever, be left to the discretion of the President, by the enactment 
without amendment of Title IV, section 401 (p) of the general tariff 
bill of 1921 (H. R. 7456), which reads as follows: 

The term ''United States" means the United States and any territory, or other 
places subject to the jurisdiction thereof, except the Philippine Islands, the Virgin 
Islands, the Islands ol Guam and Tutuila (American Samoa), and the Panama Canal 
Zone, which for the purposes of this act, except as otherwise provided by law, or as 
ordered by the President, shall be treated as foreign countries. 

This provision formed part of the administrative code proposed by 
the Tariff Commission in 1918, and was expected to pass as a separate 
act. In the absence of further legislation or an order by the Presi- 
dent, this provision of Title IV would give the general tariff act an 
effect not contemplated unless the word title be substituted for the 
word act in the phrase ^'for the purposes of this act'^ — a substitu- 
tion which the Tariff' Commission has recommended. 

TARIFF SYSTEM. 

IMPORT DUTIES IN THE COLONIES. 

American products are admitted free of duty into the Philippines, 
Porto Rico, Guam, and the Virgin Islands. Foreign products im- 
ported into Porto Rico pay the rates of the regular United States 
tariff', while the other Territories just mentioned have their own in- 
dividual schedules of duties for foreign goods. In American Samoa 
all imports pay uniform rates regardless of their origin. 

EXPORT DUTIES IN THE COLONIES, 

Export duties, which are prohibited in the United States by the 
Constitution,^^ are prohibited in the Philippines by the act of Congress 
of August 29, 1916, and in Porto Rico by the act of April 12, 1900. 
Likewise, no export duties are levied in Guam, American Samoa, and 
the Canal Zone. Only in the Virgin Islands, of all the possessions of 
the United States, does an export duty prevail — on sugar, cotton, 
sirup, rum, and cotton seed in St. Croix, and on sugar, rum and mo- 
lasses in St. Thomas and St. John, levied alike on exports to the 
United States and to foreign countries. 

INTERNAL-REVENUE TAXES. 

All of the colonies have sj^stems of internal taxation separate and 
distinct from the American system. But in the trade between the 
United States, the Philippines, Porto Rico, and the Virgin Islands, 
internal-revenue taxes are levied only in the country of destination. 
The internal revenue taxes in the United States on the products of 
the Philippines, Porto Rico, and the Virgin Islands imported into 
and consumed in the United States are turned over to the treasuries 
of the respective colonies. 

There are no provisions for the exemption from internal revenue 
taxation in either country of the products passing between the United 

15 Article I, sec. 10, par. 2: No State shall, without the consent of Congress, lay any impost or duties on 
imports or exports except what may be absolutely necessary for executing its inspection laws: * * * 
and all such laws shall be subject to the revision and control of Congress. 

Article I, sec. 9, par. 5 (limitations upon the power of Congress): No tax or duty shall be laid on 
articles exported from any State. 



580 ■ COLOXIAL TAEIFF POLICIES. 

States and Guam, American Samoa, and the Canal Zone, and the 
proceeds of such taxes accrue to the treasury of the country or colony 
in which thej are leyied, 

TREATMENT OF SHIPMENTS TO THE UNITED STATES FROM THE COLONIES. 

Products of any of the Territories or possessions of the United 
States are admitted into the United States free of duty, with the 
exception of imports from the Canal Zone, which by the act of March 
3, 1905, and according to a subsequent opinion of the Attorney 
General, are subject to the same rates as imports from foreign coun- 
tries. 

PROVISIONS WITH RESPECT TO COASTWISE TRADE. 

The provisions of American shipping laws which restrict the coast- 
wise trade are now applicable to Porto Rico, but not to the other 
colonies. The act of Congress of July 5, 1920, provides, however, 
for the application of these laws from and after February 1, 1922, 
to the island Territories controlled by the United States not now 
covered thereby, and provides for the further postponement of the 
application of these laws to the Philippines, at the discretion of the 
President, until adequate shipping facilities under the American 
flag have been established. 

IV. Tariffs of the Coloxies Individually. 

THE PHILIPPIXES. 

AREA AND POPULATION. 

The Philippine Ai'chipelago, extending in a chain 1,100 miles from 
north to south, parallel to and 500 miles southeast of Asia, consists 
of approximately 3,140 islands, of which 2,775 are less than 1 square 
mile in area. The total area of the islands is approxim^ately 115,026 
square miles, of which the 11 largest islands represent 90 per cent.^^ 

The population, according to the census of December 31, 1918, is 
10,351,000,17 of whom 855,000^7 are classed as ''non-Chi'istians.'' ^^ 
The total includes 45,000 Chinese, 6,700 Japanese, 6.400 Americans^ 
4,0p0 Spanish, and 1,100 British. In 1903 42.6 percent of the popu- 
lation were classified as Visayans, 19.3 per cent as Tagalogs, and 
10,6 per cent as Ilocanos, the remainder being either foreign-born 
or scattered among a host of other tribes. 

COMMERCIAL IMPORTANCE. 

Commercially by far the most important of the possessions con- 
trolled by the United States, the Philippines are distinguished 
chiefly for their argicultural resources. The rich tropical soil yields 
principally coconuts (marketed as copra and coconut oil), manila 

16 The islands are mainly of volcanic origin, and aU of them are mountainous in^;he interior. The whole 
of the archipelago is periodically disturbed by hurricanes whach cause great devastation. Earthquakes 
are also frequent. .(XJ. S. Depf. of Commerce and l^abor, Bureau of Foreign and Domestic Comm.erce, 
Special Agents Series, No. 67, p. 78.) 

1' Preliminary figures from the report of the. Governor General, 1919, p. 19. 

18 Those classed as "non-Christians'' in 1918 were classed in 1903 as "wild and uncivilized," although 
they were not without some knov.dedge of the domestic arts. 



UNITED STATES. 



581 



fiber (abaca) /^^ sugar, and tobacco. In manufactures, textiles, 
women's band-made and hand-embroidered wearing apparel, and 
embroideries are produced in considerable quantities. The chief 
imports, in the order of their importance, are cotton goods, iron and 
steel products, meat and dairy products, rice, wheat fiour, coal, 
illuminating oil, leather goods, and automobiles. 

Table 3 exhibits the values of the principal exports and of total 
exports by principal countries for the calendar years 1913, 1918, 
and 1919. 



Table S. — Total exjwrts hy country of destination and principal articles exvorted f. 
the FhUippine Islands, 1913, 1918, and 1919} 

(a). TOTAL EXPORTS. 



rom 



Country of destination. 


Value in 1 


thousands of dollars. 


Per cent to specified 
country. 




1913 


1918 


1919 


1913 


1918 


1919 


United States 


16, 434 
9,069 
5,483 
3,925 
3,179 
2,453 
1,742 
1,646 
3,842 


89, 147 

19, 482 
1,242 
7,968 
5,008 
3,463 


56, 653 
16, 015 
4,126 
7,033 
7,198 
3,928 


34.4 
19.0 
11.5 

8.2 
6.7 
5.1 
3.6 
3.5 
8.0 


6.5.9 
14.4 
.9 
5.9 
3.7 
2.6 


50.1 


United Kingdom , . . . . 


14.2 


France 


3.6 


Japan 


6.2 


Hongkone; . . . 


6.4 


Spain 


3.5 


Germany 




Cliina 


3,249 
5,635 


3,787 
14, 378 


2.4 
4.2 


3.3 


All other countries . . . 


12.7 






Total... 


47, 773 


135, 194 


113, 118 


100.0 


100.0 


100.0 







(&) PRINCIPAL EXPORTS. 



Article. 


Value in 


thousands of dollars. 


Percent of total. 


1913 


1918 


1919 


1913 


1918 


1919 


Manila . . „....i.. = ooo. = .. 


21, 121 
9,546 
1,146 
7, 033 
3,012 
1,955 
591 
176 
3,193 


58, 192 
5,189 
31, 664 
15, 804 
7,126 
6,459 
1,868 
2,160 
6,732 


26, 852 
4,420 
36, 860 
15, 208 
9,079 
6,616 
1,252 
3, 457 
9, 374 


44.2 

20.0 

2.4 

14.7 

6.3 

4.1 

1.2 

.4 

6.7 


43.0 
3.8 
23.4 
11.7 
5.3 
4.8 
1.4 
1.6 
5.0 


23.7 




3 9 


Coconut oil o . = ... . 

Sugar 


32.6 
13.4 


Cigars. * .. ...= 


8.0 


Cigarettes and other tobacco 


5.9 


Maguey . . 


1. 1 


Embroideries , 


3.1 


Ail other ' . . 


8.3 






Total 


. 47,773 


135, 194 


113, 118 


100.0 


100.0 


100.0 







1 Report of collector of insular customs, 1919. 

isTlie abaca fiber (Musa textilis) is frequently but incorrectly called hemp (Cannabis sativa). Abaca 
belongs to the banana family and has no relation to the hemp family. Manila is a hard fiber, obtained 
mechanically by scraping or "decorticating the leaf of the plant; hemp is a soft fiber obtained by the retting 
or rotting of the stalk of the plant. 



582 



COLONIAL TAKIFF POLICIES. 



Table 4 exhibits the values of the principal imports and of the 
total imports by principal countries for the calendar years 1913, 
1918, and 1919: 

Table 4. — Total imjjorts hy country of origin and principal articles imported into the 

Philipjnne Islands, 1913, 1918, 1919.^ 

(a) TOTAL IMPORTS. 



CoLintrv of origin. 


Value in 


thousands of dollars. 


Per cent to specified 
country. 




1913 


1918 


1919 


1913 


1918 


1919 


United States 


26,676 
5,376 
3,393 
2,888 
2,708 
2,678 
2,185 
1,448 
1, 239 
665 
4,057 


58. 825 

2,764 

13, 104 

33 

6,978 

3,694 

6,577 

807 

467 

1,940 

3, 410 


75, 491 
2.541 

11,609 
367 
4,014 
4,528 
7,155 
1,585 
936 
1,997 
8,416 


50.0 
10.1 
6.4 
5.4 
5.1 
5.0 
4.1 

11 

1.3 

7.6 


59.7 

2.8 

13.3 

........ 

3.7 
6.7 
.8 
. 5 
2.0 
3.4 


63 6 




2 2 


Japan 


9 8 


Germanv 


.3 




3 4 


\iistrala'^ia 


3 8 


CMna- 


6 


France 


1 3 




.8 


British East Indies 


1 7 




7. 1 






Total 


53, 313 


98, 599 


118,639 


109 ; inn 


100 











(5) PRINCIPAL IMPORTS. 



Article. 



Value in thousands of dollars. 



1913 



1918 



1919 



Per cent of total. 



1913 



1918 



1919 



Cotton, and manufactures of 

Iron and steel, and manufactiu-es of . . . 

R ice 

Meat products 

Wheat tiour. 

Coal 

Illuminating oil 

Other oils 

Automobiles and parts, including tires 

Leather, and manufactures of 

Silk, and manufactm'es of 

All other 

Total 



11,844 
8,614 
3, 165 
2,053 
1.899 
1,584 
1,268 
845 
1,263 
1,053 
8:36 

18,889 



53,313 



29,008 
12,254 
8;217 
2, 064 
3,017 
2.331 
1^213 
1,584 
3.263 
2.086 
2, 864 
30, 698 



19,322 
22,368 
4,409 
2,411 
4,465 
3,891 
3,339 
3,779 
4,802 
2,880 
2,494 
44,479 



118,639 



'>^ 2 


29.4 


i'6.1 


12.4 


5.9 


8.4 


3.9 


2.1 


3.5 


3.1 


3.0 


2.4 


2.4 


L2 


1.6 


1.6 


2.4 


3.3 


2.0 


2.1 


1.6 


2.9 


35.4 


31.1 


100.0 


100.0 



16.3 
18.9 
3.7 
2.0 
3.8 
3.3 
2.8 
3.2 
4.0 
2.4 
2.1 



100.0 



1 Report of collector of insular customs, 1919. 

The statistics in Table 5 indicate the grovv'ing share of the United 
States in the import trade of the Philippines since the acquisition of 
the islands : 

Table 5. — Share of the United States in imports into the Philippine Islands. 





Total 
imports 

(thou- 
sands of 
dollars). 


Imports from the 
United States. 


Year. 


Thou- 
sands of 
dollars. 


Per cent 
of totaL 


18931 


15, 890 
20,255 
29, 186 
53,313 
49,312 
65, 797 
118,639 


956 
1.351 
5,101 

26,676 
26,381 
37,621 
75,491 


6 


1899 1 


7 


1908 2 


17 


1913 3 . 


50 


1915 2 


53 


1917 2 


57 


1919 < 


64 







1 v. S. Bureau of Insular Affairs, Monthly Summary of the Commerce of the Philippines, July, Aug., 
?ept., 1899. 

2 Report of the Chief of the Bureau of Insular Affairs to the Secretary of War, 1918, p. 7. 

3 Philippine Bureau of Customs, Foreign Commerce of the Philippine Islands, 1913 and 1914. 
* Report of the Chief of the Bureau of Insular ASairs, 1920, p. 19. 



UNITED STATES. 583 

ACQUISITION AND GOVERNMENT. 

The Philippines were acquired by the United States as a result of 
the War with Spain which began on April 21, 1898. On August 13, 
1898, the city of Manila was occupied by American military forces, 
and for an interim period the government of the islands was placed 
in the hands of Army officials, subject to the President acting in his 
capacity of Commander in Chief of the Army. On December 10, 1898, 
by the treaty of peace signed with Spain, the islands came under the 
sovereignty of the United States in return for a payment of $20,000,000 . 
In 1899 President McKinley appointed a commission to investigate 
and recommend a plan for the civil government of the islands, and 
on March 16, 1900, there was created the '' Second Philippine Com- 
mission," a civil body subject to the Secretary of War, and entrusted 
with the greater part of the powers which had been hitherto exercised 
by the military commanding officer. Receiving its formal instruc- 
tions from the President through the Secretary of War on April 7, 

1900, the commission formally assumed its legislative functions on 
September 1st of the same year. 2*^ 

This government was still legally a military one, but by the 
'^Spooner amendment" to the Army appropriation act of March 2, 

1901, the exercise of military and civil powers in the islands was 
definitely separated, and the Philippine Commission was made 
subject to the President in his civil capacity and not in his capacity 
of Commander in Chief of the Army. On July 2, 1901, the President 
designated William Howard Taft, chairman of the Philippine Com- 
mission, as civil governor of the Philippines, and instructed him to 
exercise the executive authority in all civil affairs in the government 
of the Philippines hitherto exercised by the military governor. 

The next step was the passing of an organic act by Congress on 
July 1, 1902, by which the commission form of government was left 
substantially intact but which made several interesting provisions 
for the self-government of the islands. It provided, for example, 
that within two years a general election for the choice of delegates to a 
popular assembly should be held, and that, after the assembly had 
convened and was organized, the legislative power of the commission 
should be transferred to a legislature consisting of the commission as 
an^upper house and the assembly as a lower house. 

In conformity with this act, a general election was held on July 
30, 1907, on the basis of the census of 1903, and the new Philippine 
Legislature met for the first time on October 11, 1907. This regime 
continued without change until the passing of the Philippine govern- 
ment act of August 29, 1916, which is entitled '^ An act to declare the 
purpose of the people of the United States as to the future political 
status of the people of the Philippine Islands, and to provide a more 

20 As an indication of the policy of the United States toward the Philippines the following quotation 
from the instructions is of interest: 

" In all the forms of government and administrative provisions which they are authorized to prescribe, 
the commission should bear in mind that the government which they are establishing is designed * * * 
for the happiness, peace, and prosperity of the people of the Philippine Islands, and the measures adopted 
should be made to conform to their customs, their habits, and even their prejudices, to the fuUest extent 
consistent with the accomplishment of the indispensable requisites of just and efiective government." 



584 COLONIAL TAEIFF POLICIES, 

autonomous goYernment for those islands. "^^ By its provisions the 
supreme executive power is vested in the Governor General, appointed 
by the President vfith the advice and consent of the Senate. An 
elective legislature consisting of a senate and a house of representa- 
tives enact the laws which are reported to the Congress of the United 
States and which can be annulled by that body. The Governor 
General has the power of veto, but in case a law is passed upon 
reconsideration after his veto by a two-thirds majority in each house, 
and the Governor General still disapproves of it, the measure is 
referred to the President of the United States, who is possessed of 
an absolute veto power. Congress also reserves to itself complete 
power to legislate directly for the Philippines. 

Beyond the veto powers described above and limitations intended 
to secure a bill of rights for the inhabitants of the Philippines, the 
Philippine Legislatui-e is further limited in its power to enact finan- 
cial and fiscal legislation by the provisions that no export duties shall 
be levied; that the trade relations of the United States and the Philip- 
pines shall continue to be governed exclusively bylaws of the United 
States Congress; and that amendments to the Philippine tariff shall 
not becomxC operative until approved by the President. ^^ 



Coming under the sovereignty of the United States free from 
debt, the Philippines were allowed from the start to devise their 
own internal taxation system, with the hmitation that taxation 
must be uniform. The revenue law^s of the old Spanish regime were 
continued in force, with some modifications, however, for about 
five years after the American occupation, the changes resulting 
generally in decreases in revenue. During the fiscal year 1896-97, 
for example, the Spanish had collected 12,000,000 pesos by internal 
taxation, whereas in 1902-3 internal taxation yielded less than 
4,500,000 pesos.23 

In 1904 the commission abolished much of what remained of the 
Spanish tax regime and an internal-revenue law of that year substi- 
tuted an elaborate system of excise, license, stamp, and business 
taxes. This was revised in 1914, amended in the next year^ and 
incorporated in the Administrative Code enacted in 1916, which is 
still in effect. 

Moreover, the United States income-tax legislation of 1913 and 
subsequent years was made applicable to the Philippine Islands, 
but with the provision that all revenues collected under this legis- 
lation in the Philippines should accrue to the insular treasury. 

21 The preamble, significant as an enunciation of the general policy of the United States toward the 
Philippines, is as follows: 

' ' y/hereas it was never the intention of the people of the United States in the incipiency of the War with 
Spain to make it a war of conouest or for tei-ritorial aggrandizement; and 

"Whereas it is, as it has alwaj'^s been, the purpose of the people of the United States to withdraw their 
sovereignty over the Philippine Islands and to recognize their independence as soon as a stable govern- 
ment can be established therein; and 

' ' Whereas for the speedy accomphshment of such purpose it is desirable to place in the hands of the people 
of the Phihppines as large a control of their domestic affairs as can be given them without, in the mean- 
time, impairing the exercise of the rights of sovereignty by the people of the United States, in order that, 
by the use and exercise of popular franchise and governmental powers, they may be the better prepared 
to fully assume the responsibilities and enjoy ail the privileges of complete independence." 

22 That the bonded indebtedness of the Philippines, in addition to debt incurred in the purchase of 
church lands, must not exceed $15,000,000, was a further stipulation. An act of July 21, 1921, raised the 
Limit of indebtednes from §15,000,000 to S30,000,000. 

23 Elliott, Charles B.: The Philippines (to the End of Commission Government), p. 149. 



Ul^ITED STATES. 585 

The Philippine government act of August 27, 1916, authorizes the 
legislature of the islands to change in any way all laws relating to 
revenue and taxation in effect on that date. It specifically author- 
izes taxes and assessments on property, license fees for franchises 
and privileges, and internal taxes, direct or indirect. The principal 
sources of revenue and the chief expenditures in 1919 are shown in 
Table 6. The item '^ Licenses and business tax" includes the cedula 
or poll tax of 1 peso on each male inhabitant over 18 and under 60 
years of age, with certain exem_ptions, and the 1 per cent tax on the 
gross sales of merchants. The excise taxes fall on goods imported 
or produced for domestic consumption, namely, liquors, tobacco, 
cigars and cigarettes, m.atches, skin:imed milk, mineral oils, coal, 
coke, cinematograph films, and playing cards. The income tax in 
the Philippine Islands is collected under the laws enacted by Con- 
gress, but the revenue is used locally. 



Tabls 6. — Income and expenditures of the Philippine goremment, 1919. 



24 



INCOME. 

Fiscal year 1919. 

Revenue from taxation F45, 229, 969. 10 

Licenses and business tax , TYI , 010, 920. 10 

Excise tax 14, 179, 448. 05 

Import duties 10,975,079.57 

Income tax. , 3, 405, 683. 30 

Wharfage tax....... 1,090,972.71 

Documentary tax. 856,681.76 

Internal revenue apportioned to local govern- 
ments 24a (3^ X64, 083. 55) 

Incidental revenue 3, 706, 882. 42 

United States internal revenue 2, 405, 157. 80 

Revenue from public forests. 741, 661. 00 

Fines and forfeitures 499, 677. 58 

Earnings and other credits „ 30, 417, 127. 55 

Operating revenue of commercial and indus- 
trial units 24, 105, 230. 75 

Dividends on bank stock......... 653,242.48 

Income incidental to functional activities. .... 3, 558, 837 . 14 

Sales of friar lands real estate 904, 960. 15 

Sales of agricultural bank loans 542, 389 . 62 

Another 332,944.13- 

Total. 79, 686s 923. 20 

EXPENDITURES. 

Revenue service. 15, 561, 797. 78 

Expense of revenue collection. 1, 516, 514. 14 

Operating expense of commercial and indus- 
trial units. 14, 045, 283 . 64 

Debt service 2, 276, 517. 71 

Interest on public debt. 1, 295, 276. 00 

Payments to sinking funds. 916, 241, 71 

General welfare service. ...... 48, 719, 621, 23 

Legislation 1, 090, 609 . 73 

Executive direction and control 1, 841, 692. 75 

Adjudication 1, 849, 726. 38 

National defense..... ....... 2,648.669.66 

Law and order. 4, 523, 874. 09 

Public health. 3,807,347.06 

Public education. 6, 157, 531. 78 

Public corrections 1,025,259.83 

2< Report of the Governor General^ 1919. 24a item to be deducted. 



586 COLOXIAL TARIFF POLICIES. 

General welfare service — Continued. Fiscal year 1919 

Public charities F452, 699.99 

Conservation of natural resources 459, 363. 73 

Development of commerce 2, 773, 012. 91 

Development of agriculture 2, 945, 871. 27 

Philippine publicity .- 500, 361. 12 

Development of industrial arts and sciences. . . 339, 287. 60 

Other economic development 3, 773, 714. 60 

Aid to local governments 14, 109, 628. 43 

Outlays and investments P19, 378, 438. 40 

Purchase and construction of public works 3, 507, 986. 26 

Purchase and construction of equipment 1, 339, 791. 83 

Corporate investments. 13, 846, 740. 31 

Advances to railway companies under guaranty 

contracts 683, 920. 00 

Extraordinarv charges, retirement gratuities, 

act 2589. . ."' 806, 014. 27 

All other 806, 214. 26 

Total expenditures 86, 742, 589. 38 

Decrease in current surplus for the year (7, 055, 666. 18) 

Add current surplus at the beginning of the year. . 35, 598, 744. 53 

Current surplus at the end of the year 28, 543, 078. 35 

The proYincial and municipal goYernments share in the proceeds of 
the taxes imposed by the central government and also exercise taxing 
povrer under grants of authority from the legislature. 

The financial policy of the insular government has generally been 
conservative. From 1907 to 1914 there were, Vvith the exception of 
one year, annual excesses of expenditure over revenue, but these were 
due to increased expenditures for capital improvements, and the 
deficits were not large. Since 1914, revenue has exceeded expendi- 
ture in each year except 1919. The Philippines have paid their o^\ti 
way and the United States has had to meet no deficit incurred by the 
Philippine government; but in accordance with a provision of the 
acts of 1902 and 1916 all internal revenue collected upon products of 
the Philippines under the internal-revenue law of the United States 
is turned over to the Philippine treasury. For the fiscal vears ending 
June 30, 1918, 1919, and 1920, the sums of $803,900, $1,120,500, and 
$1,425,300, respective^, were turned over.^^ The United States also 
supports certain military expenditures in the Philippines; and during 
the period through which customs duties were collected in the United 
States upon products of the Philippines the proceeds of these duties 
were turned over to the Philippine treasury.^^ 

On June 30, 1920, the total bonded indebtedness of the Philippines, 
including the bonded indebtedness of the cities of Manila and Cebu, 
amounted to only $20,125, 100.^'^ 

It is to be noted that the customs revenue in 1915 provided approxi- 
mately 44 per cent of the total revenue and in 1919 only 24 per cent 
of the revenue derived from taxation.^^ In the years preceding the 
enactment of the Colton Act of 1909, which provided for the free 

25 Report of United States Commissioner of Internal Revenue, 1919, p. 131; 1920, p. 101. Of articles sub- 
ject to internal-revenue taxes, tobacco products alone are imported from the Philippines. The duties are 
collected by affixing stamps, which is now done almost exclusively in the Philippines. 

stiButseep. 593. 

27 Report of the Bureau of Insular Affairs, 1920, p. 21. But since Jime 30, 1920, the issuance of gold cer- 
tifieates and bonds for public works considerably increased the debt and brought it nearly to the maxi- 
mum permitted by existing legislation, and the maximum was increased as stated in note 22, aboTe. 

2- Report of the Governor General of the Philippine Islands, 1919, p. 109. 



UNITED STATES. 587 

admission of American products into the Philippines, the customs 
revenue furnished over 70 per cent of the total revenue. 

TARIFF OF THE PHILIPPINES. 

HISTORY OF THE PHILIPPINE TARIFF. 

TJie tariff under the Spanish regime. — When the United States 
assumed control of the Philippine Islands in 1898, the tariff system 
which Spain had maintained there was not at once swept away, but 
was modified from time to time, until gradually a new policy was 
evolved. All preferences to Spanish products were of course elimi- 
nated, but in important respects the American program was for a 
number of years conditioned by the old Spanish customs. It is neces- 
sary, therefore, to consider briefly the tariff arrangements which 
Americans found in the Philippines when they took possession. 

The duties assessed at Philippine ports were very complex in 
nature. ^^ The original basic system of specific duties, dating from 
far back in the nineteenth century, had been modified by a succession 
of royal decrees. One of these provided that an additional duty of 
10 per cent of the old tariff rates should be imposed; another estab- 
lished an additional 2 per cent ad valorem duty, and another pro- 
vided for a further addition of 8 per cent ad valorem to the duties 
already current. These ad valorem duties v/ere determined, how- 
ever, not according to actual values, but according to the ''official 
values," an arbitrary table of values designed for use in Spain and 
later applied also to the Philippines. These various duties were 
not consolidated and expressed as a single rate, but were computed 
separately and then added together in the case of each importation 
to determine the total duty which should be paid. The purpose of 
this tariff was the raising of revenue, and the average duty was not 
exorbitant, but the duties on necessities were generally unduly high, 
while luxuries were lightly taxed. Such an apportionment was in 
conformity with Spanish ideas as to the most efficacious means of 
raising revenue.^^ 

Spain enjoyed preferential treatment in the Philippine ports, with 
additional preferences for imports in Spanish vessels. That is, while 
the total duties assessed upon foreign goods were in many cases very 
high, Spanish goods were admitted at a uniform ad valorem rate of 
10 per cent. 2^ Export duties were levied also on principal articles: 
For example, 37 J cents per 100 kilos on manila; 5 cents per 100 kilos 
on sugar; from $1 to $1.50 per 100 kilos on tobacco, raw and manufac- 
tured; and similar rates on rice, indigo, and fresh and dried coconuts. 

In turn, the products of the islands received preferential treatment 
in the Spanish market. ^^ The Spanish law of 1882 provided that all 
the products of Cuba, Porto Rico, and the Philippines should be 
admitted free into Spain except tobacco, rum, sugar, cacao, choco- 
late, and coffee. All of these except tobacco were given a special pref- 
erential rate from Cuba and Porto Rico, and a rate from the Philippines 
less by four-fifths than the rate from the other two colonies. After 

29 The Spanish tariff is described in 57th Cong., 1st sess., S. Doc. No. 134, pp. 69-80. 
so Senate hearings on Philippine affairs, 1902, vol. 1, p. 151; statement by W. H. Taft. 
« Correspondence on Philippine tariff, 57th Cong., 1st sess., S.Doc. No. 171, pp.9, 11, 13. 
82 The facts pertaining to these preferences are quoted in translation from Alcubilla's Appendix, vol. 9, 
bj^ W. H. Taft, 59th Cong., 1st sess., S. Doc. No. 277, pp. 1208, 1209. 

185766°— 22 38 



588 coLoxiAL TAEirr policies. 

1892 these articles were admitted free into Spain, but sugars from the 
colonies were made subject to an internal tax, higher than that paid by 
the native Spanish products. The manufacture and sale of tobacco 
was a monopoly of the Spanish GoTernment, which obtained its sup- 
ply of raw tobacco from Cuba and the Philippines, and the law required 
that a certain amount of Philippine leaf should be taken annually. ^^ 

The extent of the benefit. conferred upon the Philippines by these 
preferential rates has been a matter of much controversy. Much 
was said, for instance, by the Philippine Commission and others 
interested in securing lower rates into the United States for Piiilip- 
pine products, concerning the loss due to American possession, and 
the consequent cessation of the Spanish preferences. It appears, 
however, that notwithstanding the preference, Philippine sugar 
never went in large quantities to Spain. The continent of Europe 
never took as much as 2 per cent of Philippine sugar, so that in this 
case there was no market to lose.^* Spain offered the principal 
market for Philippine tobacco, both before and after the American 
occupation, though the exportation to Spain declined somewhat. 
It does not appear, therefore, that the market was adversely affected 
to any marked degree by the withdrawal of the preferential rates. ^^ 
It is possible, however, that the increased rates of duty levied hj 
Spain on Philippine tobacco after the loss of the colony may have 
reduced the price obtained for such tobacco in Spain by the Philip- 
pine exporters. ^ 

The tariff under the Lnited States railitary administration. — On July 
12, 1898, when it vs^as apparent that Manila would be taken, President 
McKinley, acting under his war powers, issued directions for the col- 
lection of duties in case of the American occupation of the city and 
the archipelago. As soon as the Americans were in possession the 
military authorities removed the preference in favor of Spain and 
simplified the system of computing the duty, introducing on Novem- 
ber 10, 1898, a single schedule of duties to replace the complex sys- 
tem of the Spanish tariff. In general, however, the old rates were 
retained."^ 

During the period from the occupation of the islands to 1901 the 
Philippines were treated as foreign territory in so far as the entrance 
of their products into the United States was concerned; and the full 
rates of the Dingley Tariff Act of 1897 were collected on the products 
of the islands. 

Tariff vrovisions in the treaty oj Paris. — In negotiating the treaty 
of Paris, signed December 10, 1898, the American commissioners 
agreed to grant Spain equality of import privileges in Philippine 
ports for 10 years. The commissioners' first statement on this subject 
was as follows : 

And it being the policy of the United States to maintain in the Philippines an 
open door to the world's commerce, the American commissioners are prepared to insert 
in the treaty now in contemplation a stipulation to the effect that for a term of years 

33 Hearings, Ways and Means Committee, 1^5, dt>. 226, 2Q7, 268; statement by W. H. Taft. 

34 Hitchcock, F. H.: Trade of the Philippines, p. 40. 

35 60th Cong., 1st sess., S. Doc. No. 484, pp. 1-10. 

36 The rates of the Spanish tariff and those estabiishe-i bv the American commission are compared iu 
the Philippine tariff, o7th Cong., 1st sess., S. Doc. Xo. 1-34. 

Correspondence relating to the Philippine tariff, 57th Cong., 1st sess., S. Doc. No. 171, p. 9. 



UNITED STATES. 589 

Spanish ships and merchandise shall be admitted into the ports of the Philippine 
Islands on the same terms as American ships and merchandise."^ 

The Spanish commissioners, undertaking to secure a more explicit 
statement as to the future American policy, inquired \ ^^ 

Is the offer made by the United States to Spain to establish for a certain number 
of years similar conditions in the ports of the archipelago for vessels and merchandise 
of both Nations, an offer which is preceded by the assertion that the policy of the 
United States is to maintain an open door to the world's commerce, to be taken in 
the sense that the vessels and goods of other nations are to enjoy or can enjoy the same 
privilege which for a certain time is granted those of Spain while the United States 
does not change such policy? 

The American commissioners replied :^^ 

The declaration that the policy of the United States in the Philippines will be that 
of an open door to the world s commerce necessarily implies that the offer to place 
Spanish vessels and merchandise on the same footing as American is not intended to 
be exclusive. But the offer to give Spain that privilege for a term of years is intended 
to secure it to her for a certain period by special treaty stipulation whatever might be 
at any time the general policy of the United States, 

Two facts stand out clearly in the congressional discussions of this 
treaty provision at the time of ratification and in later years: 

First. American statesmen did not feel in any way committed to 
the policy of the open door. Senators Lodge *^ and Newlands*^ did 
indeed advise such a policy, largely on the ground that the United 
States had given forceful enunciation to a policy of the open door with 
regard to the Far East, and that the trade of -China was of so much 
greater importance to the United States than the trade of the Philip- 
pines could ever be that it would be well to uphold the open door 
idea consistently. But in general the open-door principle was ignored, 
and in the congressional discussions of the treaty it was seldom 
referred to. On the whole, then, the limitation upon the freedom of 
action of the United States was regarded as the result of a treaty 
stipulation, rather than as the expression of a general commercial 
policy to which the United States was giving adherence. 

Second. It is clear from the discussions that it was not considered 
that the United States was bound by the treaty to grant equal treat- 
ment to nations other than Spain. In the committee hearings and 
the Congressional debates there appears no evidence of a disposition 
to acknowledge such an obligation on the part of the United States f^ 
every suggestion of discrimination in favor of American goods was 
predicated upon the assumption that such preference would be 
extended to Spain, but not to other nations. That such suggestions 
were frequent will be shown later in this report. 

TJte PJiilippine tariff act of 1901. — From the first the Americans 
found the old Spanish tariff, as revised by the military administra- 
tion, unsatisfactory and complaints regarding its operation were con- 
stantly reaching the War Department. The chief difficulty seems to 
have been that the duties on a number of articles, such as canned meat, 
vegetables and preserves, watches, condensed milk, and cotton 

foods, generally necessities at least for Europeans, were so high as to 
e practically prohibitive. This increased the cost of the articles in 

37 The treaty of Paris, 55th Cong., 3d sess., S. Doc. No. 62, pp. 21Q, 211. 

38 Ibid., pp. 216,217. 
»9 Ibid., p. 218, 

« Cong. Rec, vol. -35, p. 623. 

<i Senate hearings on Philippine revenue, 59th Cong., 1st sess., S. Doc. No. 277, p. 46. 

" Cf. statement by Senator Lodge, 59th Cong., 1st sess., S. Doc. No. 277, p. 103. 



590 COLOI^IAI. TAEIFF POLICIES. 

the Philippines and added to the inconveniences of Americans resid- 
ing there. More important from a commercial point of view, the 
high duties checked the sales of American exporters. In a number of 
instances the Spanish had fixed the duties at a prohibitive level, and 
then mitigated the effects which might be expected therefrom in the 
islands by allowing their own products to enter at much lower rates. 
But now that the preference to Spanish products was removed, there 
was no relief from the high duties. Furthermore, not only was it 
desired that Americans, in common with others, should be enabled to 
trade more freely, but it was the wish of many that a tariff should be 
devised which would confer special benefits on American interests, 
and the suggestion was repeatedly mxade that reductions should be 
confined principally to goods produced mainly in the United States. 

The general desire on the part of resident Americans for a revision 
of the tariff was expressed in a letter dated April 14, 1900, of Gen. 
Otis, the milita^r}' governor, to the War Department, in which he 
said: ^ 

I desire to say that a reduction in tariff rates on such products as are extensively- 
imported from the United States would be beneficial to the business interests of the 
country and to the Philippine people, but those products which Europe produces to a 
very large extent would reduce our revenue and give no compensating advantages. 
* * ■* Foreign merchants here would import in Spanish vessels by way of Barce- 
lona and other ports of Spain. * * * Hence, Europe would reap the advantage of 
our trade. 

In response to the general demand for a revision a commission of 
Army officers in the Philippines was designated by the War Depart- 
ment on June 19, 1900, to undertake the task. Hearings were held, 
or attempted, though it seems that the Manila business interests were 
apathetic. Meanwhile, President McKinley had sent to the islands a 
civil commission headed by ^Mr. Taft, and the work begun by the 
Army officers was turned over to this commission. Late in Decem- 
ber, 1900, the commission finished its draft, and, in accordance with 
its instructions, sent it to the War Department for approval or re- 
vision. The War Department printed the proposed tarifi' and cir- 
culated it among the trade papers, chambers of commerce, and 
manufacturers of the country with a request for criticisms and 
recommendations. 

As finally sent in by the Taft commission the schedules provided 
for a large number of reductions in duty, especially in the case of 
necessary food products, tools, machinery, and the like.** For 
example, the duty per 100 kilos was reduced on wheat flour from $1.88 
to $0.50; on unhusked rice, from $0.59 to $0.40; on husked rice, from 
$0.63 to $0.50; on ham, lard, etc., from $9.13 to $1.60; on salted meat, 
from $4.82 to $0.75; on agricultural machinery, from $1 to $0.25; on 
printing paper, from $4.30 to $L On the other hand, the duty on 
silks was raised 50 per cent, and those on patent-leather shoes, 
articles of gold or of silver set with stones, and other luxuries were 
raised considerably. The export taxes of the Spanish tarifi' were 
retained and that on raw manila was increased from 37^ cents to 75 
cents per 100 kilos on the ground that the Philippines enjoyed 
natural monopoly in this produce and the increased tax would 
consequently be paid by foreigners. 

<3 Correspondence relating to the Philippine tariff, 57th Cong., 1st sess., S. Doc. Xo. 171, p. 18. The 
letters published in this volume indicate the nature of the grievances. 
*^ A comparison with the Spanish tariff was published m 57ih Cong., 1st sess., S. Doc. Iso. 134, pp. 53-69. 



UNITED STATES. 591 

The War Department, after hearing from American business 
interests, recommended a number of changes, most of them of 
minor significance. Ad valorem rates were substituted in a number 
of cases for specific, particularly on woolens, silks, and watches, and 
they were used in other cases to supplement the specific rates. 
Other administrative changes were made, the most important being 
the reclassification of cotton goods. This was the largest single item 
of import, and the changes made here are the most prominent of a 
number of reclassifications of similar purpose.*^ The tariff as it came 
from the Philippines provided that in case linen and cotton tissues 
were weighted with earths and sizing they must be washed and dried 
before being weighed for the assessment of duty. Concerning this 
provision the president of the Cincinnati Board of Trade wrote to the 
War Department: ^^ 

American manufacturers do not size or weiglit goods, while foreign manufacturers 
do. Why not assess the goods for duty by weight without any attempt to remove the 
weighting materials? Eliminate this rule and you are performing an act of justice to 
American manufacturers of cotton prints. 

This suggestion was heeded and the provision was eliminated. It 
was also alleged that experience with the Cuban tariff proved that the 
provision assessing cotton tissues, plain and without figure, on the 
basis of 10 kilos per 100 square meters, operated against American 
goods. Consequently, following the Cuban experience, a change to 
8 kilos was made. The tariff as finally revised was then returned to 
the Philippines and enacted into law by the commission on Sep- 
tember 17, 1901, to take effect November 15, 1901. 

This tariff act of 1901 was not originally enacted by Congress, but 
was proclaimed by the Philippine Commission, advised by and subject 
to the approval of the Bureau of Insular Affairs of the War Depart- 
ment. 

On imports from the Philippines into the United States it is to be 
noted that the full rates of the Dingley tariff were from the first 
imposed, but against the strong protest of the Philippine com- 
missioners as well as of Americans engaged in business in Manila. 
In the case of the Fourteen Diamond Sings, testing the validity of 
the collection of this duty, the Supreme Court decided that the Phil- 
ippines by the treaty of Paris ceased to be ''foreign" territory and 
that, therefore, the duties imposed by the Dingley Act upon imports 
from foreign countries could not be levied upon products of the Philip- 
pines entering the United States. But while in the absence of legis- 
lation to the contrary the products of the Philippines were entitled 
to free admission into the United States, the Supreme Court in this 
and later ''insular cases" recognized that Congress possesses full 
power to regulate the tariff relations with the Philippines. 

The tariff act of March 8, 1902. — Three principal reasons induced 
Congress to take up the matter of the Philippine tariff at once after 

''5 It has been charged that these reclassifications violated Article IV of the Treaty with Spain. (R. F. 
Hoxie, American Colonial Policy and the Tariff, Journal of Political Economy, March, 1903, p. 213; H. P. 
AViilis, Our Philippine Problem, p. 274.) But it is clearly incorrect to speak of this legislation as a " viola- 
tion '^ of a treaty which in no way restricted the right of the United States to change the classifications 
of the Philippine tariff. And the most important change— that in the method of determining the dutiable 
weight of certain textiles— was a removal of a discrimination against American manufacturers and can 
not fairly be called an evasion of the terms, or be said to conflict with the spirit, of the treaty. 

« 57th Cong. , 1st sess., S. Doc. No. 134, p. 22. The quotation has been amended by changing " weigh- 
ing of materials" to "weighting materials." 



592 COLOl^IAL TAEIFF POLICIES. 

the decisions in the insular cases had been rendered.^^ Firsts both 
the Spooner amendment to the Army appropriation act of March 2, 
1901, granting the Philippine Commission certain restricted legis- 
lative powers, and the Philippine tariff of September 17, 1901, 
proclaimed by this co mm ission were in question. "^^ Secondly, im- 
ports into the United States from the Philippines were, at least 
temporarily, by virtue of the decision of the Supreme Court, ad- 
missible free of duty. Thirdly, the decisions of the Supreme Court 
rendered it likely, that, if brought to a legal test, American coast- 
wise shipping laws, which Excluded foreign shipping from American 
coastwise trade, would be held applicable to commerce between the 
Philippines and the United States. Such a decision, on account of 
the small number of American ships engaged in Philippine trade, 
would drive the commerce of the Islands to foreign countries, whose 
vessels could trade between the Philippines and foreign ports, but 
not between the Philippines and American ports. 

To meet this situation bills introduced by Senator Lodge in the 
Senate on December 4, 1901, and by Mr. Payne in the House on 
December 10, 1901, proposed that the tariff on imports into the 
Philippines in force during the regime of the Philippine Commission, 
be reenacted, and that the application of the coastwise shipping law 
to the Philippines be suspended until 1904, by which time it was 
hoped a sufficient number of American vessels might be available. 
The House bill also provided for the enforcement of the full rates of 
the Dingiey Tarilf Act on imports into the United States from the 
Philippines. As a compromise between the request of the Philip- 
pine Commission to reduce the rates of the Dingiey Act by one-half 
and the demands of i\.merican sugar and tobacco interests, which 
expressed alarm at the prospect of competition with the Orient, that 
the full rates of the act be retained,^® the Senate bill provided that 
imports from the Philippines be subject to rates lower by 25 per 
cent than the rates of the Dingiey Tariff Act, and this change was 
acquiesced in by the House. After a long and spirited debate, in 
which the minority party in general contended for free trade between 
this country and the Philippines, the bill with the provisions just 
described became law, on March 8, 1902. 

Export duties — Remission of duty upon exports to the United States 
under the acts of 1902 and 1909, — The act of March 8, 1902, made no 
direct change in the export duties levied in the Philippines, but 
provided in effect that in the trade with the United States they should 
be superseded by the American import duties. °° This result was not 
attained hj a general exemption from export duties of exports to 
the United States, but by two provisions of which one authorized 
the subtraction, from the import duties otherwise collectible in the 
United States, of any amount already paid as export duty in the 
Phihppines, and the other provided that articles which were upon 

« Cf. Senator Lodge, chairman of the Philippine Cominittee, Cong. Rec, vol. 35, pp. 822 fE., and Rep. 
Payne, chairman of Ways and Means Committee, ibid., pp. 328 ff. 

*8 This amendment delegated to the President the power to govern the Philippines in his civil capacity, 
not under war authority. Under the power granted to him he accordingly" gave instructions to the 
Philippine Commission,' and Congress, by tlie organic act for the Philippines of July 1, 1902, formally 
approved and ratified the military tariff of 1898 and the tax legislation of the Philippine Commission, thus 
giving a legal status to ail duties heretofore collected, but v/ith the proviso that the act should not be held 
to amend or repeal the act of March 8, 1902, here under discussion. 

« The position of these interests is stated fullv in the Senate hearings on .revenue for the Philippine 
Islands, 59th Cong., 1st sess., S. Doc. No. 277. 

60 1. e., by the duties leviable upon Philippine products, namely, 75 per cent of the ordinary rates. 



UNITED STATES. 593 

the American free list should be entirely exempt from any export 
duties imposed in the Phihppines. This Latter provision was Hmited 
to articles coming direct from the Islands to the United States for 
use and consumption therein. ^^ 

The act of 1902, it was thought, °^ would mean no net loss of 
revenue to the Philippine treasury, for the Islands were to be com- 
pensated for the loss of export duties by the provision of section 4, 
that all duties and internal revenue taxes_ collected in the United 
States upon imports from the Philippine Islands, and all tonnage 
taxes collected upon foreign vessels arriving from the Islands, 
should constitute a separate fund and be paid into the Philippine 
treasury. 

In the tariff act of September 17, 1901, enacted by the Philippine 
Commission, the system of export duties contained in the Spanish 
tariff system had been continued. Exports of manila w^ere duti- 
able at 75 cents per 100 kilos (220 pounds), indigo at 25 cents, 
fresh or dried coconuts at 10 cents, sugar at 5 cents, and tobacco at 
a maximum of $1.50. Of these products, sugar and tobacco were 
subject to duty upon importation into the United States, so that 
the Philippine products entering the American market enjoyed a 
preferential tariff reduction equal to the amount of the Philippine 
export duty. Of the other articles which paid an export tax in the 
Philippines, but w^hich were entitled under the Dingiey Tariff Act 
to free admission into the United States, manila was by far the most 
important. The chief significance of this section of the act lay, 
therefore, in its exemption of manila exported to the United States 
from the Philippine export tax of 75 cents per 100 kilos. 

The chairman of the Senate Committee on the Philippines, in re- 
porting the bill on January 2, 1902, stated that the object of the 
provision was to distribute the remitted export tax between the 
producer and the consumer by increasing the price paid to the 
producer of manila in the islands and b}^ decreasing the price of raw 
material to the manufacturer of cordage and the price of his product 
to the user of cordage in the United States. It was expected that 
the loss to the Philippine treasury through the exemption of the 
export tax on manila shipped to the United States would be more 
than made up by the provision that all duties collected in the United 
States on imports from the Philippines should be paid into the 
treasury of the Islands. ^^ As a matter of fact, however, according 
to official figures cited by President Taft, the actual loss to the 

w Section 2 of the act, after specifying that products of the Philippines (as distinguished from foreign 
products imported by way of the Philippines) sliould pay upon entry to the United States only three- 
fourths of the ordinary tariff rates, continued: ^'And provided further, That the rates of duty which are 
required hereby to be levied, collected, and paid upon products of the Philippine Archipelago coming 
into the United States shall be less any duty or taxes levied, collected, and paid thereon upon the shipment 
thereof fi'om the Philippine Archipelago, as provided by the act of the United States Philippine Com- 
mission referred to in section one of this act, under such rules and regulations as the Secretary of the 
Treasury may prescribe, but all articles, the growth and product of the Philippine Islands, admitted into 
the ports of the United States free of duty under the provisions of this Act and. coming directly from said 
islands to the United States for use and consumption therein, shall be hereafter exempt from any export 
duties imposed in the Philippine Islands." 

^^ But see next page. 

63 Export tax on manila hemp, 62d Cong., 3d sess., H. Doc. No. 1401, p. 4 (message from President Taft). 
Under the act of March 8, 1902, regulations were promulgated requiring that on exportation of manila from 
the Phihppines, whatever its destination, the export duty should be paid, and that on submission of 
proper evidence within a period of 2 years thereafter that the manila so exported had proceeded direct 
to the United States and had been consumed by manufacture therein, the amoun t of the export duty col 
lected should be refunded. Because of these regulations the remission of the exj)ort tax became known 
as a "refund." The United States Navy, which was a regidar purchaser of manila, was exempted from 
this payment . 



594 COLONIAL TAEIFF POLICIES. 

Philippine treasury through remission of the export duties on manila 
froml902 to 1912 amounted to $4,881,542.81, whereas the total amount 
turned over to the Philippine treasur}^ during the same period from 
the proceeds of the duties collected in the United States on im- 
ports from the Philippines, which were to offset this loss to the 
Philippine treasury, was only $3,673,957.76 ;^'^ and the following is 
a typical example of the opposition constantly voiced in the annual 
reports of the Philippine Commission: ^^ 

■^ * * It is a direct burden upon the people of the Philippine Islands, because 
it takes from the insular treasury export duties collected from the people and gives 
them to manufactiuers of hemp [manila] products in the United States. These 
manufacturers were alread;/ prosperous before this bounty was given them and it 
seem.s hardly consistent with oiu' expressions of purpose to build up and develop 
the Philippine Islands when we are thus enriching a few of our own people at their 
espense. 

At various times this whole question of remission of the tax on 
manila was vigorously argued. In 1904, when the War Department 
and the Philippine government were considering a revision of the 
Philippine tariff, it was decided to recommend, among other changes, 
the dropping of the provision for this refund, and it was omitted 
from the draft of the proposed tariff submitted by the War Depart- 
ment. Congress, however, did not approve of this change and the 
bill as passed °° contained the provision. In 1909, when the revision 
of the Philippine tariff was again under consideration, the Philippine 
government submitted a draft which did not contain this provision. 
The discussion which followed in the congressional hearings on this 
subject showed that Congress would not remove the exemption and 
that the only way in which the Pliilippine government could avoid 
this would be by abandoning the export duty altogether. The 
Philippine government, fearing the loss of revenue which would 
result, was unwilling to do this, and the Philippine tariff act of 1909 " 
retained this provision. Since it had been pointed out to the Philip- 
pine government that it could, if it chose, exempt the producer of 
manila from the export tax, but that it could not impose that tax 
on manila shipped direct to the United States for consumption 
therein, that government ceased to repeat the recommendation 
which it had made for a number of years for the abolition of the ex- 
emption in favor of American manufacturers.^^ 

After the enactment of the Philippine tariff act of 1909,°^ the regu- 
lations governing the remission of export duty were modified so that 
instead of requiring the payment of the export tax on manila to be 
refunded later, a bond was required, which was released on the sub- 
mission of satisfactory evidence of direct shipment to the United 
States and manufacture therein within two years. 

Finally the United States tariff act of October 3, 1913/^ repealed 
the provision for export taxes in the Philippines and the Philippine 

"< Export tax on manila hemp, 52d Cong., 3d sess., H. Doc No. 1401, pp. 18, 19. This failure of the 
duties and taxes collected in the United Staies and tui-ned over to the Philippine Treasury to equal the 
amount of duty remitted in the Philippines in 1902-1912 was wholly due to the free entry accorded to 
PhiUppine products in August, 1909. Under the law which ceased to operate on Aug. 6, 1909. the re- 
mission of duty was 83,235,000; the collection in the United States was about $3,650,000. 

^» Ibid., Annex A, p. 8. 

" Act of Mar. 3, 1905. 

« See p. 597. 

68 62d Cong., 3d sess., H. Doc. No. 1401, p. 5. 

65 This act reduced the schedule of Philippine export duties to manila, sugar, copra, tobacco, and tobacco 
waste, dutiable, respectively, at S0.75, $0.05, SO.IO, $1.30, andS0.50per 100 kilos gross weight. It also inserted 
in this provision after the United States the words •' or any of its possessions." 

6f Sec. IV C. See p. 599. 



UNITED STATES. 595 

goTernment act of 1916 provided that no export taxes should be 
levied in the Phihppines.^^ 

Drawhachs and exemptions from internal revenue for exports to the 
Philippines, act of 1902.— The act of March 8, 1902, extended to the 
trade with the Phihppine Islands the benefit of the provisions relat- 
ing to drawbacks and exemptions upon exports to foreign countries. 
Section 6 provided in general that articles manufactured in the 
United States and exported to the Philippines should be subject 
to no internal-revenue tax, and that if made from dutiable imported 
raw materials they should receive a drawback of 99 per cent of the 
duties paid.*^^ 

Section 7 provided for the reexportation from the United States 
to the Philippines of imported merchandise. Such merchandise, 
within certain limitations and subject to certain regulations, was 
allowed reexportation without the pajmaent of duty.^^ 

These provisions, which remain in force, were at the time of their 
enactment the logical outcome of a situation in which American 
products and American merchants did not receive in the Philippines 
any differential tariff favors but competed with foreigners as in a 
neutral market. 

The Philippine tariff ^ of 1 90S. —The tariff of 1902 was found 
burdensome by the residents of the Philippines and by American 
business men, and strong pressure was exerted from both sides to 
secure revision. Accordingly the Philippine Commission appointed 
a committee of public officials and business men to recomm^end 
modifications in duties which, without involving drastic change or 
reduction in revenue, would make the tariff less burdensome. The 
proposed revision was circulated, as in 1902, among the interests in 
the United States most closely concerned and their recommendations 
were generally heeded. In the spring of 1905, after a general election 
had retained the Kepublican administration in power, Gov. Taft 
presented the report to the appropriate committees of both Houses 
for action, and the bill embodying the proposed revision was favor- 

61 Sec. 11. 

62 Sec. 6. That ail articles manufactured in bonded manufacturing warehouses in whole or in part of 
imported materials, or of materials subject to internal-revenue tax and intended for shipment from the 
United States to the Philippine Islands', shall, when so shipped, under such regulations as the Secretary 
of the Treasury may prescribe, be exempt from internal-revenue tax, and shall not be charged with duty 
except the duty levied under this Act upon imports into the Philippine Islands. 

That ail articles subject under the laws of the United States to internal-revenue tax, or on which the 
internal-revenue tax has been paid, and which may under existing laws and regulations be exported to a 
foreign coimtry without the payment of such tax, or with benefit of drawback, as the case may be, may 
also be shipped to the Philippine Islands with like privilege, under such regulations and the filing of such 
bonds, bills of lading, and other security as the Commissioner of Internal Revenue may, with the approval 
of the Secretary of the Treasury, prescribe. And all taxes paid upon such articles shipped to the'Philip- 
pine Islands since November fifteenth, nineteen hundred and one, under the decision of the Secretary 
of the Treasury of that date, shall be refunded to the parties v/ho have paid the same, under such rules 
and regulations as the Secretary of the Treasury may prescribe, and a sum sufficient to make such pay- 
ment is hereby appropriated, out of any money in the Treasury not otherwise appropriated. 

That where materials on which duties have been paid are used in the manufacture of articles manu- 
factured or produced in the United States, there shall be allowed on the shipment of said articles to the 
Philippine Archipelago a drawback equalin amount to the duties paid on the materials used, less one per 
centum of such duties, under such rules and regulations as the Secretary of the Treasury may prescribe. 

63 Sec. 7. That merchandise in bonded warehouse or otherwise in the custody and control of the officers 
of the customs, upon which duties have been paid, shall be entitled, on shipment to the Philippine Islands 
within three j^ears from the date of the original arrival, to a return of the duties paid less one per centum, 
and merchandise upon which duties have not been paid may be shipped without the payment of duties 
to the Philippine Islands within said period, under such rules and regulations as may be prescribed by 
the Secretary of the Treasury. 



596 COLO^^IAL TAEirr policies. 

ably reported by the Ways and Means Goniniittee of the House 
February 13, 1905, In the words of the committee report:^* 

The general purpose of this bill, as of the former act, is to give the United States 
such benefits as there are arising from the classification of goods. There is no pref- 
erence in rates given to goods coming fi'om the United States, for the reason that by 
the terms of the treaty of Paris Spain would have the right to a similar preference 
on goods imported from Spain to the Philippine Islands until January, 1909. 

The preferential classifications of the previous measure were 
experimental, and experience had suggested changes. The changes, 
however, were not decided enough to suit the minority. Said 
Kepresentative Clark of Missouri :®^ 

As far as the amendments tendered by the minority of the committee are concerned, 
we simply undertake, as far as we can, without running_counter to the pro\ision3 of 
the treaty of Paris, to get our stuff into the Philippine Islands on better terms than 
other people can, and for that reason we have confined the most of our amendments 
to things most largely produced in the United States, and produced to the least 
extent in the foreign countries. 

Representative Cooper of Texas, another member of the Ways and 
Means Committee, said:^^ 

The changes that we [i. e., the Democrats on the committee] \vill seek to have 
written in the law are changes which will encourage the importation into the Philip- 
pine Islands of the products of the United States, and will raise sufficient money 
to defi-ay the expenses of the government, and will justly discriminate against like 
products that may go there from Spain. 

Amendments were offered by southern Members of the House to 
provide for free entry of cotton and cotton goods into the Philippines 
from the United States and Spain, but they were defeated by a 
narrow margin. In their support Mr. Webb of North Carolina said :" 

We control the Philippines. They are our territory. We are now legislating for 
them. VMiy not let this great American staple go in there free? It is about the only 
crumb we can throw to the southern cotton grower who bears many tariff burdens 
now, and I insist that this House should adopt that amendment and give the product 
of their sweat an open market. 

In addition to the reclassification certain other changes were 
made. The schedule of duties was revised. Ad valorem duties 
were substituted for specific on certain articles, in order to eliminate 
excessive duties on inferior grades. The duty on manufactured 
tobacco which had been found to be prohibitive was decreased one- 
half. The rates were lowered also on mirrors, porcelain, silverv/are, 
wood and lumber, furniture, and other articles on which the old 
duties had been found burdensome, or not productive of revenue. 
The duty on machinery v/as reduced from 20 to 5 per cent ad valorem. 
The rates averaged about 20 per cent. To avoid the possibility that 
the people might suffer through a poor crop of rice, the Philippine 
Commission was given the power to suspend at their discretion the 
duty on rice. The act removed the export duty upon rice; other- 
wise the export schedule remained unchanged. 

The act of Felruary 26, 1906. — In the Philippine tariff bill of March 
3, 1905, apparently unimportant changes were made in the classifi- 
cation of duties, according to the number of threads per square of 6 
millimeters size, which, although furnished by American textile manu- 
facturers themselves, actually resulted in the same specific duties on 

«* 58th Cone., 3d sess., H. Rept. No. 4800. se Cong. Rec, vol. 39, p. 2998. 

«Cong. Rec, vol. 39, p. 3001. - 8? Ibid., p. 2996. 



UNITED STATES. 597 

American standard cotton prints and British prints of somewhat 
better quahty.^^ American exports accordingly dropped off sharply, 
as shown in the following table : 



Ten-month periods. 



Linear yards. 



Value. 



July, 1904r-Aprn, 1905, inclusive 

May, 1905- February, 1906, inclusive... 
March, 1906-December, 1906, inclusive. 



13,741,188 
3,955,503 
12; 360, 875 



$671,256 
177,295 
712,734 



The changes so obviously put American manufacturers at a disad- 
vantage that on February 26, 1906, Congress amended the act of the 
previous year to restore the former rates. The issue was one of 
method in achieving a recognized principle, a merely technical ques- 
tion which occasioned no discussion; and the bill passed the House 
practically without debate and without division. 

ACT OF 1909 — FREE TRADE BETWEEN THE UNITED STATES AND THE PHILIPPINES. 

The next landmark in the history of Philippine tariff legislation is 
the American tariff act of August 6, 1909, vfhieh granted free entrance 
to goods from the Philippines, with the exception of rice, and with 
the limitation that the free importation of sugar should be restricted 
to 300,000 gross tons per annum, and of tobacco to 300,000 pounds 
of wrapper tobacco, 1,000,000 pounds of filler tobacco^ and 150,000,000 
cigars; any amounts beyond these limits were to be subject to the 
ordinary duty. These restrictions in amounts, intended to protect 
the American producers against too keen competition from Philip- 
pine products, were sufficiently generous, being far in excess of the 
output of these products in the Philippines. Products of the Philip- 
pines v/hich contained foreign materials to the value of more than 20 
per cent of their total value were also made dutiable in the United 
States. The American tariff rates on rice, sugar, and tobacco were 
extended to imports into the Philippines in order to preclude reex- 
portation of foreign products to the United States at the preferential 
rates. 

By the act of the same day dealing^ with the Philippine tariff all 
imports into the Philippines from the United States were made free 
of duty. The revised tariff on imports into the Philippines was pre- 
pared by Col. Colton, collector of customs in the Philippines, and Mr. 
Hord, collector of internal revenue, in conference with tariff experts 
in the islsinds. It was then sent, according to custom, to Gen. 
Edwards, Chief of the Bureau of Insualr Affairs in the War Depart- 
ment. He consulted the business interests of the United States, 
received their suggestions, and according to his own statement sat- 
isfied them.^^ He then turned the draft over to the Ways and 
Means Committee of the House, where only a few changes were made. 
There was little debate upon the bill in Congress. Mr. Harrison, later 
governor of the Philippines, opposed it on the ground that it provided 
for an exploitation of the Filipinos to enrich American manufac- 

63 ForfuUtechnicaltreatment of this subject, see Cotton Cloth: Import and Export Trade in Relation to 
the Tariff, to appear shortly as a regular publication of the U. S. Tariff Commission. 

63 Cong. Rec, vol. 44, p. 1998: "I think we have reconciled all special interests of the United States except 
such as may come up of which I have no knowledge." (Philippine tariff bill, hearings, 61st Cong., 1st 
sess., Apr. 20, 1909, p. 18.) 



598 COLONIAL TAEIFF POLICIES. 

turers/" but Mr. Underwood, afterwards chairman of the Committee 
on Ways and Means, supported it.^^ 

The law is still in effect. It is hard to estimate the average rate of 
duty, for the rates are in part ad valorem and in part specific, but it 
is generally agreed that the average duty was about 20 per cent 
when the bill was passed.^^ 

It was the plan of Gen. Edwards that the schedules should be 
arranged with two objects in view — to gain a revenue and to give 
Americans a chance in the trade."^^ He did not wish to give them a 
monopoly, he explained, but wished in all cases to equalize competi- 
tive conditions between them and foreign producers. To illustrate: 
The tariff on textiles of wool was placed at 35 per cent, and as Ameri- 
can goods were to go in free. Col. Colton testified that he should 
expect that the rate of 35 per cent ad valorem to be imposed on 
the foreign product vv^ould give most of the market to the United 
States.'^'^ The rate on farm machinery had been 5 per cent, but was 
raised to 15 per cent to increase the preference to American exporters.^^ 
Gen. Edwards testified also that Vv^hereas half the flour had been 
coming from Australia, the new tariff arrangements should give all 
the trade to the United States. 

The most insistent demands for protection against foreign compe- 
tition in the Philippine market came from the American manufac- 
turers of light rails used on sugar plantations, and other sugar ma- 
chinery.^^ The War Department conceded to them a duty of 30 per 
cent ad valorem on foreign imports, but this rate was reduced to 15 
per cent in the House Committee on Ways and Means. Under the 
act of 1905 these articles had entered as machinery at 5 per cent ad 
valorem. Structural steel was made subject to a duty, prohibitive 
save as to the American product, in order to protect a Manila plant 
which manufactured bolts and nuts and assembled materials;^' and 
a Philippine match factory ''in which they use American machinery" 
was protected through the establishment of a rate of duty on matches 
imported into the Philippines from foreign countries equal to the 
rate imposed on matches imported into the United States.'^^ 

Numerous changes from specific to ad valorem rates make it diffi- 
cult to compare the rates of this tariff vath former rates. Compari- 
son with the duties imposed on imports into the United States is 
even more difficult, because of the differences in classifications and 
units of measurement. During the debate, however, Mr. Underwood, 
a critic and yet in general a supporter of the bill, presented a compari- 
son based on a common system of measurements of the rates of the 
pending bill with the former Philippine rates, and with the then exist- 
ing American schedule of duties. '^^ There foUow sufficient of the 
items in this comparison to illustrate the general range of duties. 
When not otherwise stated, the figures represent ad valorem rates. 

_ '0 Cong. Rec, vol. 44, p. 2003. 

:«»'i Ibid., pp. 2005-2008. 

— ' '2 Mr. Payne and Mr. Underwood agreed on that figure. 

'3 House hearings on the Philippine tariff, 1909, p. i?. 

71 Ibid., p. IS. The rate of 35 per cent has not given the United States a monopoly of imports of wool 
manufactures. 

'5 Ibid., p. 16. 

^6 Cf. Mr. PajTie, Cong. Rec, vol. 44, p. 1998; Gen. Edwards, House hearings, 1909, p. 18. 

" Cong. Rec, vol. 44, pp. 2003, 2005. 

'8 Gen. Edwards, House hearings, 1909, p. 18. 

" Cong. Rec, vol. 44, pp. 2005-2008. 



UNITED STATES. 



599 



Table 7. — Comparison of rates under the Philippine tariff acts of 1905 and 1909 with 
those under the United States tariff act of 1897. 



Article. 


Philippine tariff. 


United States 


Act of 1905. 


Act of 1909. 


tariff act of 1897. 


Marble, onyx, jasper, etc.: 

In blocks . .... . 


40 per cent .... — 

31 percent 

15 to 20 per cent... 
56 per cent 

50 per cent ........ 


20 per cent 

30 per cent 

10 per cent 

25 per cent 

25 per cent 

35 per cent 

26 per cent 


42.46 per cent. 
48.15 per cent. 
40 to 50 per cent. 
45 per cent. 

14 to 155 per cent. 
45 per cent. 
45 per cent. 
$7.84 per ton. 
$33.60 per ton. 
45 per cent. 
19 to 38 per cent, 
38 to 80 per cent. 
24 to 33 per cent. 
27 to 60 per cent. 

24 to 124 per cent. 
44.84 per cent. 

9 to 40 per cent, 

56 per cent. 

50 to 64 per cent. 

25 ner cent. 


In slabs T)lates etc 


Demijohns, carboys, jars, bottles, flasks 

Glass, crystal, and imitation crystal in de- 
canters, glasses, etc. 
Common window "^^ass 


Mirrors 


Jewelry and goldsmith's work . . 


26 per cent 


Steel rails. . . 


Terneplate and tin plate 


$12 per ton 

$10 per ton 


$12 per ton . . 


Copper and alloys in wire 


$15 per ton 

10 per cent 

15 per cent 

15 per cent 

31 per cent 

10 per cent 

26 per cent 

15 per cent 

20 per cent 

25 per cent .... 

15 per cent 

20 per cent 

20 per cent 

15 per cent 

15 per cent 

12 per cent 

$10 per ton 

$40 per ton... 




Pigments and paints. . 


15 per cent 

25 per cent 

31 per cent 

17 per cent 

26 per cent 


\nimal oils and fats crude 


Starch and dextrin 

Explosive, dynamite, etc 

Cotton goods, average of schedule 




24 per cent 

25 per cent 

29 per cent 


Knitted goods, in the piece . 




Boots and shoes .... 




20 per cent 


45 per cent. 
45 per cent. 
45 per cent. 
45 per cent. 
34 per cent. 
$22.40 per ton. 
$112 per ton. 


Cooking and heating apparatus and utensils. 




Automobiles i . 


Poultry and game 10 per cent 

Fresh meats . . ' 







The United States tariff act of 1913.— The act of October 3, 1913, 
contained several provisions bearing on the tariff relations of the 
United States with the Phihppines.^^ It reenacted the provision of 
the act of 1909 for the free admission into the Philippines of American 
products, but it did not deal with the rates of the Philippines tariff 
on foreign imports. It removed the duty on Philippine rice and the 
limitations on the amounts of sugar and tobacco which could be 
imported free of duty from the Philippines, Free trade was thus 
established between the United States and the Philippines without 
limitation except that of direct shipment, continued from the act of 
1909. 

This was the culmination of a tendency which had been operating 
from the first. In the early days of the American occupation, the 
full prevailing rates were assessed against Philippine goods. Then, 
after a brief interval of free entry which was due to a judicial decision 
and not to congressional policy, 25 per cent of the duties was taken 
off. After several unsuccessful attempts to secure a removal of 75 
per cent of the duties, in 1909 free importation was granted with the 
exception of rice and of limitations on the amounts of sugar and 
tobacco admissible free of duty; and finally in 1913 ail limitations 
Vv^ere removed. 

Although free trade prevails betv/een the Philippines and the 
United States, they are not in customs union as is the case with 
Hawaii and Alaska. Because of the different schedules of duties 
assessed on imports in the United States and in the Philippines, 
certain limiting provisions were embodied in the act of 1913 to safe- 
guard against the development of the practice by foreign exporters 

£0 The provision abolishing export taxes in the Philippines has already been noted. See p. 594. 



600 COLOI^IAL TAEIFF POLICIES. 

ol introducing their products first under whichever of the two tariffs 
had the lower rates on their products and then reshipping into the 
other country. Products to be admitted into either the United States 
or the Phihp'pines free of duty from the other must not contain foreign 
materials to the value of more than 20 per cent of their total value, 
and must be shipped directly, under a through bill of lading from 
the country of origin to the country of destination. Furthermore, 
products shipped between the United States and the Philippines in 
either direction are subject to the internal revenue taxes of the country 
of destination only. 

Coastwise shipping provisions. — The act of March 8, 1902, 
suspended, until 1904, the extension to the Philippines of the law 
restricting coastmse shipping to American vessels, in the expecta- 
tion that by that time there would be sufficient shipping engaged 
in Philippine-American commerce to handle the trade. This expecta- 
tion was not fulfilled, hov/ever, and the suspension has been extended 
from time to time, v/ith-the consequence that the coastwise-shipping 
law has never as yet been applied to the Philippines. In the merchant 
marine act of July 5, 1920, there is embodied, however, a provision 
for the extension of the coastwise laws of the United States '^to 
the island Territories and possessions of the United States not now 
covered thereby^' from and after February 1, 1922. Such extension 
is made conditional, however, -upon the establishment of adequate 
shipping facilities under the American flag, and the President is 
authorized to postpone the date of such extension until he is assured 
of the existence of such facilities. Moreover, there is a provision 
in this act applying especially to the Philippines which stipulates 
that the provision for the extension of the coastwise-shipping law 
shall not apply to the Philippines ''until the President of the United 
States after a full investigation of the local needs and conditions 
shall, by proclamation, declare that an adequate shipping service 
has been established as herein provided and fix a date for the going 
into effect of the same." ^^ 

PORTO RICO. 

AREA AND POPULATION. 

Porto Eico, the easternmost and smallest of the Greater Antilles 
in the Caribbean Sea,^^ is a little over 100 miles long and about 36 
miles wide, comprising an area of about 3,600 square miles. In the 
interior is a broken range of hills, from which the land slopes north- 
ward and southward to the low coast line, indented with few good 
harbors. In addition to the main island, there are several small and 
unimportant outlying islands. 

The population, according to the census of 1920, wms 1,297,772, 
as compared with 1,118,012 in 1910 and 953,243 in 1899. The aver- 
age number of persons to the square mile is therefore 360. San Juan 
and Ponce, with populations in 1920 of 71,443 and 41,912,^^ respec- 
tively, are the largest cities. 

81 All of these provisions are in sec. 21 of the act. , quoted on p. 61. 

82 It lies within the Trooics, between latitudes 17° 15' and 18° 3^ N. and longitudes 65° 30' and 67° 15' W. 

83 The whole municipality of Ponce has 71,428. 



UNITED STATES. 



601 



COMMERCIAL IMPORTANCE. 



Under the Spanish regime coffee was the chief staple of the island, 
but through the loss of the tariff preference in Spain and Cuba follow- 
ing the American occupation this industry suffered a sharp decline, 
and its place was usurped by sugar, which, as a result of free importa- 
tion into the United States in 1901, suddenly doubled in output. 
From 1850 until 1902 the yearly production of sugar ranged from 
25,000 to 75,000 tons; in 190^ the output was 100 per cent greater 
than in 1897; and in 1919 the figure reached 352,000 tons. Tobacco 
also, under the American occupation, has greatly surpassed coffee, 
until in 1919 sugar constituted over 60 per cent of the exports, leaf 
tobacco 9.5 per cent, cigars 8.4 per cent, and coffee only 7.5 per cent. 
In recent years fruit raising has also developed considerably. Manu- 
facturing is represented, for the most part, merely in the production 
of cigars and cigarettes. Manufactures were valued at $48,757,000 
in 1909 and $85,507,000 in 1919. 

The following table shows the value of the merchandise exported 
from Porto Rico to all countries and to the United States for a series 
of years from 1901. 



Table 8. — Value of merchandise exported from Porto Rico, 1901-1920} 
[In thousands of dollars.] 



Year (fiscal). 


Total. 


To the 
United 

States. 


Year (fiscal). 


Total. 


To the 
United 
States. 


1901 


8,583 
16, 265 
26,996 
37,980 
49, 103 


5,581 
11,722 
19, 142 
32,095 
40,538 


1916. . .. . 


66, 731 

80,970 
74, 294 
79,496 
150,811 


60,952 
73, 115 


1904. . 


1917. 


1907 


1918. . . . 


65,516 
71,015 


1910.. 


1919. 


1913 


1920.. . 


133,208 









Report of Bureau of Insular Affairs, 1920. 



Table 9 gives the value of the principal exports to the United 
States and to foreign countries during the years 1914, 1917, and 1919: 



Table 9. — Value of principal exports from^ Porto Piico, 1914, 1917, and 1919} 
[In thousands of dollars.] 





Article. 


1914 


1917 


1919 


Sugar " 


TO THE UNITED STATES. 


20,239 

927 

5,592 

2,961 

1,245 

752 

751 

8,124 
244 


53,987 
1,332 
7,834 
3,583 
'916 
1,008 
939 

5,859 
21 


48,092 


Molasses.. . . 


1,507 


Cigars 


6 648 


Tobacco, leaf . 


7,260 


Pineapples, fresh . . 


459 


Oranges 


769 


Grapefruit. . 


739 


Coffee. . 


TO FOREIGN COUNTRIES. 


5,997 


Tobacco, leaf 


304 


Sugar... 


41 











1 Report of Bureau of Insular Affairs, 1920. 



602 



COLONIAL TAEIFF POLICIES. 



The following table shows the quantity of the three principal 
products exported from Porto Rico for a series of years from 1901 
to 1919: 

Table 10. — Quantity of sugar, cigars, and coffee exported from Porto Rico, 1901-1919} 



Year. 


Sugar. 


Cigars. 


Coffee. 


• 
1901 


Thousands 
of short tons. 
69 
136 
244 
383 
488 
337 
352 


Millions. 
12 
88 
142 
166 
210 
179 
150 


Millions of 
pounds. 

12 


1905 


16 


1909 


28 


1913 


49 


1917 


39 


1918. 


38 


1919 


28 



1 Report of the Bureau of Insular Affairs, 1920. 

Table 11 represents the merchandise imported into Porto Rico 
from all countries and from the United States for a series of years 
since 1901. 

Table 11. — Value of merchandise imported into Porto Rico, 1901-1919.' 



Year. 


Total. 


From the United 

States. 


From foreign countries. 




Total. 


Per cent. 


Total. 


Per cent. 


1901 .... 


Thousands 
of dollars. 
" 8,918 
13, 169 
29,267 
30, 634 
36.900 
38; 951 
53, 545 
63, 389 
62,400 


Thousands 

of dollars. 

6,965 

. 11,210 

25,686 

27,097 

33, 155 

35, 892 

49; 539 

58, 946 

57, 898 


78.10 
85.12 
87.76 
88.45 
89.85 
92.15 
92.52 
92.99 
92.79 


Thousands 
of dollars. 
1,953 
1,959 
3,581 
3, 537 
3,745 
3,059 
4,006 
4,443 
4,502 


21 90 


1904 


14.88 


1907 ..... 


12 24 


1910 


1L55 


1913 


10 15 


1916 

1917 

1918 


7.85 
7.48 
7.01 


1919. 


7 21 







1 Report of Bureau of Insular Afiairs, 1920. 

The following table shows the value of the principal imports from 
the United States and from foreign countries during the years 1914, 
1917, and 1919. 

Table 12. — Value of principal imiports into Porto Rico, 1914, 1917, and 1919.^ 
[In thousands of doUars.] 



Article. 


1914 


1917 


1919 


FROM THE UXITED STATES. 

Rice 


5,306 

2,644 

2,324 

2,169 

1,653 

1,608 

1,399 

753 

727 

723 

647 

639 

538 

522 

643 
482 


6, 587 
4,799 
3,510 
2, 517 
1,280 
2.686 
1.918 
939 
670 
1,143 
1,311 
1,181 
1,797 
2,132 

821 
493 


11,669 
3,935 
3,659 
3,662 


Iron and steel, and manufactures of 


Cotton cloths 


All other manufactures of cotton. . 


Pork, pickled 


1,495 


Wheat flour 


4,368 


Leather and manufactures of 


1,757 


Boards, deals, planks, and scantlings 


445 


Sugar, refined 


24 


Lard compounds .... 


1,256 


Mineral oils. . 


1,860 


Paper and manufactures of . . . 


1,261 


Cars, carriages, and parts of 


1,246 


Fertilizer..!... 


1,987 


FROM FOREIGN COUNTRIES. 

Fish, dried, smoked, and cured . . 


767 


Jute bags . 


528 







Report of the Bureau of Insular Affairs, 1920. 



UNITED STATES. 603 



THE GOVERNMENT OF PORTO RICO. 



Porto Rico was acquired from Spain by the United States as a 
result of the war of 1898. The island was occupied by the American 
Army on July 25, 1898, but possession was not formally assumed 
until October 18, 1898. From this date until May 1, 1900, the govern- 
ment of Porto Rico was in the hands of Army officers, subject to 
the President acting in his capacity of Commander in Chief of the 
Army. During this period the War Department administered with- 
out important modification the form of civil government and the 
laws existing under the Spanish regime. On April 12, 1900, Congress 
passed the ^'Foraker Act" for the civil government of Porto Rico. 
This act provided for a governor and six heads of administrative 
departments, to be appointed by the President, and a legislative 
assembly of two houses, namely, an executive council and the house 
of delegates. The executive council was to consist of the heads of 
the six administrative departments, appointed by the President. 
The house of delegates was to consist of 35 members, elected biennially 
by the people of Porto Rico. The legislative assembly was granted 
general local legislative power, subject to the veto power of the 
governor, and limited by the authority of Congress to veto or annul 
legislation enacted by the Porto Rico Legislative Assembly and also 
to legislate for Porto Rico. The appointive executive council was 
given both legislative and administrative functions, and was thus 
made the m.ore important branch of the assembly. Congress retained 
full control over tariff legislation and over ail matters bearing on 
the trade relations of Porto Rico with other countries. 

No further change of importance was made in the civil government 
until the passing by Congress on March 2, 1917, of the Porto Rico 
civil government act. This act established a legislature consisting of 
two elective houses, namely, a senate of 19 members and a house of 
representatives of 39 members. The senate succeeded to the powers 
previously entrusted to the executive council. All local legislative 
pov/er in Porto Rico is vested by this law in the legislature. The 
governor continues to be an appointee of the President. A bill, to 
become law, requires the approval of the governor, but if a bill is 
passed again after veto by the governor, by a two- thirds majority 
in each house and the governor still disapproves, it goes to the 
President, who may approve it, whereupon it becomes law in spite of 
the Governor's objection; on the other hand the President may 
veto it. Congress also retains the power and authority to annul 
Porto Rican legislation. 



FINANCE. 



During the period of military government of Porto Rico, the old 
Spanish tax regime was continued, although with some modifications, 
and all of the revenues collected in Porto Rico accrued to the Porto 
Rican treasury. The island was treated as foreign territory in so 
far as the tariff was concerned, and the minimum schedule of the 
Spanish tariff was retained with unimportant modifications for 
imports into the island from all countries including the United States. 
The rates of the general United States tariff were collected in the 
United States on imports from Porto Rico and the proceeds of these 

185760°— 22 39 



604 COLONIAL TARIFF POLICIES. 

taxes went to the Federal Treasury. By the act of March 24^ 1900, 
however, Congress provided that the proceeds of the taxation of im- 
ports into the United States from Porto Rico since its evacuation by 
Spain and all the revenues thereafter collected on such importations 
under the existing tariff law should be placed at the disposal of the 
President, to be used by him for the benefit of the government of 
Porto Rico and for public education and public works in the island. 

The Foraker Act of April 12, 1900, establishing a civil government 
for Porto Rico, in addition to its tariff provisions, provided that the 
island should not be subject to the internal-revenue laws of the 
United States, but should have the power to organize an internal- 
revenue system of its own, and to take such action as it deemed advis- 
able relative to the imposition and collection of other taxes necessar}^ 
to enable it to meet its fiscal requirements. This act also provided 
for the extension to Porto Rico of the United States monetary 
system, and gave to both the insular and the municipal governments 
the power to borrow money for public improvements and other public 
uses to an amount not exceeding 7 per cent of the value of property 
of the island as assessed for purposes of taxation. 

In accordance with the power granted, the insular legislature, 
in 1901, soon after meeting and organizing, proceeded to pass a gen- 
eral revenue law completely revising both the insular and municipal 
financial system. The system of taxes in force under the Spanish 
regime was completely done away with, and in its place there was 
provided a system, of excise taxes modeled after the system of the 
United States, and of general property and inheritance taxes.^^ 

No further change of importance was made in the internal tax 
system until the passing by Congress of the Porto Rico civil govern- 
ment act of March 2, 1917, which, in addition to granting to the 
Porto Rican government general power to levy internal taxes, pro- 
vided that ail taxes collected under the internal revenue laws of the 
United States on articles produced in Porto Rico and transported to 
the United States or consumed in the island should be paid into the 
treasury of Porto Rico. Hitherto internal-revenue taxes collected 
in the United States on Porto Rican products had accrued to the 
Federal Treasury. This act also specifically withheld from the Porto 
Rican government the authority to levy export taxes. 

The following table presents a comparative statement of all 
revenues, and expenditures of Porto Rico for the fiscal years 1917, 
1918, and 1919: 

8< Willoughby, W. W.: Op. cit., p. 115. 



UNITED STATES. 



605 



Table 13. — Revenues and expenditures of For to Rico, 1918, 1919, and 1920} 
[In thousands of dollars.] 



Items. 


Fiscal year ending June 30— 


1918 


1919 


1920 


REVENUES. 

Customs ... 


370 
3,532 
1,040 

484 
1,112 


355 

4, 157 
930 

770 
1, 686 


300 


Internal 


6, 129 


United States internal revenues 


287 


Miscellaneous 


758 


Repayments , . 


2, 051 




Total 


6, 538 


7,898 


9 52.'; 






EXPENDITURES. 

Legislative 


115 
1,283 

477 

737 
196 
1, 423 
50 
482 
972 
421 
327 


89 

1,602 

525 

763 
264 

1,581 
51 
860 

1,324 
415 
293 


53 


Executive. 


2 147 


Insular police 


639 


Maintenance and repairs : 


96*} 


Other 


243 


Public schools 


2 231 


University of Porto Rico . . 


74 


Sanitation 


579 




1,344 
463 




All other payments . 


576 






Total. . 


6,483 


7, 767 i 9. 309 









1 Report of the Chief of the Bureau of Insular Affairs, 1919, p. 13. 

Acquired free from bonded indebtedness in 1898, the island has 
been able, by means of its ordinary revenues, to meet current expenses 
and make considerable improvements. On June 30, 1920, the total 
bonded debt contracted to finance special public works was only 
$10,316,000.^^ 

TARIFF HISTORY. 

At the time of the Spanish- American War the Porto Rican tariff 
consisted of general and conventional schedules almost wholly of 
specific rates, and with free admission of Spanish products imported 
in Spanish vessels, Porto Rican products received preferential 
admission into Spain, and coffee, under the stimulus of preferential 
admission into Spain and Cuba, had become the predominant in- 
dustry.^® 

THE TARIFF UNDER THE MILITARY ADMINISTRATION, 

From August, 1898, to May 1, 1900, during which period Porto 
Rico was under the administration of United States Army officers, 
the collection of duties on imports into Porto Rico was administered 
and executed under regulations of the United States Treasury 
Department, by a special commissioner (under the Treasury Depart- 
ment) to Cuba and Porto Rico. In Cuba, this commissioner put 
into force the minimum rates of the Spanish tariff on imports from 
Spain, but this tariff was so low — in the words of the commissioner, 
^'practically free" — that he felt obliged to adopt for Porto Rico the 



85 Report of the Chief of the Bureau of Insular Affairs, 1920, p. 26. 

86 See chapter on Spanish colonial tariffs, pp. 535-538. 



606 COLOXIAL TARIFF POLICIES. 

much higher rates of the Spanish minirnuni tarifi on imports from 
foreign countries^ even though ''the (Treasm-y) Department and the 
commissioner Vv ere well aware that many of the rates of duty would 
prove onerous/'' ^' As a temporary measure of relief, however, 
made in response to the plea of the special commissioner and the 
memorials by Porto Rican merchants, the Secretary of the Treasury 
decided to collect the Porto Rican customs duties in the silver coins 
(pesos) of that country, at the rate of 2 pesos to one American dollar. 
This action practically reduced the duties one-half, as the peso did 
not exchange ordinarily for much more than 25 cents of American 
money. B}^ Executive order of the President of the United States 
January 20, 1899, further relief was granted by permitting the pay- 
ment of import duties after February 1, 1899, in pesos at the rate of 
60 cents United States mone^v to 1 peso.^^ 

Imports from the United States were subjected to the sam.e rates 
of duty as imports from foreign countries, but the trade between 
ports of the United States and Porto Rico and between all ports in 
Porto Rico was restricted to vessels of American registry. ^'^ 

All of the customs revenue collected in Porto Rico v^'as expended 
in the island, but the proceeds of the duties collected in the United 
States on imports from Porto Rico went at first into the United 
States Treasury. On March 24, 1900, however Congress passed a 
law placing at the disposal of the President to be expended for the 
benefit of Porto Rico all the revenue that had heretofore been col- 
lected and that might thereafter be collected under the existing law 
on imports into the United States from the island. °° 

Porto Rico VN^as far from pros^perous in the early years of the 
American regime. During the period of hostilities, trade conditions 
were disturbed, not only by the military activities, but by the raids 
of bandits and outlaws. The currency of the island had depreciated, 
and in August, 1899, a tornado destroyed a large part of the standing 
food crops, killed several thousands of people and many thousands 
of cattle, and practically ruined the coffee crop. But the economic 
distress was not attributable wholh' to physical causes. Occupa- 
tion of the island hj the United States resulting in the termination 
of the Spanish and Cuban tariff preferences on Porto Rican products, 
especially on coffee and tobacco, made it almost impossible for Porto 
Rico to market her coffee. Spain made conditions even more diffi- 
cult for Porto Rico by enacting new and prohibitive duties on coffee, 
sugar, and tobacco, which comprised 85 per cent of the Porto Rican 
exports.^^ 

In response to the pleas from the inhabitants of Porto Rico for 
alleviation of their economic distress. Gov. Davis of Porto Rico 
asked that free trade should be established between Porto Rico and 
the United States, in the hope that the Porto Ricans would thereby 
find a miarket in the United States for the products which formerly 
had gone to Spain and Cuba.^^ President McKinley in his message 

87 Report and recommendations to the Secretary of the Treasury on the customs tariff of the island of 
Porto Rico, bv Robert F. Porter, special commissioner for the United States to Cuba and Porto Rico, 
Washington, 1899, p. 3. 

88 Amended customs tariff and regulations for ports in Porto Rico, Washington, p. 45. 

89 Ibid., p. 7. 
so See p. 609. 

£1 Cf. testimony of Goy. George W. Dayis of Porto Rico before Senate Committee on Pacific Islands and 
Porto Rico. .56th Cong., 1st sess^., S. Doc. No. 147. 
fUbid. 



UNITED STATES. 607 

to Congress of December 5, 1899, supported this appeal, and declared 
that under the existing circumstances it was the plain duty of Con- 
gress ^Ho abolish all customs tariffs between the United States and 
Porto Rico and give her products free access to our markets." ^^ 
The Secretary of War made a similar request in his annual report 
for 1899. 

THE FORAKER ACT OF APRIL 12, 1900. 

On January 3, 1900, Senator Foraker, chairman of the Senate 
Committee on the Pacific Islands and Porto Rico, introduced a bill 
for the civil government of Porto Rico which provided for the free 
admission of Porto Rican products into the United States, so earnestly 
pleaded for on all sides. On January 19, 1900, Mr. Payne, chairman 
of the House Committee on Ways and Means, introduced a bill in 
the House which provided that the same duties should be levied on 
all articles imported into Porto Rico from ports other than the 
United States which were levied on imports into the United States 
from foreign countries, that trade between Porto Rico and the 
United States in both directions should be free of duty, and that the 
internal revenue laws of the United States should be extended to 
Porto Rico. 

The publication of these bills, however, led to immediate protests 
before the congressional committees from the American sugar- 
producing interests, who did not fear the competition of free Porto 
Rican sugar as much as they fea^red that the proposed measure 
would establish a precedent for the Philippines, and for Cuba if it 
should ever be annexed hj the United States. These protests were 
followed by a change in attitude both in the House and in the Senate. 
On January 24, 1900, Senator Piatt of the Senate committee proposed 
an amendm_ent providing for the imposition of 80 per cent of the 
rates of the Dingley tariff on imports into the United vStates from 
Porto Rico, and on February 5, 1900 the Senate committee reported 
favorably on a bill imposing duties equal to 20 per cent of the 
rates of the Dingley tariff on both imports into the United' States 
from Porto Rico and imports into Porto Rico from the United States. 
Meanwhile Mr. Payne, on behalf of the Ways and Means Committee 
introduced as a substitute for his original measure proposing recipro- 
cal free trade, a bill which provided duties on imports into the United 
States from Porto Rico and imports into Porto Rico from the United 
vStates equal to 25 per cent of the duties imposed on imports from 
foreign countries by the Dingley tariff plus the internal revenue 
taxes of the country of destination. Mr. Payne's bill provided also 
that both the customs revenue collected in Porto Rico on imports 
from the United States and the customs revenue collected in the 
United States on imports from Porto Rico should go to the Porto 
Rican treasury. 

In support of his bill Mr. Payne declared that American sugar 
producers were not afraid of Porto Rican competition, but were 
afraid that any provision for free admission of Porto Rican products 
would be used, as an entering wedge for similar concessions to the 
Philippines.®^ He wanted, he explained, to establish a precedent for 

98 United States Foreign Relations, 1899, p. LVI. 
9* Cong. Rec, 56th Cong., 1st sess., p. 1943. 



608 COLOXI.U. TARIFF POLICIES. 

tlie imposition of duties between the United States and a territorial 
dependency, whether temporary or not, for the scike of future tariff 
relations T\dth the Pliilippin^s and Cuba.--^ Pie also cited the needs of 
Porto Eico for education and other purposes in support of his bill. 
Eepresentative Payne, when asked ^ by Representative Henry of 
Texas, whether the'^duties on Porto Rican imports were to be ^•levied 
in order to give schools to Puerto Ricans," or were they to be levied 
^'for the purpose of giving protection to producers of sugar in this 
country," replied: 

•"I do not see how ^ ^ =^ a tax of 20 per cent of the ordinary 
duty is a protection to any sugar interest in the country."^® 

Considerabk opposition developed both in Congress and outside 
against these proposals to levy duties on the trade between Porto 
Rico and the United States. As a concession to the opposition, 
Representative Payne on February 28, 1900, offered an amendment 
to his bill reducing the duties to be collected on imports in either 
direction to 15 per cent of the rates of the Dingley tariff plus the 
internal revenue taxes of the coimtry of destination.^' and hater in 
the same day he proposed a further amendment to the effect that: 

This act should be taken and held to be pro\isional in its pin-poses and intended 
to meet a present pressing need for revenue for the island of Puerto Rico and should 
not continue in force after the fu'st of March, 1902. ^^ 

A substitute bill, introduced by the opposition on the same day, 
to include Porto Rico within the tariff boundaries of the United 
vStates, was defeated by 160 votes to 174, and the Payne bill, embody- 
ing the two amendments described above, was passed by an even 
closer vote.*^^ 

In the Senate, the Committee on the Pacific Islands and Porto 
Rico presented to the Senate the Foraker bill in amended form, as 
a substitute for the House bill. This bill, in addition to providing 
for the civil government of Porto Rico - stipulated that the United 
States tariff should be applied to imports into Porto Rico from 
foreign countries, and that until March, 1902, rates ecjual to 15 per 
cent of the United States tariff rates plus the internal revenue 
taxes of the country of destination, should be imposed on im-ports 
into Porto Rico from the United States and into the United States 
from Porto Rico. After March 1, 1902, trade between Porto Rico 
and the United States was to be free of customs taxation. 

After a protracted debate, in which the opposition craestioned the 
power of Congress under the Constitution to levy duties on imports 
into the United vStates from a possession or into Porto Rico from the 
United States,^ the Foraker bill was passed in the Senate. It was 
accepted by the House bv a close vote, and became law on April 
12, 1900, / . . ^ 

The tariff provisions of the Foraker Act were as follows: 

(1) Imports into Porto Rico from foreign countries were to be 
subject to the same duties to which they would be subject under 

95 Cong. Rec, 56th Cong., 1st sess., p. 1944, 
98 Ibid., p. 1943. 
»7 Ibid., p. 2401. 
98 Ibid., p. 241:5, 
^ Ibid., p. 242S. 

1 See p. 604. 

2 In 1901 the Supreme Court decided that Porto Rico -was not a part of the I nired States ^vithin the 
revenue clauses of the Constitution. (Downes v. Bidwell [1901], 182 V. S. 244, 21 S. Ct. 770, 45 L. S.10S3 
[L. ed.].) See p. 577. 



UNITED STATES. 609 

the United States tariff if imported into the United vStates, but 
with the following exceptions : 

(a) Coffee in the bean, or ground, imported into Porto Rico 
from any foreign country was subjected to a duty of 5 cents 
per pound (instead of the previous rate of 3 cents) . 

(b) In accordance with Article XIII of the treaty of peace 
with Spain, all Spanish scientific, literary, and artistic works, 
not subversive of public order in Porto Rico, were to be admitted 
free of duty into Porto Rico, for a period of 10 years from 
April 11, 1899. (Sec. 2.) 

(2) All imports into the United States from Porto Rico, and all 
imports into Porto Rico from the United States, were to be admitted 
upon payment of the internal-revenue taxes of the country of des- 
tination, plus 15 per cent of the duties levied upon like articles 
imported from foreign countries, but with the following exceptions: 

(a) All articles except coffee not dutiable under the tariff laws 
of the United States and all articles admitted into Porto Rico 
free of duty under the tariff theretofore administered by the 
military administration in Porto Rico were to be admitted into 
Porto Rico free of duty when imported from the United States. 

(b) "^^Tienever the Porto Rican Legislative Assembly consti- 
tuted b}^ this act should have enacted and put into operation a 
system of local taxation to meet the necessities of the govern- 
ment of Porto Rico and should have notified the President, the 
President should make proclamation thereof, and thereupon all 
imports into Porto Rico from the United States and into the 
United States from Porto Rico should enter free of duty. 

(c) In no event should any duties be collected after March 1, 
1902, on articles imported into Porto Rico from the United States 
or into the United States from Porto Rico. (Sec. 3.) 

(3) The net proceeds of the duties collected on imports into Porto 
Rico and the gross proceeds of the taxes and duties levied in the 
United States on goods im.ported from Porto Rico were to be used 
for the government and benefit of Porto Rico, at first to be held by 
the President as a trust fund for Porto Rico, and later, when the 
Porto Rican Government was organized, to be administered by the 
Porto Rican Government. (vSec. 4.) 

(4) The United States laws restricting coastwise shipping to Ameri- 
can vessels were to be extended to Porto Rico. (Sec. 9; see above, 
p. 606.) 

(5) No export duties were to be imposed in Porto Rico. (Sec, 38.) 
The provision in this act for turning over to Porto Rico the proceeds 

of the duties and internal-revenue taxes to be collected under this 
act on goods coming from Porto Rico, together with the provision in 
the act of March 24, 1900, for the use for the benefit of Porto Rico 
of all the customs revenue theretofore collected on imports into the 
United States from Porto Rico since the evacuation of Porto Rico 
by Spain (October 18, 1898), and thereafter similarly collected under 
the then existing legislation, resulted in turning over to the island 
a total sum of $2,714,249. 19.^ 

By the act of April 29, 1902, Congress stipulated that there should 
be refunded the amount of duties paid in Porto Rico upon articles 

3 Willoughby, W. W,: Op. cit., p. n4. 



610 



COLONIAL TAEIFF POLICIES. 



imported from the Laiitecl States from April 11, 1899 (the date of 
proclamation of the treaty of peace with Spain), to May 1, 1900, 
to the individuals who had paid such duties. By the act of March 3. 
-1903, Congress further stipulated that a similar refund should be 
made of the duties which had been paid during the same period on 
imports into the United States from Porto Rico. These measures 
were passed in order to carry out the decisions of the Supreme Court 
in the insular cases, ^ which denied the applicabihty to imports into 
the United States from the insular possessions of the rates of duty 
specified by the Dingley tariff to be levied on imports from foreign 
countries, and which left in doubt the validity of the taxes collected 
in the insular possessions on imports from the United States under 
the authority of the military administrations and subsequent to the 
proclamation of peace with Spain. 

On July 4, 1901, the Legislative Assembly of Porto Rico passed a 
joint resolution notifying the President of the establishment of a 
system of internal taxation adec{uate to the financial needs of Porto 
Rico, and on July 25, 1901, President McKinley issued a proclamation 
announcing that such a tax system had been established!" In accord- 
ance with the act of April 12, 1900, thereupon trade between the 
United States and Porto Rico became free of customs taxation. 

In the following table, the rates levied upon imports from foreign 
countries, and on imports from the United States until July 25, 1901, 
under the act of April 12, 1900, are compared by principal classes of 
commochties, with the rates levied under the minimum schedule of 
the Spanish tariff, in effect at the time of Am.erican occupation of 
the island:^ 

Table 14. — Ad valorem fqidralents of rates under act of April 12, 1900. 



Article. 



Mini- 

mum 

schedule 

01 

Spariish 
i tailfl. 



On 

imports 
from 

foreign 
coun- 
tries. 



On 

imports 

from 

the 

XTnited 

States 

until 

July 25, 

1901. 



jz^arthenvrare , 

Metals, and manufactures of , 

Chemicals ; 

Cotton, and manufactures of i 

Fibers, and manufactures of | 

Wool, and manufactures of ." I 

Silk, and manufactures of i 

Paper i 

Wood, etc ! 

Animals. j 

Machinery I 

AU aUmentary substances ^ 

Miscellaneous ■ 

Special 

All other commodities 



10 j 

IS ! 
10 ! 

7 ! 
13 1 

10 ! 

12 ! 
6 i 
10 ! 

9 ; 

9 i 

20 i 



60 I 

Ml 

32 

40 

40 

80 

54 

18 

19 

25 

45 

38 

40 

40 

38 



9.0 
6.6 
4.6 
6.0 
6.0 
12.0 
8.1 
2.7 
2.8 
3.7 
6.7 
5.7 
6.0 
6.0 
5.7 



' seep. 57/. 
Computed from data presented by Rep. F&jjie, Cong. Rec, 56Th Cong., 1st sess., p. 1945. 



UNITED STATES. 611 

PRESENT TARIFF RELATIONS OF THE UNITED STATES AND 
PORTO RICO. 

No important cliange has been made in the tariff relations of the 
United States and Porto Rico since 1901. Upon the revision of the 
United States tariff in 1909 and in 1913, the same rates were applied 
to imports from foreign countries into Porto Rico and into the United 
States. The provisions in the act of April 12, 1900, for a tax of 5 
cents per pound on coffee imported into Porto Rico from foreign 
countries and for the continued importation into Porto Rico, free of 
duty from foreign countries, of those commodities which were free of 
duty under the Military Administration tariff, were not continued in 
effect by the United States tariff act of 1909. The trade betw^een 
Porto Rico and the United States continues to be free of customs 
taxation, and Porto Rico is a customs district of the United States. 

Commodities passing between Porto Rico and the United States, 
in either direction, pay the internal revenue taxes of the country of 
destination only. At the same time section 9 of the civil govern- 
ment for Porto Rico act of March 2, 1917, in addition to a provision 
withholding from the Porto Rican government the authority to levy 
export taxes, provided that all taxes collected under the internal- 
revenue laws of the United States on articles produced in Porto Rico 
and transported to the United States should be refunded to the Porto 
Rican treasury. This is to be regarded as a subsidy to Porto Rico 
by the United States, and amounted to $1,039,000 and $929,000, 
respectively, in the fiscal 3^ears 1918 and 1919. 

It should be noted, on the other hand, that imports of dutiable 
foreign commodities into the United States for reexport to Porto 
Rico pay duty at the port of entry into the United States, and that 
the revenue on such imports accrues to the United States, and not 
to the Porto Rican treasury. Conversely, imports into Porto Rico 
from foreign coun trues which are reexported to the United States 
pay duties into the island treasury, but such imports are probably 
not nearly as great in amount as imports from foreign countries 
entering Porto Rico via the United States. For the 3^ear ending 
June 30, 1919, exports of foreign merchandise to foreign countries 
were valued at $53,740, as compared with $504,963 worth shipped 
to the United States.*^ 

AMERICAN SAMOA. 

GENERAL DESCRIPTION. 

American Samoa comprises the islands of Tutuila, Manua, and all 
others of the group, small and unimportant, east of longitude 171° W. 
Of the total 77 square miles in the American group, Tutuila contains 
40, being about 18 miles long and from 5 to 6 miles wide in the widest 
part. Pago Pago, the largest village, is located on the safest and best 
harbor in the South Seas, 4,160 miles southwest of San Francisco 
and 1,580 miles northwest of Auckland, New Zealand. 

The population of the American group was shown by the census of 
1901 to be 5,563 and increased to 7,251 in 1912, and to 8,056 in 1920. 
Of the population in 1912, 92 per cent were natives (Samoans), and 

6 Report of Governor of Porto Rico, 1919, p. 14. 



612 



COLONIAL TAEIFF POLICIES. 



a fraction of 1 per cent foreigners, the remainder being Pacific Is- 
landers, and lialf-castes. 

The subtropical climate, ranging from 78° in June to 82° in Decem- 
ber, and the rich soil combine to produce with slight human effort a 
large variety of tropical fruits and vegetables, of which copra is the 
leading export. The island is heavily wooded, but the timber is un- 
suitable for building purposes, and in general, has little commercial 
value. There are no industries other than agricultural, with the 
exception of the production on a small scale and by hand of fiber mats^ 
tapa cloth, made from the inside bark of the paper mulberry, fans, 
baskets, hats, canoes, and other native articles. 

The total imfK)rts into Tutuila since 1911 are given in the following 
table : 

Table lb.— Imports into Tutuila,^ 1911-1919. 

[In thousands of dollars.] 



Fromthel'nited. 

States. 



From foreign 
countiles. 



Total 
value. 



Value. 



Percent 
of total. 



Value. 



Percent 
of total. 



Fiscal vear: 












1911 


S94 
110 
134 


S8 
13 
23 


8 
11 

17 


5586 
98 
110 


92 


1912 


89 


1913 


S3 


1914 


101 


42 


41 


59 


59 


1915 


111 


66 


59 


45 


41 


1916 


118 


101 


85 


18 


15 


1917 


110 


94 


85 


17 


15 


1918 .- 


146 


94 


65 


52 


35 


Calendar rear: 












1918 


112 


66 


59 


46 


41 


1919 


188 


103 


55 


85 


45 



- Figures for 1911 are from American Samoa, a general report of the governor, Washington, 1916, p. -39. 
Figures for 1912 to 1919, inclusive, are from United States Statistical Abstract, 1918, p. 555, and 1919, p. 539. 

The imports from countries other than the United States consist 
mainly of goods imported from (i. e. largely by way of) British pos- 
sessions in the Pacific, The following table gives statistics for the 
imports of 1911 by principal commodities: 

Table 16. — Imports into Tutuila, by principal commodities, 1911.^ 
[In thousands of dollars .] 



Article. 



; From the i From 
Total, i United I British 
! States. | colonies. 



Breadstuffs 


8.0 

25.2 

4.2 

19,4 

1.3 

2.9 

1.5 

3.8 

L4 

2.0 

8.1 

16.4 




7.8 


Cotton goods . .. 


0.5 
1.0 
.2 
.5 
•2 


18.1 


Fish. . . 


2.7 


Meats, etc 


19.0 


Leather 


.7 


Oils 


2.6 


Sugar 


1.5 


Lumber 





1.3 


Furniture 


.8 


Soap 


1.9 


Hardware 


1.3 
2.1 


5.8 


All other goods 


8.5 






Total . . . . 


94.2 


8.4 


70.7 







1 American Samoa, general report, p. 39. 
contains figures only through the year 1911. 



This report, the latest published by the Navy Department, 



UNITED STATES. 



613 



The following table gives the statistics of total exports for the 
years 1912 to 1918: 

Table 17 .—Exports of merchandise from Tutuila, 1912 to 1918} 
[In thousands of dollars.] 





Total 
value. 


To the United 
States. 


To foreign 
countries. 




Value. 


Per cent 
of total. 


Value. 


Per cent 
of total. 


Fiscal year: 

1912 


146 
133 

71 
121 

62 
198 
119 

136 
95 


22 
133 

71 
121 

62 
198 
119 

1.36 
95 


14 
100 
100 
100 
100 
100 
100 

100 
100 


124 


8S 


1913 . 




1914 




1915 . - 




1916 - 




1917 






1918 






Calendar year: 

1918 






1919 













1 United States Statistical Abstract, 1918, p. 555, and 19l'9, p. 539. 

It v/ill be noted that since 1912 all the exports have gone to the 
United States. Copra is the sole article of export. It is interesting 
to note that all copra for export is marketed by the naval governor 
for the natives, or at least had been for a number of years preceding 
the last report of the governor. All the taxes on natives are collected 
in this commodity before purchase is made. The quantities and values 
sold in alternate years are as follows: 

Table IS.— Eiyorts of copra from Tutuila, 1903-1911.^ 



Year. 


Thou- 
sands of 
pounds. 


Value in 
dollars. 


Year. 


Thou- 
sands of 
pounds. 


Value in 
dollars. 


1903 


1,132 

2,567 
2,059 


28,042 
65, 797 
70, 099 


1909 


2, 345 
3,374 


66, 228 


1905 


1911 


124,452 


1907 











1 American Samoa, general report, p. 36. 



ACQUISITION, GOVERNMENT, AND FINANCE. 

The Samoan Islands were independent territory, ruled by native 
chiefs, until the partition of the group between the United States and 
Germany in 1899. A treaty between the United States and the Gov- 
ernment of the Samoan Islands, signed January 17, 1878, and pro- 
claimed February 13, 1878, ceded to the United States the port of 
Pago Pago for use as a coaling and naval station for war and merchant 
vessels, opened the islands to American trade, stipulated that no 
import or export duties should be charged on the cargoes of American 
vessels entering or clearing from Samoa, and that tonnage duties on 
American vessels should not exceed one-half of 1 cent per ton. 

On June 14, 1889, during a state of insurrection in Tutuila there was 
signed at Berlin by the United States, Great Britain, and Germany a 
general act providing for the neutrality and independence of the 



614 COLONIAL TARIFF POLICIES. 

Samoan Islands and establishing a tripartite protectorate by the sig- 
natory powers, which was accepted by the Samoans. The general 
act contained a schedule of import duties and of internal taxes, to 
which the goods and persons of foreigners were to be uniformly 
subject. 

In 1898 civil war broke out in Samoa over the question of succession 
to the kingship and open hostilities ^'abetted more or less openly by 
the Germans" ^ resulted. In March, 1899, the British and French 
naval officers intervened in the civil struggle on the side of one of 
the claimants, under protest of the Germans, and on April 1, 1899, 
American and British sailors, part of a force engaged in an attempt 
to destroy some native villages, were killed from ambuscade. The 
three protecting powers thereupon decided that the only way to 
govern the Samoan Islands was to divide them among the powers. 
Great Britain and Germany entered into a separate agreement, by 
which Great Britain surrendered her claim to one of the islands upon 
Germany's ceding to Great Britain certain islands in the Solomon 
group. On December 2, 1899, was signed and on February 16, 1900, 
proclaimed a convention between the United States, Germany, and 
Great Britain which annulled earlier treaties relating to Samoa and 
divided the group between the United States and Germany. The 
native authorities in April, 1900, ackowledged the sovereignty of the 
United States in the islands allotted to the United States by this 
convention. 

On February 19, 1900, the President of the United States, by 
Executive order, placed the islands under the control of the Navy 
Department for a naval station, and instructed the Secretary of the 
Navy to take such steps as were necessary to establish the authority 
of the United States and to give to the islands the necessary protec- 
tion.^ The Secretary of the Navy on the same date appointed a 
naval officer as commandant over the islands with full authority. 
His regulations have the force of law in the islands, and in accordance 
with the instructions from the Navy Department, are not submitted 
for approval. Congress has passed no legislation dealing with the 
government or status of Samoa. ^^ Neither the Constitution nor the 
laws of the United States have been extended to them [the Samoan 
Islands], and the only administrative authority existing in them is 
that derived mediately or immediately from the President as Com- 
mander in Chief of the Army and Navy of the United States."^ 

The government of Samoa is based on Regulation No. 5, of May 1, 
1900, of the commandant of the naval station of Tutuila, which is still 
in force with amendments. ^^ 

This regulation provides that the laws of the United States be in 
force unless expressly modified; that the Samoan customs, not in 
confiict with the law, shall be preserved; and that the native forms 
of governm_ent for local divisions be maintained; and it establishes 
a judicial system. 

7 American Samoa, general report, p. 9. 

8 Memoranda furnished by the Navy Department for the iise of the Committee on Pacific Islands and 
Porto Rico, U. S. Senate, Washington, 1902, p. 38. 

» 25 Op. Atty. Gen. 292; idem, 128, p. 59. 

•0 The text of this regulation is to be found in Tutuila: General orders issued by naval governor, in force 
January, 1903, Washington, 1903, pp. 13-17. 



UNITED STATES. 615 

The expenses of government are met from the proceeds of taxation, 
and without subsidy from the United States. There is no public 
debt of any kind. License taxes are levied on occupations and on 
stores and warehouses. In addition, '^native taxes" are assessed on 
each local district by the naval governor, and are collected by the 
local governing bodies in naval produce, the proceeds from the sale 
of such produce being turned over to a treasurer appointed by the 
governor. The native taxes are paid in copra, and most of the 
persons subject to license taxes are exempt from the native taxes. 
Additional revenue is secured from customs duties on imports. 

THE TARIFF ON IMPORTS INTO AMERICAN SAMOA. 

Article III of the convention of 1899, between the United States, 
Great Britain, and Germany stipulated that each of the signatory 
powers should enjoy equal privileges in the ports of the Samoan 
Islands with respect to commerce and shipping. ^^ 

The first tariff on imports was enacted by regulation of the com- 
mandant. No. 2, of April 24, 1900.^^ It provided for specific duties 
on tobacco and cigars, and wines, liquors, and beer, and an ad valorem 
duty of 2 per cent on all other goods imported. The specific duties 
vf ere as f ollow^s : 

Beer, ale, or porter per gallon . . $0. 50 

Sph'its and all spirituous compounds do 2. 50 

Wine, except sparkling do 1. 00 

Wine, sparkling do 1. 50 

Tobacco per pound . . .50 

Cigars do 1 . 00 

By subsequent regulations, the importation of alcoholic beverages 
was made subject to the grant of a special permit from the comman- 
dant, and the sale of such beverages to natives was prohibited. ^^ 
The importation of opium except by permit was prohibited, and duties 
of $1 to $16 per pound on solid opium and 40 per cent ad valorem on 
liquid preparations thereof, were stipulated by Regulation No. 3, 
1902.1* Subsequent regulations totally prohibited the importation 
of opium, and prohibited the importation without special permit of 
medicines and drugs, stallions, all other animals except domestic 
animals, and firearms and ammunition. 

The rates on imports are revised at irregular intervals by regulation 
of the commandant. The tariff in force in January, 1921, contains a 
free list of 11 items; a list of 7 articles subject to specific duties; 2 
items subject to specified ad valorem duties ; and a geileral provision for 
an ad valorem duty of 15 per cent for articles not elsewhere specified. 
In computing ad valorem duties, freight charges from the shipping 
point, but not fumigation, handling, and other overhead charges, are 
included. Shotgun cartridges are duitable at 60 per cent ad valorem 
and other articles included under the term " arms," at 25 per cent. 

11 For the annulment of the German rights under this article by the treaty of peace of 1919, see p. 577. For 
the attitude of the Government of New Zealand toward this treaty, see p. 277. 
1'^ Tutuila: General orders, 1903, pp. 6-8. 

13 iijid, Regulations Nos. 10 (1900) and 19 and order of May 7, 1902. 
H Ibid., p. 72. 



616 COLOXIAL TABIFF POLICIES. 

The list of articles subject to specific duties comprises tobacco and 
products thereof, nonalcoholic beverages, and firearms. The follow- 
ing are the specific duties: 

Cigars and cheroots per hundred . . SO. 30 

Cigarettes do 10 

Other tobacco per pound . . .25 

Ginger ale, soda water, mineral water?, etc.: 

In I pint bottles per dozen . . .12 

In 1* pint bottles do 20 

In larger bottles per gallon . . .10 

Firearms each . . 4 . 00 

The free list comprises fresh meat, fish, regetables, and fruits; ice; 
live animals and bu*ds; seeds, plants, bulbs, and cuttings; wearing 
apparel, articles of personal adornment, toilet articles, etc., of persons 
arriving, for their own use; school supplies and printed matter. 

The duties of the Samoan tariff are collected on importations from 
the United States in like manner as on importations from foreign 
countries, 

TREATMENT OF IMPOSTS FROM SAMOA IXTO THE UNITED STATES. 

At the date of acquisition of Samoa hj the United States the tariff 
act of 1897 was in force. As formal possession of Samoa by joint 
resolution of Congress had not been made, the question was soon 
raised as to whether merchandise shipped from Samoa to the United 
States was entitled to free entry. On December 6, 1900, the Depart- 
ment of State expressed the view that Pago Pago in Tutuila was not a 
''foreign port or place"' within the meaning of the law imposing a 
tonnage tax upon vessels coming from a foreign port or place. On 
December 8, 1900, the Treasury Departm-ent ruled (T. D. 22661) that 
such a tax was not collectible upon a vessel from Pago Pago. In view 
of these opinions, the Attorney General issued an opinion on February" 
17, 1902, to the effect that United States tariff laws, imposing duties 
upon goods from ''foreign countries", were not applicable to goods 
imported from American vSamoa.^° As there are no exports from 
Samoa other than copra, which is on the free list of the United States 
tariff, the issue was not an important one. The subsequent tariff 
acts of the United States, by providing for the taxation, of imports 
only from foreign countries, has continued the free admission into the 
United States of Samoan products. ''Customs duties may be col- 
lected in the United States, however, on goods shipped from Tutuila, 
unless they are certified to be products of the islands or goods on 
VY*hich duty has been collected in those islands." ^^ Samoa presents 
the only instance of the grant hj the United States of a preference to 
a territory which does not grant one in return. 

COASTWISE TRADE. 

The merchant marine act of July 5, 19^0 (sec. 21), provides for the 
application to Samoa as an island territor}^ or possession of the United 
States of the laws restricting trade between American ports to vessels 
of American registry. ^^ Vessels ovued by Samoans are not entitled 
to American registry, but are entitled to fly the American flag.^^ 

15 Tutuila. Memoranda, etc., 1902, pp. 29-40; and 23 Op. Atty. Geu. 629. 

15 American Samoa, p. 11. 

1' See p. 61. 

i« American Samoa, etc., p. 11. 



UNITED STATES. 



617 



GUAM. 



GENERAL DESCRIPTION. 



The island of Guam is the largest, most populous, and southern- 
most of the Ladrones (Mariannas), 1,506 miles from Manila, 3,337 
miles from Honolulu, and 5,053 miles from San Francisco. It is 30 
miles long, 7 miles in average width, and contains about 210 square 
miles. The principal town, Agana, with a population of 7,000,. lies 
about 8 miles from the harbor of Apra. The population, originally 
Chamorros, now mingled with Tagalos and Malays, in 1920 numbered 
13,275, including about 200 foreigners, exclusive of the Navy per- 
sonnel and officials of the United States. 

ACQUISITION AND GOVERNMENT. 

The island was acquired by the treaty of Paris, signed December 10, 
1898, which ended the war with Spain. Because of its strategic loca- 
tion between Hawaii and the Philippines, it was decided to make it 
serve solely as a naval station. Accordingly, a commander of the 
Navy was made governor, with full legislative, executive, and judicial 
powers. Such administrative control continues to the present time^ 
and Congress, in fact, has never passed any legislation for the govern- 
ment of the island. 

The following table shows what little trade there is for the years 
1900, 1913, and 1919: 

Table 19.— Total trade of Guam for 1900, 1913, and 1919.^ 
[Value in thousands of dollars.] 





Imports. 


Exports. 


Year. 


Total 
value. 


From United 

States. 


From foreign 
countries. 


Total 
value. 


To United To foreign 
States. 1 countries. 

1 




Value. 


Percent 
of total. 


Value. 


Per cent 
of total. 


Value. 


Percent 
of total. 


Value. 


Per cent 
of total. 


1900 


1 
160 
447 


1 

75 
314 


100.0 
46.5 
70.0 






13 
37 
65 


13 


100.0 






1913 


85 
133 


53.5 
30.0 


37 
15 


100. 


1919 


49 




76.3 


23.7 







1 Figures are from United States Statistical Abstract, 1905, p. 229; 1914, p. 488; 1919, p. 539. 



COMMERCIAL IMPORTANCE. 



The tropical climate and fertile soil combine to support the purely 
agricultural population with little effort on their part. Copra is the 
most important product. Cacao, coffee, corn, sweet potatoes, and 
various fruits grow easily, but barely enough food is raised for 
immediate human needs. Copra is marketed for the natives by the 
governor and transported in naval vessels. 

Table 20 shows the total income and expenditure and the principal 
sources of revenue and the main heads of expenditure for the fiscal 
year ending June 30, 1916. 



618 COLONIAL TARIFF POLICIES. 

Table 20. — Revenues and expenditures of Guam for the fiscal year 1916.^^ 

Revenues: 

Taxes S15, 300 

Licenses and fees (excluding excise) 10, 200 

Fines and court fees 8, 100 

Excise 9, 700 

Customs (including liquors) 8, 000 

Receipts from sales of electricity, water, ice, etc 34, 000 

All other 6, 500 

Total revenues 91, 800 



Expenditiu'es: 

Agriculture 5, 200 

Customs 1, 000 

Executive 13, 100 

Ci\'il registrv 900 

Education. ." 8, 400 

Judiciary 6, 000 

Police 4, 900 

Public works 21. 400 

Treasury 1, 800 

ilaintenance of municipal and government undertaking (principally ice 

plant, water system, electrical plant, government farm, etc.) 24, 400 

Total ordinar}- expenditures 87, 100 

Excess of receipts over ordinary expenditures 4, 800 

TARIFF REGULATIOXS. 

The present schedule of customs duties has been in force since- 
February 1, 1900, when a list of 197 items was specified by Executive 
order of the President, The free list includes live animals, raw 
cotton, and cotton 3^arns, fertilizers, nevrspapers, periodicals, and 
books, machinery of ail kinds, and all articles brought in by travelers 
for personal use. Foodstuffs in general are taxed very lightly, from 
0.06 to 0.50 of a peso ($0.03 to $0.25) per 100 kilos; boots and shoes 
on an average of 0.25 of a peso per pair; iron in various forms about 
0.3 of a peso per 100 kilos; cotton goods, about 0.4 of a peso per 
kilo: and other commodities in similar ratio. After enumerating 169 
items, the schedule provides for a 10 per cent ad valorem duty on 
crude materials not othervvdse provided for and a 20 per cent ad 
valorem duty on "goods, wares, merchandise, and effects not other- 
wise enumerated.'/ All articles from the United States enter free. 

All products of Guam imported into the United States are free of 
duty, if accompanied by the required certificate of origin. But see 
page 579 for the provision of the Fordney bill regarding imports from 
Guam and Samoa. 

THE VIRGIN ISLANDS. 

GENERAL DESCRIPTION. . 

The West Indian Islands acquired by the United States from 
Denmark are three in number, namel3^ St. Thomas and St. John in 
the Virgin Islands, and St. Croix. Although the last named is not 

, IS The Island of Guam, 1917, p. S2. These figures are the latest that could be furnished by the Navy 
Department. Figures extending to the last cent have been reduced or raised to the nearest hundred doUars. 
The full totals are $91,816.40 and 187,058.92, a difference of 14,757.48. 



UNITED STATES. 



619 



properly included in the Virgin Islands group, the three are now called 
the Virgin Islands of the United States. St. Thomas, the smallest of 
the three, l^ang 40 miles east of Porto Rico, is the most important, 
partly because it is a prominent coaling station and depot of trade 
with the West Indies, but primarily because of its splendid harbor. 
The island is 12 miles long from east to west and from 1 to 3 miles 
broad, comprising 30 square miles. Immediately east lies St. John, 
8 miles long from east to west, comprising 20 square miles. Its port, 
Coral Bay, on the east side, is said to be the best harbor of refuge in 
the Antilles during cyclones. St. Croix, the largest of the three, lies 
40 miles south of St. Thomas and 65 miles southeast of Porto Rico. 
It is of irregular breadth, 19 miles long, approximately 84 miles in 
area, and possesses two harbors. 

St. Croix has a population of about 15,000, St. Thomas about 10,000, 
and St. John about 1,000 persons ;^^ about 80 per cent are negroes 
engaged in the cultivation of sugar cane. Christians ted, the capital 
of the group, situated on St. Croix, is the most important town. St. 
Thomas is important, as the natural port of call for all European trade 
bound to the West Indies, Central America, or northern South 
America. 



COMMERCIAL IMPORTANCE. 



The soil, especially in St, Croix, is very fertile and produces easily 
large crops of sugar cane, corn, and various vegetables. It is adapted 
also to the raising of pineapples, bananas, and other tropical fruits, 
the cultivation of vdiich on a more extensive scale would yield rich 
rewards. A large part of the world's supply of bay rum comes from 
the islands, and Santa Cruz rum has for centuries been a well-known 
product. There a.re practically no manufacturing establishments 
except sugar-cane mills. 

St, Thomas, once a very flourishing harbor, has fallen into decay. 
Formerly one of the chief bunkering ports of the West Indies, it has 
now lost all but a small fraction of its former business, so that the 
people of the city earnestly petitioned the congressional committee of 
investigation to make every effort to secure for their city the status of 
a free port.^^ 

The following table shows imports and exports for 1918, 1919, and 
the first six months of 1920: 



Table 21. — Total trade of the Virgin Islands, 1918, 1919, and first six months of 1920. <^ 

[In thousands of dollars.] 





Imports. 


Exports. 


Year. 


Total 
value. 


From United States. 


Total 
value. 


To United States. 




Value. 


Per cent 
of total. 


Value. 


Per cent 
of total. 


1918 


1,892 
2,277 
1,800 


1,640 
1,804 
1,500 


87 
79 
83 


1,249 
1,920 
1,132 


1,138 
1,593 
1,035 


91 


1919 


83 


1920 (to June 30) 


9i 







io Virgin Islands, report of joint commission, Congress of the United States, 1920, p. 

21 Report of joint commission, p. 23. 

o Supplement to Commerce Report, No. 77a, Sept. 22, 1920. 



185766^ 



40 



^2^0 



COLONIAL TARirr POLICIES. 



The values of principal comiiiodities imported from tlie United 
States for 1918 and 1919 are shown in the following table: 



Table 



Value of imports into the Virgin Islands from the United States, by classes 
of commodities, 1918 and 1919} 



Commodity group. 


1918 


1919 


Commodity group. 


1918 


1919 


Agricultural implements 

Breadstuff s. . 


83,476 
449,092 

21,400 
105,329 

10,780 
.133, 547 


S6,80S 
397, 686 

29, 768 
151,884 

20, 548 
148,927 


Leather and manufactm'es of. . 
Meat products 


$46,594 
110,960 
65, 723 
20,432 
46, 339 


$48,116 
108,661 

7^ 883 






Cotton manufactures 

Ele'^trical machinery 


Paper and manufactures of. . . 
Wood and manufactures of . . . 


38^211 
59,317 


Iron and steel, manufactures of 



1 Supplement to Commerce Reports, No. 77a, Sept. 22, 1920. 

The values of exports to the United States by classes of commodi- 
ties are indicated for the years 1918 and 1919 in the following table: 

Table 23. — Value of exjyorts to the United States from the Virgin Islands, hy classes of 

commodities, 1918 and 1919} 



Article. 


Value. 


Article. 


Value. 


1918 


1919 


1918 


1919 


Sugar cane 


$940,499 

31,887 

15, 955 

10,105 

5,023 


«1, 387, 852 

77,562 

43, 706 

14,357 

9,890 


Shells 


82,o60 

26,216 
38.271 
66; 985 


?;4 490 


Articles, the growth, prod- 
uce, etc., of the United 
States, returned ^. . 


Chemicals, drags, etc. (all 

other besides gums) 

Coffee 


1,302 


All other articles 


53,961 




Total 






1,137,501 


1.593,120 









Supplementto Commerce Reports, No, 77a, Sept. 22, 1920. 



ACQUISITION AND GOVERNMENT. 

After negotiations which extended over half a century, the United 
States acquired sovereignty over the islands by ratifications exchanged 
January 17, 1917. The treaty signed August 4, 1916, provided for 
the cession by Denmark to the United States of all her territory in 
the West Indies and of all public property therein, in exchange for 
$25,000,000 in gold to be paid within 90 days from the date of the 
exchange of ratifications of the treaty. Certain commercial conces- 
sions which had been granted by Denmark, such as the right of the 
Danish West Indian Bank to issue money, were to be continued by 
the United States in accordance with the terms of the concessions. 
Congress, hj act of March 3, 1917, appropriated $25,000,000 to be 
paid to Denmark in fulfilment of the terms of the treaty. ^^ 

22 The United States first attempted to purchase the Danish West Indies in 1865. It was not, however, 
until July 17, 1866, that the United States made a definite offer of 15,000,000 for the three islands. Denmark 
demanded a higher price than this, and agreement was finally reached on the sum of S7,500,000 for the t vo 
islands, St. Thomas and St. John. The question of cession was first submitted to a plebiscite of the in- 
habitants of the islands, and was approved bv 1,244 votes in favor and 22 against. The United States 
Senate refused, however, to ratify the treaty (1870). 

The purchase of the islands was again considered by Secretaries Foster and Olney during the Harrison 
and Cleveland administrations, but nothing came of it. On March 31, 1898, the "Senate Committee on 
Foreign Relations reported to the Senate a biU authorizing the President to purchase the islands for use 
as a naval and coaUng station. On January 24, 1902, representatives of the United States and Denmark 
signed a convention for the cession of the islands to the United States in return for a payment of §5,000.000 
to be made to Denmark. This convention was ratified by the United States Senate on February 17, 1902, 
but it failed of ratification, by a vote of 32 to 32, in one house of the Danish Rigsdag. 



UNITED STATES. 621 

The act of March 3, 1917, stipulated that, except as therein other- 
wise provided, aU mihtary; civil, and judicial powers necessary to 
govern the islands should be vested in a governor and in such person 
or persons as the President might appoint, and should be exercised 
in such manner as the President should direct, until Congress should 
provide for the government of these islands. The President was 
authorized to assign an officer of the Army or Navy to act as gover- 
nor^ provided, however, that the appointment should be made with 
the advice and consent of the Senate. A naval governor, reporting 
to the Navy Department, was later appointed. 

The laws relating to elections and judicial tribunals, and the other 
local laws in force at the time of cession of the islands to the United 
States were to continue in force until Congress should otherwise pro- 
vide, but with the approval of th^ President, or under such rules and 
regulations as the President should prescribe, any of these laws 
could be repealed, altered, or amended by the colonial council having 
jurisdiction, with the exception of laws imposing taxation. 

FINANCE. 

All laws imposing taxes, in effect on the date of ratification of the 
treaty of cession, were continued in effect, by the act of March 3, 
1917, until Congress should otherwise provide, with the exceptions 
that American products were made free of customs duty upon im- 
portation into the islands, and that the export tax on sugar was 
increased. 

The government revenues are raised largely by import duties, export duties on 
sugar, trade and lamp taxes, vehicle taxes, boat taxes, real estate taxes, tonnage 
fees, and a head tax on all persons leaving St. Thomas for other countries. ^^ 

Congress appropriates 1100,000 annually to meet the deficit in 
the revenues of the islands, but the governor of the island has 
reported that this was proving insufficient. There was considerable 
poverty in the islands during the war, and it was estimated that 
fully 10 per cent of the population in 1919 were paupers. ^^ 

TARIFFS OF THE VIRGIN ISLANDS. 

Section 4 of the act of March 3, 1917, stipulated that until Congress 
should otherwise provide all tax laws in effect on that date, including 
the customs laws and regulations, should, in so far as compatible 
with the changed sovereignty and not otherwise therein provided, 
continue in force, except that articles produced or manufactured in 
the United States should be admitted into the islands free of duty.^* 
Section 5 provided that the proceeds of such taxes should be used, 
under rules prescribed by the President, for the government and 
benefit of the islands. There were two separate tariffs on imports 
in force in the islands under the Danish regime, one for St. Croix and 
the other for St. Thomas and St. John. These continue in effect under 
the United States act of March 3, 1917, with the exception stated 
above that products of the United States enter free. The tariffs 

28 U. S. Department of Commerce, Special Agents Series No. 129, The Danisii West Indies, Washington, 
7, p. 11. 
" American Year Book, 1919, p. 269. 
« For provision for increase in export duty on sugar, see p. 623. 



622 COLONIAL TARIFF POLICIES. 

under the Danish regime were uniformly applied to imports from all 
sources, there being no preference to Danish goods. 

THE TARIFF OF ST. CROIX. 

The tariff of St. Croix ^^ consists of (a) the free list ; (h) articles 
subject to specific duty; (c) articles subject to ad valorem duties 
assessed on official valuations stated in the tariff and dating from 
1887 and 1906; (d) duties on spirituous liquors: and (e) duties on 
unenumerated articles. 

The free list covers 20 items, including such articles essential to 
the industries of the island as hogsheads and puncheons for sugar, 
rum, and molasses; agricultural implements; apparatus for the dis- 
tillation of rum and for sugar mills; machinery and parts thereof; 
coal; manures and fertilizers; and essential articles of consumption, 
such as fresh fish and fresh garden produce and vegetables = 

The articles in the group subject to specific duties include only 
foodstuffs, namely, flour, bread, dried, salted, smoked, or pickled 
fish, butter, cheese, lard, peas, and beans. The duties range from 
25 cents to $1.50 per 100 pounds, with the exception of peas and beans, 
which pay 25 cents per barrel. 

The articles in groups (c) and id) are miscellaneous in character. 
The official valuations appear to be moderate as a rule. In several 
instances, the ad valorem rates are based on actual valuations. The 
ad valorem duties are either 5 or 12^ per cent. 

The duty on spirits is $1 a gallon, on mne 25 per cent ad valorem, 
and on beer 20 per cent ad valorem, based on actual values. 

Goods not enumerated in the tariff pay duty on an ad valorem 
basis assessed on the invoice value plus 25 per cent.-^ 

The duties are collected on im.ports from St. Thomas and St. John 
in the same manner as on imports from other sources, with the excep- 
tion that for unenumerated articles 15 per cent is added to the 
invoice value for the purpose of customs assessment instead of 25 
per cent. 

Export duties of 5 per cent ad valorem on cotton and 3 per cent 
ad valorem on syi^up, rum, and cottonseed are collected in St. 
Croix, presumably on exports to any country, including the United 
States. The United States act of March 3, 1917, substituted a 
duty of $8 per short ton of sugar in lieu of the duty of 6 per cent ad 
valorem then in force. At the time this duty was imposed, it was 
to be levied on exports to all countries, including the United States, 
and is the only export tax specifically enacted by the United States 
Congress in force anywhere in the United States or in its possessions. 

The excise duty collected on rum manufactured in St. Croix con- 
taining up to 54 per cent of pure alcohol ranges from 20 cents to 50 
cents a gallon, according to the alcoholic content. The import duty 
on rum is $1 a gallon. Loaf sugar pays a duty of IJ cents a pound. 
These duties may have been intended to have a protective effect 
with respect to domestic industries. The other duties levied are 
unquestionably in the main intended purely for revenue purposes. 

M St. Croix import tariff in force for Apr. 1, 1909, law of January, 1909. Christiansted, St. Croix, 1909. 
27 " Goods not enumerated" means goods for which specific duties or official valuations are not specified 
in the tariff. 



UNITED STATES. 623 

ST. THOMAS AND ST. JOHN. 

The Danish tariff for St. Thomas and St. John put into force on 
April 1, 1907, contains a general provision for the taxation of im- 
ports at the rate of 6 per cent ad valorem. ^^ There are a number of 
exceptions to this general rule, however: 

(1) All goods for the Government admitted free. 

(2) Fresh fish, fruits, and vegetables; coal, mules, and asses; 

printed books and stationery; gold and silver in ingots and 
coins and furniture and apparel owned by the importer, 
admitted free. 

(3) Casks for sugar, rum, and molasses; staves, headings, and 

hoops; agricultural implements; equipment for sugar mills 
and mill timber; fire brick; machinery and parts; and 
manure, admitted free if imported for use in St. John and 
not landed at St. Thomas; subject to duty if landed at St. 
Thomas, the dntj thus paid to be refunded in case it be 
proved to the satisfaction of the customs department that 
the goods have subsequently been put to use for agricul- 
tural purposes in St. Thomas or St. John. 

(4) All goods on which duty has been paid in St. Croix, and which 

are imported in Danish vessels (the United States act of 
March 3, 1917, by implication at least, repeals this require- 
ment and the similar requirement in the next section for 
importation in Danish vessels), admitted free. 

(5) All products of St. Croix imported in Danish vessels, ad- 

mitted free. 
There were also provided export duties of 5 per cent ad valorem 
on sugar; and 6 bits ($0,012) per gallon on rum and molasses. The 
export duty on sugar was changed to $8 per short ton by the United 
States act of March 3, 1917. 

TARIFF TREATMENT OF IMPORTS INTO THE UNITED STATES. 

Section 3 of the act of March 3, 1917, provides that articles, the 
growth or product of the islands acquired from Denmark, or manu- 
factured in these islands from materials the growth or product of 
these islands or of the United States, or those which do not contain 
foreign materials to more than 20 per cent of their total value, upon 
which no drawback of customs duties has been allowed in the is- 
lands, shall be admitted into the United States free of duty. Im- 
ports from these islands not coming under these provisions are made 
subject to the same rates of duty as are levied upon imports from 
foreign countries. 

Congress, in section 1000 of the act of October 3, 1917, provided 
that imports into the United States from these islands and imports 
into these islands from the United States should be subject to the 
internal-revenue taxes of the country of destination only. The 
proceeds of all taxes and duties collected on imports into the United 
States from these islands are turned over to the insular treasury.^^ 

A provision which for a short time granted special treatment to 
certain products of the Virgin Islands is found in the act of Febru- 
ary 24, 1919. By section 601 of this act, no distilled spirits, pro- 

28 Board of Trade Journal, Juue 20, 1907. 29 United States act of Mar. 3, 1917, sec. 5. 



624 COLOI^IAL TAKIFF POLICIES. 

duced after October 3, 1917, might be imported into the United 
States from Porto Kico, the Philippines, or any foreign country^ 
for use as a beverage or as an element in the manufacture of a bever- 
age. But a parenthetical exception allowed the importation of 
distilled liquors from the Virgin Islands, provided they were ''pro- 
duced from products the growth of such islands," and provided 
they were not imported into a State, Territory, or district in which 
the manufacture or sale of intoxicating liquors was prohibited. It 
became impossible to comply with this last proviso when a con- 
stitutional amendment and a Federal statute prohibited the manu- 
facture and sale of intoxicating liquors throughout the States and 
Territories. 

PANAMA CANAL ZONE. 

ACQUISITION. 

On November 18, 1903, the United States concluded a convention 
with the Kepublic of Panama, wiiereby Panama was to receive 
$10,000,000 in gold upon the exchange of ratifications and, beginning 
nine years thereafter, $250,000 annually, during the life of the con- 
vention; and the United States was to receive ^'in perpetuity the 
use, occupation, and control of a zone of land and land under water 
for the construction, maintenance, operation, sanitation, and pro- 
tection of said Canal." The zone was 10 miles wide, 5 miles on 
either side of the center line of the canal to be constructed,, extending 
across the Isthmus, but not including the cities of Colon and Panama 
and their adjacent harbors. ^° In addition, the United States acquired 
by this convention such other lands and waters outside the strip as 
might be necessary for the construction, maintenance, operation, or 
protection of the canal, as well as a number of small islands. AH 
rights of government in the Canal Zone were transferred to the United 
States. 

GOA-ERNMENT. 

From 1904 to 1912 the administration of the Canal Zone was 
lodged, by direction of the President, in the hands of a commission.^^ 
The present form of administration was constituted by the act of 

30 In 1875 a French company began the construction on a large scale of a canal across the Isthmus of Pan- 
ama, but in 1894 the company went into the hands of a receiver. The receiver organized a ne^v company, 
but little further progress was made m actual construction. In the nineties, the United States began to 
take an active interest in the project for a transisthmian canal, and Congress authorized the emploj-ment 
of engineers to investigate tlie possibilities of the Nicaraguan and Panama routes. In 1901 the engineers 
reported in favor of the Panama route, provided the rights and properties of the new Panama Canal Co. 
could be purchased for an amoimt not exceeding 340,000,000. 

By the Spooner Act of June 28, 1902, Congress authorized the President to acquire from the Republic of 
Panama pe'rpetual control of a strip of land across the Istb-mus of Panama, for the purpose of constructing, 
maintaining, operating, and protecting a oanal, provided the rights of the Panama Canal Co. could, be 
pm-ehased for 840,000,000. The company was wilhng to sell its rights, but a treaty negotiated with Colom- 
bia in 1901, whereby the United States was to acquire the strip of land and the necessary control thereof, 
failed of ratification in Colombia. On November 18, 1901, the Province of Panama seceded from Colombia, 
and the United States at once recognized its independence. 

31 Under the Spooner Act of 1902, the President had been authorized, upon the acquisition of the Canal 
Zone, to establish judicial tribunals to enforce the rules and regulations which he miglit deem proper and 
necessary to presence order and public health, and to create an Isthmian Canal Com mission of seven mem- 
bers, of v/hom four were to be skilled engineers. On Apr. 28, 1904, Congress passed an act more specifically 
providing fox the government of the Canal Zone. This law provided that until the expiration of the Fifty- 
eiglith Congress (Mar. 4, 1905), unless provision for a temporary government were sooner made by Con- 
gress, aU military, civil, and judicial powers, as well as the power to make ail rules and regulations"^neces- 
sary for the government of the Canal Zone, and all the rights, powers, and authority granted by the terms 
of the convention to the United States were to be vested in sucli person or persons and should l5e exercised 
in such manner as the President might direct for the government of the Zone. 

On Mar. 8, 1904, the President appointed the Isthmian Canal Commission. On May 9, 1904, tl^ie Presi- 
dent placed the canal, its construction, and all work incident thereto, under the supervision of the Secre- 



UNITED STATES. 625 

August 24, 1912, by which the President was authorized to discon- 
tinue the Isthmian Canal Commission when in his judgment the 
construction of the canal had reached a stage where it was no longer 
needed, and thereafter — 

to complete, govern, and operate the Panama Canal and govern the Canal Zone, or 
cause them to be completed, governed, and operated, through a Governor of the 
Panama Canal and such other persons as he may deem competent to discharge the 
various duties connected with the completion, care, maintenance, sanitation, oper- 
ation, government, and protection of the canal and Canal Zone. 

Thus the whole administrative function was entrusted to the 
governor. At the same time the act ratified as binding all Laws, 
orders, regulations, and ordinances adopted and promulgated in the 
Canal Zone by order of the President. 

The result of this legislation is the creation of an establishment the main function 
of which is the operation and maintenance of the canal, in connection with which is 
a bureau * * * of civil affairs sufficient for the government of the force engaged 
on the work, and of such others as might continue residents of the zone until the 
depopulation is effected. While it still continues as a government by executive 
order it differs from the one in effect during the construction period in that the Presi- 
dent is not permitted to change or in any way modify the orders already in effect, 
this necessitating action by Congress. '^^ 

TARIFF HISTORY. 

Among the instructions of the President to the first Isthmian Com- 
mission was the order ^'to raise and appropriate revenues in said 
zone; and all taxes, judicial fines, customs duties, and other revenues 
levied and collected in said zone by or under the authority of said 
commission shall be retained, accounted for, and disbursed by said 
commission for its proper purposes." ^^ Where the effect of tax 
legislation would, extend beyond the limits of the Canal Zone, as in 
the case of customs duties, the commission had no authority, and 
action by the President was necessary.^* 

On the recommendation of the commission, the President, through 
the Secretary of War, issued an order on June 24, 1904,^^ constitut- 
ing Cristobal on the north and Ancon on the south the customs 
ports of the Canal Zone, and opening the Canal Zone to the com- 
merce of all nations. Duties were to be collected on imports from 
foreign countries equal to the duties collected on similar imports 
into the United States. Goods entering the Canal Zone from the 

tai'y of War, and vested in tlie Istbmian Canal Commission all the governmental power over the Canal 
Zone given to him by the acts of June 28, 1902, and Apr. 28, 1901. The laws in force in the Canal Zone at 
the time of cession oi the zone to the United States were to continue until altered or annulled. Authority 
was given to the commission to legislate on all subjects not inconsistent with the United States laws and 
treaties applicable to the zone, such legislative power to include the pov/er to raise revenues In the zone by 
taxes and Judicial fines, and by other means. Four members of the commission were to constitute a 

auorum for the purpose of legislation. Maj. Gen. George W. Davis was appointed first governor of the 
anal Zone, with general executive power. 

In September, 1904, the commission, acting in its legislative capacity, organized the department of civil 
administration as "the government of the Canal Zone," authorized to exercise judicial and executive 
rights of government in the Canal Zone, and consisting of the governor, the executive secretary, the treas- 
urer, the auditor, a bureau of education, and departments of public health, revenues, police, prisons, and 
justice. 

The commission continued to exercise its legislative powers until Mar. 4, 1905, when the Fifty -eighth 
Congress ended its term without providing legislation for tlie government of the zone, and without con- 
tinuing the authority granted to the President by the act of Apr. 28, 1904. The President continued to 
govern through Executive orders. 

By a series of Executive orders of the President, from Apr. 1, 1905, to Jan. 8, 1908, all legislative and ex- 
ecutive authority was ^'ested in the chairman of the commission, and although the commission continued 
in existence, it exercised no executive authority. 

32 Goethals, G. W.: The GoA-ernment of the Canal Zone, 1915, pp. 97, 98. 

33 Ibid., p. 17. 
a^Ibid., p. 21. 

»5 The text of the order is printed in United States Foreign Relations, 1904, pp. 586, 587. 



626 COLONIAL TARIFF POLICIES. 

United States or its possessions were to be admitted free of duty. 
The gOYernor of the Canal Zone was authorized to negotiate a '' tenta- 
tive agreement^' providing for reciprocal trade relations with the 
Repubhc of Panama, and for " sl readjustment of customs duties 
and tariff regulations so as to secure uniformity of rates and privileges 
and avoid the disadvantages resulting from different schedules, 
duties, and administrative measures in limited territory subject to 
the same conditions and not separated by natural obstacles.'^ ^^ To 
carry out the terms of the order, a division of revenues, imposts, 
and customs was estabhshed under the department of civil adminis- 
tration.^^ 

This order led immediately to protests from the merchants of 
Panama and the government of the Repubhc, and to serious contro- 
versies betvv^een officials of the Canal Zone and of the Republic. ^^ 
The merchants of Panama objected to the order on the ground that 
their sales in the Canal Zone would be lost to the merchants of the 
Canal Zone, because merchants in the Zone would be able under the 
order to import goods duty free from the United States, whereas 
the goods of the Panama merchants would be subject to the rates 
of the United States tariff act of 1897. The government of the 
Republic of Panama denied that the United States had acquired 
under the treaty of 1903 any rights of sovereignty over the ports of 
Ancon and Cristobal, and denied, further, that the admxinistration 
of the Canal Zone had under that treaty the right to maintain its 
own fiscal system or to collect import duties in any part of ihe zone. 
It urged also that the free admission of all American products and 
the collection of duties on foreign imports by the Canal Zone govern- 
ment would deprive the treasury of the Panama Republic of an 
important source of revenue. 

Article III of the convention of 1903 is as follows: 

The Republic of Panama grants to the United States all the rights, power, and 
authority within the zone * * * which the United States would possess and exer- 
cise if it were the sovereign of the territory within which said lands and waters are 
located to the entire exclusion of the exercise by the Republic of Panama of any 
euch sovereign rights, power, or authority. 

The United States rested its claims on this article, but the Republic 
of Panama denied that it implied full and unlimited sovereignty. 
Article XIII granted to the United States the right to 

import at any time into the said zone and auxiliary lands, free of customs duties 
imposts, taxes, or other charges, and without any restrictions, any and all vessels, 
dredges, engines, cars, machinery, tools, explosives, materials, supplies, and other 
articles necessary and convenient in the construction, maintenance, operation, 
sanitation and protection of the canal and auxiliary works, and all pro\isions, medi- 
cines, clothing, supplies and other things necessary and convenient for the officers, 
employees, workmen and laborers in the ser\ice and employ of the United States 
and for their families. 

Article X further enumerated effects which were to be free from 
taxation by the Republic of Panama in the Canal Zone, but made no 
mention of import duties. Article IX stipulated that the towns of 
Panama and Colon were to be free ports, but that the Republic of 
Panama could collect customs duties on goods landed there, if 

'6 Sees. 1, 5, 6, 7, and 9. 

3' Goethals, G. W.: Op. cit., pp. 21, 22. 

38 Of. United States Foreign Relations, 1904, pp. 587,588. 



UNITED STATES. 627 

destined for consumption in the rest of the RepubHc of Panama. 
The convention made no expUcit provision, other than the exemp- 
tions from taxation stipulated in Article XIII quoted above, with 
regard to the taxation of imports into the Canal Zone. The Republic 
of Panama claimed, on the other hand, that its right to levy taxes 
within the Canal Zone was implicitly acknowledged in the convention 
by Articles X and XIII, which in surrendering the right to levy 
certain types of taxes implied the continued right to levy taxes of 
every kind not enumerated. 

In order to settle the controversy, which was causing considerable 
excitement among the officials and public of Panama, the sections 
of the President's order of June 24, 1904, which authorized the 
governor of the Canal Zone to negotiate a customs agreement with 
Panama and which had theretofore been withheld from publication, 
were made known to the Panama Government on August 9, 1904, 
and a form^al invitation was extended to Panama to enter into 
negotiations leading to a solution of the matters in controversy.^^ 
This invitation was accepted, and in November, 1904, Secretary of 
War Taft was sent to Panama to carry on the negotiations for the 
United States. In the meanwhile an informal modus vivendi 
maintained the status quo. 

An agreement was soon reached, and on December 3, 1904, the 
President issued an Executive order ^^ embodying the agreement, 
to take effect December 12, 1904.^1 

Section 1 of the Executive order stipulated that no goods should 
be entered at Ancon or Cristobal, the ports of entry of the canal, 
except those described in Article XIII of the convention of 1903, 
except goods in transit across the isthmus for a destination without 
its limits, and except coal and fuel oil for passing ships, such coal 
and fuel oil to be admitted to these ports free of duty. All of 
these stipulations were made subject to the provisions that the 
ad valorem duties in the Panama tariff should be reduced from 
15 per cent to 10 per cent; that the other duties in the Panama 
tariff except the duties on wines, liquors, alcohol, and opium should 
not be increased; that the consular fees and charges at the ports of 
Panama and Colon should be reduced to 60 per cent of the rates 
then in force ; and that no direct or indirect charges other than the 
duties specified in the Panama tariff v/ere to be imposed on goods 
imported at the ports of Panama and Colon and destined for the 
Canal Zone. 

As for goods entering from Panama, section 4 of the Executive 
order revoked the section of the Executive order of June 24, 1904, 
providing that duties on importations into the Canal Zone were to 
be levied equal to the duties on foreign goods imported into the 
United States, and imports henceforth were made entirely free of 
duty. These stipulations were m.ade subject to the provision that 
the Republic of Panama should grant reciprocal free admission of 
goods imported into the Republic from the Canal Zone. 

Tlie effect of this agreement was to make free ports of the terminals of the canal 
with respect to all purchases for the canal or its employees other than laborers ac- 

8 3 United States Foreign Relations, 1904, p. 597. 

«o This order is printed in United States Foreign Relations, 1904, pp. 640-642, but apparently does not 
contain the full text of the agreement. See footnote on next page. 

« The agreement was made subject to the action of the Fifty-eighth Congress, as contemplated by the 
United States act of Apr. 28, 1904. 



628 COLONIAL TARIFF POLICIES. 

customed to tlie Ti-opics. On the other hand, the inhabitants of the zone, in contra- 
distinction to canal employees, paid duty to the Republic of Panama on all mer- 
chandise imported direct, and no duties were paid on articles passing from th« 
Republic of Panama to the Canal Zone, and \T.ce versa. As a consequence the zone 
revenues were depleted by all customs receipt. ^^ 

TARIFF TREATMENT OF IMPORTS INTO THE UNITED STATES FROM PANAMA. 

On March 3, 1905, or shortly after the signing of the Taft agree- 
ment, Congress passed an act dechiring that all laws affecting imports 
into the United States from foreign countries apply to articles 
imported from the Canal Zone. The full duties of the United States 
tariff had hitherto been enforced against imports from the Canal 
Zone, and this action was now confirmed by statute. 

The United States tariff act of August 5, 1909, required that the 
rates of duty prescribed in that act should be levied upon all articles 
imported from any foreign country into the United States or into its 
possessions, with the exception of the Philippines, Guam., find 
Tutuiia (American Samoa). If the Canal Zone had been a '^ pos- 
session" in the meaning of this act, imports into the Canal Zone 
from foreign countries would have become dutiable at the rates of 
the United States tariff act of 1909. But the Attorney General 
rendered an opinion to the effect that the Canal Zone was not one of 
the possessions of the United States within the meaning of the act, 
but rather ^' a place subject to the use, occupation, and control of the 
United States for the purpose of constructing and maintaining a 
ship canal connecting the waters of the Atlantic and Pacific Oceans," 
and that the tariff act of 1909 consequently did not apply to the 
Canal Zone.^^ The act of March 3, 1905, therefore continued in 
effect, making imports from the Canal Zone into the United States 
subject to the general tariff rates. 

No further changes have been m.ade in the tariff relations of the 
United States and the Canal Zone. Imports into the United States 
from the Canal Zone are now subject, therefore, to the same duties 
as are levied on imports from foreign countries under the tariff act of 
1913 and subsequent tariff legislation, and imports into the Canal 
Zone from the United States are subject to the terms of the Taft 
agreement of 1904. In so far as tariff regulations are concerned, 
since the agreement of 1904, the Canal Zone has not been regarded as 
territorial!}^ separate from Panama. Exports entering the United 
States pay dut}^ as from Panama and imports from the United States, 
except articles destined for Government officials and employees in 
the Canal Zone pay the regular duties of Panama. 

42 Goethals, G. W.: Op, cit., p. 33. Gen. Goethals, who was later governor of the Canal Zone, states (op. 
icit., p. 30) that this agreement exduded froin the benefits of the commissaries established by the Canal 
Commission for the sale of the articles entitled to free admission under Article XIII of the convention of 
1903 aU employees who were natives of tropical countries, pro^"lded that the merchants of Panama could 
supply them with their needs, but that it laier transpired that they could not, and tins provision was 
consequently not enforced. He states also that this agreement w as to continue in force, subject to action 
by Congress, during the construction period of the canal. The Executive order of Dec, 3, ly04, coa- 
firming the agreement, makes no mention of these provisions. 

The arrangement vras practicable because of the purely Governmental nature of the Canal Zone, whi(^ 
distinguishes it from ail the other possessions of the United States— that is, no private commercial acti-idty 
is carried on witliin its borders: -all " things necessary and convenient for the officers, employees, workmen, 
and laborers in the service and employ of the United States, and for tlieir famiUes," who comprise the 
entire stable population, are impoited as Government stores; and in the nature of the case, there are no 
exports. 

« 27 Op. Atty. Gen. 594 (1909). 



UNITED STATES. 629 

COASTWISE SHIPPING LAWS NOT APPLIED TO CANAL ZONE. 

The laws restricting the coastwise trade of the United States to 
vessels of American registry have never been applied to the trade 
between the United States and the Canal Zone. Section 21 of the 
merchant marine (Jones) act of July 5, 1920, provided for the exten- 
sion of the coastwise laws to ^Hhe island Territories and possessions 
of the United States not now covered thereby/^ but as the Canal 
Zone is neither insular nor treated as a '^possession'' of the United 
States, this provision is not applicable to the Zone. 

Bibliography. 

[Seo also the general works listed on p. 835 and the texts of treaties on p. 834.] 
OFFICIAL PUBLICATIONS. 

Senate and House documents. 

Congressional Record. 

Supreme Court Reports. 

Department of State: Foreign Relations of the United States. 

Department of Justice: Opinions of the Attorney General. 

Department of Commerce and Labor, Bureau of Foreign and Domestic Commerce: 

Special Agent's Series No. 67. Commerce and Industries of Alaska, Hawaii, 

Porto Rico, and the Philippine Islands, 1913. 
Department of Commerce, Bureau of Foreign and Domestic Commerce: Special 
Agent's Series No. 129. The Danish West Indies. 1917. 

Commerce Reports, Supplement No. 77a, Trade of the Virgin Islands. 1920, 

Statistical Abstract of the United States. Annually. 
War Department, Bureau of Insular Affairs: Monthly Summary of the Commerce of 
the Philippine Islands. 

Annual Reports. 
Navy Department: Memoranda furnished for use of Senate Committee on Pacific 

Islands and Porto Rico. 1902. 
Treasury Department, Commissioner of Internal Rvenue. Report for 1919. 
Philippine Islands, Governor General: Report for 1919. 

Bureau of Customs: Foreign Commerce of the Philippine Islands, 1913-14. 

Report of the Collector for 1919. 
Porto Rico, Governor: Report for 1919. 

Amended Customs Tariff Regulations. 1899. 
Report and Recommendations of Robert F. Porter to the Secretary of the Treasury 

on the Customs Tariff of the Island of Porto Rico. 1899. 
American Samoa. A General Report of the Governor. 1916. 
Tutuila. General Orders issued by the Naval Governor. 1903. 
Virgin Islands. Report of Joint Congressional Committee. 1920. 
Panama. Isthmian Canal Commission. Report for 1904. 
The Island of Guam. Report by Naval Government of Guam for 1917. 

OTHER PUBLICATIONS. 

American Year Book. New York. Annually. 

Elliott, Charles B.: The Philippines to the End of Commission Government. Indian- 
apolis, [1917]. 

Goethals, G. W.: The Government of the Oanal Zone. Washington. 1915. 

Hitchcock, F. H.: Trade of the Philippine Islands. Washington, 1898. 

Hoxie, R. F. : American Colonial Policy and the Tariff. In The Journal of Political 
Economy, Chicago, March, 1903. 

Willis, Henry P.: Our Philippine Problem, New York, 1905. 

Willoughbv, \V. W. : On the Constitution (The Constitutional Law of the United States.) 
New York, 1910. 

Willoughbv, Wm. F. : Territories and Dependencies of the United States. New 
York, 1905. 

Philippine Ckamber of Congress : Yearbook of the Philippine Islands, 



Part II.- 
Chapter XII. 

GROWTH OF PREFERExNCE IN THE BRITISH 

EMPIRE, TO 1914. 



CONTENTS. 



I. The old colorual STStem: Pa?e. 

The Navigation Acts 630 

Tariff preferences to British goods in the 

colonies 631 

Favors to colonial products in Great 

Britain 631 

Relaxation and repeal of the Navigation 

Laws 632 

The termination of the British preference 

to colonial products 633 

The alx)lition of the colonial preferences to 

British products ' 634 

11. British tariff policy, 1860-1896: 

The dominance of free-trade principles, 

1860-lSSO 634 

Attitude toward the colonies 635 

Agi-eement by treaty not to establish 

preference 635 

The movement toward protection, 188f^ 
1896— 
Great Britain at a disadvantage in 

tariff bargaining 636 

The revival of protectionism in Great 

Britain T. . . 637 

Imperial preference, imperial federa- 
tion, and protection 637 

The colonial conference, 1887 638 

Progress of the movement for imperial 
preference 639 



i II. British tariff policy— Continued. .Page. 

The move ment toward protection — Con 
Agitation for repeal of treaties stand 

ingin the way of preference 640 

Ottawa colonial conference, 1894 641 

British reply to colonial resolutions . . 642 

III. The movement for imperial preference, 
1896-1914: 
Conarress of the chambers of commerce, 

1896 644 

The colonial conference, 1 897 644 

Termination of The treaties with Belgium 

and the ZoUverein 645 

Colonial conference at London, 1902 — 

Preference proposals and resolutions . 646 

The " corn " duties, 1902-3 647 

The Brussels sugar convention, 1902 648 

Preferences in Crown colonies 649 

Controversy with Germany in regard to 

colonial preferences, 1903 649 

Chamberlain's campaign for imperial 

preference, 1903-4 651 

The "tariff reform "movement, 1906. 652 

The colonial conference of 1907 653 

Preference resolutions 654 

The'- tariff reform"movement, 1907-1912. 655 

The imperial conference of 1911 656 

i IV. Summary 657 



I. The Old Colonial System. 

By way of introduction, brief reference will be made to certain 
phases of the colonial policy of Great Britain in the seventeenth and 
eighteenth centuries. 

THE NAVIGATION ACTS. 

In earlier days the Navigation Acts formed an important means of 
controlling the colonial trade in the interest of merchants and manu- 
facturers of the mother country. Although they were of much 
earlier origin, the first important navigation act was passed in 1651. 
It was followed by the act of 1660, which, in substance, continued in 
effect for two hundred years. Originally designed to regulate com- 
merce between England and her i^Juropean neighbors, the Navigation 
Acts were later extended and modified so as to maintain a monopoly 
of the colonial trade. The chief provisions of the acts were as follows: 

(1) Certain specified articles — ^'the enumerated articles," includ- 
ing the chief articles of commerce — could be imported into England 
only in English ships or ships of the country of which they were the 
produce, or from which they were generally exported; but no prod- 
uce of Asia, Africa, America, Russia, or Turkey could be imported 
except in British ships or ships of the producing country. 

630 



BRITISH EMPIRE. 631 

(2) No goods could be carried between any two British ports 
except in British ships. 

(3) No goods could be imported from any foreign country into 
any British colony except in British ships (including Golonial ships), 
or in ships of the country of which they were the produce and from 
which they were exported. 

No important modification was made in these laws until the nine- 
teenth century. They were not strictly enforced against the Ameri- 
can Colonies, however, until the middle of the eighteenth century. 
They are usually credited with transferring to British shipping an 
increasing share of the world's carrying trade and giving to British 
manufacturers the markets of the colonies and to British traders an 
entrepot trade with the colonies in those articles which England 
could not herself produce. 

TARIFF PREFERE^rCES TO BRITISH GOODS IN THE COLONIES. 

In addition to the uniform duties on British and foreign goods 
which the colonial legislatures were authorized to levy, the imperial 
authorities levied duties on foreign products imported into the 
colonies, and thus created tariff preferences in the colonies for Brit- 
ish goods. Occasionally the imperial authorities levied duties on 
imports of British goods into the colonies. Their guiding principle 
was that the duties on British imports in the colonies should be 
mainly for revenue purposes, while the duties on foreign imports 
into the colonies should be for the protection of British trade and 
industry. 

FAVORS TO COLONIAL PRODUCTS IN GREAT BRITAIN. 

In the latter part of the seventeenth century the cultivation of 
tobacco in England was discouraged for fiscal reasons, and the 
Virginia and Maryland tobacco planters received preferential treat- 
ment in the British tobacco market. During the eighteenth century 
various bounties were given to colonial products. The most impor- 
tant of these were the premiums granted upon the imports into Eng- 
land of iron and indigo and materials used in the construction of 
ships, such as timber, tar, and turpentine. During the Napoleonic 
Wars a preference was established on British North American timber 
as a favor to the shipbuilding, shipping, and timber interests of the 
eastern provinces. In 1815 a corn law was passed permitting the 
importation of British North American wheat whenever the price 
reached 67s. per quarter (approximately $1.56 per bushel) in Eng- 
land, whereas no other w^heat could enter until the price in England 
reached 80s. per quarter (approximately $2.50 per bushel). Other 
grains from British North America also received concessions in the 
British market. 

It was not, however, until the period from 1823 to 1846 that the 
preferential system entered its final and most comprehensive stage. 
The series of British Customs Acts which followed each other in 
rapid succession during this period ^ made many additions to the list 

i 1823: Act of 29, Geo. Ill, Ch. 52, and 4, Geo. IV. Chs. 29 and 72. 1824: Act 5, Geo. IV, Cli. 43. 1826: Act 
6, Geo. IV, Ch. 111. 1842: Acts5and6, Vict., Ch. 47. 1843: Acts 6 and 7, Viet., Ch. 29. 1844: Acts 7 and 8, 
Vict., Ch. 18. 1845: Acts 8 and 9, Vict., Ch. 90. Of. Gt. Brit., Pari. Papers, 1905, Cd. 2394. 



632 COLONIAL. TAEIFF POLICIES. 

of colonial products upon which preferential duties were levied, as 
well as increases in the old preferences. The corn hdW of 1815 
established an outright tariff preference to Canadian wheat, while in 
1828 u simikr tariff preference over foreign wheat was granted to 
the imports from other British colonies. In 1843 Canadian wheat 
and flour ao;ain received special preference. 

The British preferences on colonial products were by no means 
confined to timber and wheat. By 1840 the preferential list in the 
British tariff contained over 82 items. In the tariff of 1842 (PeePs 
tariff) the list was further extended. Of 1,825 items separately 
renum.erated in this tariff, preferences to the colonies were granted on 
375. Many of these preferences were on tropical products and there- 
lore of no value to the northern colonies, but there were preferences 
on oats, barley, lumber, fish, and naval materials among other im- 
portant Canadian products. 

RELAXATIO^^ AND REPEAL OF THE NAVIGATIOX LAWS. 

In 1817 the United vStates in retaliation for the prohibition against 
foreign vessels engaging in the trade of British colonies enacted legis- 
lation providing for a tax of $2 a ton upon foreign vessels entering an 
American port from a foreign port in which American vessels were not 
ordhiarily permitted to enter and trade. This act was superseded by 
the navigation acts of 1818 and 1820, which prohibited altogether 
trade in British vessels between the United States and British colo- 
nies from which American vessels were excluded. Other countries 
were threatening to take similar retaliatory action when jn 1823 the 
British Parliament passed the Reciprocity of Duties Actv permitting, 
when reciprocal concessions were granted (1) direct trade iii American 
or colonial ships between any American countries and British colonies 
but with restrictions upon the goods which could be imported into 
the colonies; and (2) dkect export of colonial products from the col- 
onics to European countries and direct import of certain enumerated 
^.rticles from European comi tries into the colonies but only in British 
ships. In 1825 the list of enumerated articles u|>on which navigation 
restrictions were imposed was shortened and the importation of Euro- 
pean produce even though on the enumerated list was permitted in 
ships of the country from which the goods were imported, whether 
or not this was the producing country. In 1828 Great Britain passed 
an act permit ting the vessels of a foreign country to carry to a British 
colony all the products of that country and to carry from a British 
colony all of its products to any country except Great Britain and 
its possessions. The tariff preferences to British imports, however, 
remained in effect. By a series of treaties from 1823 to 1829 other 
relaxations were granted in return for reciprocal concessions. Not- 
withstanding these relaxations of the restrictions on foreign shipping 
and commerce, the intra-imperial trade continued to be a British 
shipping monopoly and remained so until 1849. 

In 1849 after the victory of fiee-trade principles in Parliament, an 
lact was passed abolishing with two exceptions all of the remaining 
restrictions of the Navigation Laws. These exceptions, the reserva- 
tion of the coasting trade of the United Kingdom to British vessels 
and the provision that British ships if engaged in the coasting trade 



BRITISH EMPIRE. 633 

must be entirely manned hy British seamen and if engaged in the 
foreign trade must have three-fourths of the crew British, were re- 
moved in 1853. The argument for the abolition of the Navigation 
Laws was based partly on the ground that with the abolition of pref- 
erences to colonial products in Great Britain then under way (see 
next paragraph) it was unfair to the colonies to confine the intra- 
imperial trade to British ships when foreign ships might be available 
at lower cost, and partly on the expectation that their abolition 
would result in naore favorable treatment of British ships by foreign 
countries. 

THE TERMINATION OF THE BRITISH PREFERENCE TO COLONIAL 

PRODUCTS. 

As the political restraints upon the colonies were being gradually 
removed, considerable opposition developed in England against the 
taxation of the English consumer in order to provide preferences to 
colonial products in the British market. This opposition became 
especially forceful during the free-trade agitation of the forties. 
At that timCj^the Peel ministry, in order to prevent the complete 
abolition of import duties which public opinion was demanding, 
was tying these duties up in as many cases as possible with preferences 
to colonial products.^ 

From 1842 to 1845, in response to the pressure of public opinion, 
the duties on foodstuffs and other articles imported into Great Britain 
were substantially reduced. In 1846 came the climax of the free- 
trade agitation, when Peel introduced the famous budget proposing 
the repeal of the Corn Laws and the substitution therefor of lower 
duties until 1849 and of the uniform registration fee from February 
1, 1849, of Is. per quarter, without discrimination, after the last 
named date, between colonial and foreign grain. The same measure 
proposed that the preferences on a number of other important 
colonial products, including timber, be reduced or repealed. 

The Peel budget of 1846 marked the definitive transfer of the bal- 
ance of political power in England from the agricultural interests to 
the manufacturers and merchants of the towns. The dominance of 
British merchants and manufacturers in the commerce of the world 
made it certain that as soon as they gained the political ascendancy 
in England tariff protection would go ; and with the abolition of the 
Corn Laws the process of removing protective elements from the 
British tariff made a great forward step. 

The abolition of the Corn Laws marked also the beginning of the 
end of preference to colonial products. By 1849 the last trace of 
preference on grains was removed. By 1853 all of the preferences 
except those on timber, foods, wine, and spirits had been abolished. 
In 1860 the last preferences remaining, those on timber and on wines, 
were terminated. (See pp. 738, 739.) 

8 ''The free-traders in England foresaw that a well-established imperial and preferential system would 
prove a lion in their path, and to this thought was due the ill-concealed or openly expressed desire of the 
most ardent among them, especially Bright and Gobden, that the colonies should become independent 
States. It was certainly in order to fortify the old national and imperial system, and to oppose * * * com- 
plete free trade in corn and other things, that Peel and his colleagues extended in 1842 the differential tariff." 
Holland, Bernard: The Fall of Protection, p. 105. 



634 COLOXIAL TAEIFF POLICIES. 

THE ABOLITION OF THE COLOXIAL PREFEREXCES TO BRITISH 

PRODUCTS. 

In 1842 an act was passed by Parliament abolishing all duties 
leviable in the colonies under the imperial authority, except upon 
certain foreign products which the Imperial Government continued 
to tax upon their importation into Canada ''for the regulation of 
commerce/' and permitting the colonies to levy duties as high as 
5 per cent upon all other imports. The act provided, however, that 
if any colony imposed a higher duty upon a British product than 
was charged upon a similar foreign product, the tax on the foreign 
product should be increased by the amount of the difference. Where 
the combined imperial and colonial duties on foreign products ex- 
ceeded 5 per cent, or the rate levied on British products, a colonial 
preference to the latter existed. Although the preference which 
colonial grain enjoyed in the British market was abolished in 1846, it 
was not convenient at that time for the colonies to abohsh the prefer- 
ence to British goods since the reduction of the duty on foreign goods 
to 5 per cent would have deprived the colonies of a considerable part 
of their revenue. Later in the same year this situation was reme- 
died by the passage of an act which permitted the colonies (mth 
the consent of the Crown) to abolish all preference, either by raising 
the duties on British products to the foreign level or by reducing the 
foreign duties to the British level. Most of the colonies at once 
exercised their new privilege. By 1855 aU the colonial preferences 
to British imports had disappeared, preceding by five years the 
abolition of the last British preferences to colonial products. 

II. British Tariff Policy, 1860-1896. 

A. THE DOMIXAXCE OF FREE-TRADE PRIXCIPLES, 1860-1880. 

From 1860 to 1880 the dominance of free-trade principles over the 
commercial policy of Great Britain was unquestioned. The negoti- 
ation in 1860 of the Cobden Treaty with France marked the full ac- 
ceptance by the United Kingdom of the principle of free trade and 
the extension of this principle to the Continent. Many free-traders 
in England objected to the policy of reducing the tariff hj treaty 
bargaining and affirmed that reductions should be made because they 
were, in themselves, beneficial to England regardless of what tariff 
policy other countries pursued. This attitude gained the ascendancy 
in England, and all subsequent tariff reductions in the sixties, in- 
cluding the important reductions of duty on sugar and cigars, were 
made as a matter of purely domestic policy on the part of England, 
no attempt beiug made to use them as a means of securing recip- 
rocal concessions from other countries. Even in the case of the Cob- 
den Treaty, the concessions promised to France were enacted as a 
general tariff measure to be enjoyed alike by all other countries. But 
France, on the other hand, extended to other countries the conces- 
sions she had made to Great Britain only in cases where the other 
countries made with her treaties similar to that into which she had 
entered with England. When the movement toward making treaties 
for tariff reform had once begun, the penalty for failure to participate 
grew with the negotiation of each new treaty. The incorporation 



BRITISH EMPIRE. 635 

into these treaties of the unconditional most-favored-nation clause 
resulted, through the generalization amongst the treaty countries 
of the concessions made in each of the treaties, in a general lowering 
of tariffs. The expectation of the free-traders in England that other 
countries would soon follow England's example in liberalizing her 
tariff received in these years a considerable measure of fulfillment, 
although the continental countries did not fully accept, in their new 
tariffs, the principle of free trade. British dominance in industry, 
commerce, and shipping continued,^ and British manufacturers, mer- 
chants, and shipping interests had no reason to fear foreign competi- 
tion. (From 1860 to 1874 the Liberals were in pov/er in Great Britain; 
and when fin 1874 the Tories were returned to power in a general 
election, their attention was so taken up with Indian frontier troubles, 
the question of the disposal of Constantinople, and the international 
rivalry for territory in Africa, that even if they had chosen to resume 
active support of the policy of protection, they were glTen little 
opportunity to do so. 

ATTITUDE TOWARD THE COLONIES. 

When in the forties and fifties, fiscal autonomy had been granted 
to the more important of the colonies, it was expected in England 
that the colonies would decide to follow the mother country's ex- 
ample, and would reduce and remove their duties on imports. But 
the imperial authorities soon encountered in the colonies a disposi- 
tion to raise duties and in consequence attempted to resume some 
elements of the control which, under mistaken anticipations, they 
had relaxed. By earnest representation, advice, and threat of veto 
they often succeeded in warding off or moderating proposed increases 
in colonial tariffs. They were determined, also, that the British 
policy of uniform duties without preference or discrimination should 
be followed by the colonies, and they interpreted the measure of 
fiscal autonomy which had been granted to the colonies as not cov- 
ering the right to establish differential duties. Attempts by the 
colonies to establish preferences in favor of British goods or of the 
goods of other British colonies were vetoed year after year, and in the 
execution of this policy measures aiming at reciprocity between 
neighboring colonies were disapproved. 

AGREEMENT BY TREATY NOT TO ESTABLISH PREFERENCE. 

The British Government went so far in its policy of eliminating 
all tariff preferences within the Empire as to obligate itself in treaties 
with foreign countries not to establish or to permit the colonies to 
establish certain forms of preference. In the Cobden Treaty of 
1860 with France, Great Britain agreed to give up the preference on 
colonial rum and to admit rum from the French colonies at the same 
rates of duty as rum from the British colonies. In 1862 in a treaty 
with Belgium and in 1865 in a treaty with the German ZoUverein, 
Great Britain bound her colonies to accord as favorable treatment 
to the products of the treaty country as they granted to British 
goods, and thus obhgated them, without consulting them before- 
hand, to maintain the open door. By this time practically all the 
colonies whose population was mainly white had been granted 

185766°— 22 41 



636 COLONIAL TARIFF POLICIES. 

responsible goyernment. The British Government, therefore, dic- 
tated by treaties with foreign countries the fiscal policies of the 
colonies^ although it had granted fiscal autonomy to them by statute. 
For over 30 years these two treaties stood in the way of the estab- 
lishment by the colonies of preference to British products, for not 
only would Belgium and the Zollverein have been entitled, by virtue 
of these treaties, to any concessions made by the colonies to the 
mother country, but a number of other unconditional most-favored- 
nation treaties to which Great Britain had made the colonies parties, 
without consulting them, would have operated to extend any such 
concessions to practically the entire commercial world. These 
treaties not only prevented the colonies from initiating preferences 
in their tariff legislation, but in several important instances led to 
the veto by the imperial authorities, or to the repeal by colonial 
legislature, upon representations made by the imperial authorities, of 
preferential measures already passed. 

THE MOVEMENT TOWARD PROTECTION, 1880-1896. 

GREAT BRITAIN AT A DISADVANTAGE IN TARIFF BARGAINING. . 

The middle of the seventies marked the beginning of a trend in 
European tariff relations decidedly disadvantageous to Great Britain. 
The British ascendancy in commerce and industry continued, but 
not in so great a degree as formerly, and the commercial rivals of 
Great Britain were beginning to compete keenly with the British 
exporters in the markets of Europe. Moreover, a revival of protec- 
tionism was getting under way in the cabinet,' and Great Britain 
found new disabilities put on her foreign trade. France in 1872 
withdrew from the Cobden Treaty, and the new agreements which 
Great Britain succeeded in negotiating in that year and in 1874 
were not so advantageous as the previous arrangement. In 1881 
France published a new general tariff; and in 1882, after negotiations 
for a new commercial treaty had failed, she passed a law granting Great 
Britain most-favored-nation treatment, but on the basis of the dis- 
tinctly higher conventional tariff resulting from the new series of 
French commercial treaties with other countries. Moreover, the 
failure to secure a most-favored-nation treaty with France, in respect 
to tariff rates, left Great Britain without any guarantee of the con- 
tinuance of favorable treatment of her exports to France. The same 
French law, in retaliation for the protectionist tendencies of the 
British self-governing colonies, provided for the taxation of their 
products at the general and not the lower conventional rates of the 
French tariff. 

Austria refused in 1877 to negotiate a tariff treaty with Great 
Britain, and the Austrian Governrnxent frankly declared that although 
it was willing to negotiaite tariff treaties with France, Italy, and 
Germany, it could grant only most-favored-nation treatment to 
Great Britain because, as a result of the adoption of free trade, she 
had nothing to offer in return for concessions. Similar unfavorable 
results were obtained from negotiations with Italy upon the ter- 
mination of an old treaty, while the results of the termination of old 
treaties with Spain and Portugal were even more disadvantageous 
to Great Britain. From 1877 on Spain granted her conventional 



BRITISH EMPIRE. 637 

rates only to countries granting tariff, concessions in return, and it 
was not until 1886 that Great Britain, in return for tlie rearrangement 
of her wine duties so as to make them more favorable to Spain, 
received most-favored-nation treatment. Similar treatment had 
been obtained from Portugal in 1876 by legislation and not by treaty, 
and only upon the reduction of the British wine duties in such a way 
as specially to favor Portuguese wines, and it was not until 1882 that 
reciprocal most-favored-nation treatment was guaranteed by treaty. 
The tariff relations of Great Britain with the other major countries 
involved less difficulty since they continued to use single-column 
tariffs. 

Great Britain was thus unsuccessful in her negotiations with her 
important European commercial and industrial rivals. As a re- 
sult of her free-trade policy she was unable to grant tariff concessions 
in return for tariff concessions, and she found herself playing a pas- 
sive role in the conunercial negotiations of the seventies and eighties. 
She emerged from the great series of treaty negotiations of this 
period in a position much less advantageous than that which she 
had gained for herself during the short period of the dominance of 
free- trade principles in European commercial policies. 

A further disadvantage came in 1890 when the United States passed 
the McKinley tariff, which increased in a marked degree the duties 
on British exports — especially on such staple articles of British manu- 
facture as tinplate, cutlery, and manufactures of w^ool, flax, hemp, 
and jute. Only the continued use of most-favored-nation clauses 
in commercial treaties safeguarded Great Britain from outright 
tariff discrimination, but these commercial treaties were negotiated 
in the interests of other countries, and her gains therefrom, although 
important, were incidental and not the result of deliberate plan or 
intention on the one side or the other. 

THE REVIVAL OF PROTECTIONISM IN GREAT BRITAIN. 

As a result of the changed conditions in which Great Britain found 
herself, signs of a returning protectionist sentiment became manifest — ■ 
a sentiment which w^as still further stimulated by the industrial de- 
pression of the period 1874-1880. At first the demand was for 
^^reciprocity,'' that is, that free admission into Great Britain of 
foreign products should be granted only in return for reciprocal 
concessions by foreign countries. Toward the end of the seventies 
the agitation for countervailing duties against bountied sugar 
brought support to the protectionist movement; while the denuncia- 
tion by France in 1879 of her commercial treaties with Great Britain 
with the avov/ed intention of raising her already protective duties 
on British products gave rise to considerable misgivings as to the 
expediency of Great Britain's isolated free-trade policy. 

IMPERIAL PREFERENCE, IMPERIAL FEDERATION, AND PROTECTION. 

From Canada, from Cape Colony and from other parts of the 
Empire there began to come in the seventies indications that a re- 
turn to the policy of imperial preference would be welcomed. In 
1879 Sir John A. MacDonald, premier of Canada, made an informal 
offer of reciprocal preference to the British Government. But 



638 COLOXIAL TARIFF POLICIES. 

clauses in Great Britain's commercial treaties with Belgium and 
Germany at that time stood in the way of British reciprocity with 
Canada and those countries were unwilling to grant Great Britain's 
request to cancel the offending clauses without surrendering the 
entire treaties. 

In the eighties the idea of imperial preference was bound up with 
that of imperial federation and both of these ideas secured the support 
of the protectionists. A number of influential organizations were 
formed to promote these views. In 1881 The National Fan- Trade 
League was founded with a program advocating protective duties on 
the manufactured products of countries which did not admit British 
m.anufactured products free of duty, moderate duties on foodstuffs 
imported from countries granting fair treatment to British goods, 
and free importation of foodstuff's from the colonies. In return for 
this free admission of colonial foodstuffs the colonies were to admit 
products of British industries, if not free of duty, at least at rates 
substantially lower than the rates imposed on imports from foreign 
countries. This was set forth as a ''great national policy which, 
while stimulating trade at home, and promoting the prosperity of all 
classes, would bind together more closely, by the ties of a common 
interest, the mother country and her scattered populations, strength- 
ening the foundations and consolidating the power and greatness of 
the Empire."^ 

The growing sentiment in Great Britain in favor of bringing the 
various parts of the Empire into a closer and more interdependent 
union led further in 1884 to the foundation of the Imperial Federa- 
tion League in England and to the establishment of offshoot organi- 
zations, in subsequent years, in several of the colonies. The member- 
ship of the league included supporters of all the British political 
parties, and its establishment was greeted with widespread approval. 
In its early years, beyond the efforts to create popular support for 
the idea of political federation, the federation's program consisted of 
little but the endeavor to secure a distribution throughout the entire 
Empire of the burden of imperial defense which was then being borne 
entirely by the mother country. The policy of commercial federa- 
tion was not accepted; what was sought was an imperial ''Kriegs- 
verein" (military league) and not a ''Zollverein" (customs union). 
But in the colonies the policy of political federation obtained more 
support th^^n the policy of the sharing by the colonies in the burden 
of imperial defense. The colonial organizations both in Canada and in 
Australia soon substituted in their programs Zollverein ideas for the 
Kriegsverein supported by the parent organization. 

THE COLOXIAL CONFERENCE, 1SS7. 

As a result of the sentiment developed by the Imperial Federation 
League a colonial conference was summoned to meet in London in 
1887. In issuing the call for the conference the secretary of state 
for the colonies named imperial defense and the promotion of com- 
mercial relations as subjects to be considered along with others to be 
submitted by the colonial representatives and added by way of warn- 

3 From the Program of The National Fair Trade League, ISSl, quoted by Karl J, Fuchs, in The Trade 
Policy of Great Britain and Her Colonies Since 1860, p. 196. 



BRITISH EMPIRE. 639 

ing that he would deprecate the introduction of proposals for '^ what is 
known as political federation." In order to settle any question about 
its constitutional authority he explained that the conference would 
be purely consultative in character. At the conference the repre- 
sentatives of the British Government wxre interested in promoting the 
reorganization of the system of imperial defense in such a way as to 
devolve a part of the financial burden upon the colonies. The colonial 
representatives on the other hand desired closer commercial rela- 
tions and were interested in proposals of imperial preference. 

Among the suggestions put forward by the latter was a proposal 
by Mr. Jan Hofmeyr, a delegate from Cape Coloriy, that commerce 
within the Empire , should be encouraged by imposing a uniform 
duty — the amount suggested was 2 per cent — on all imports entering 
the Empire from foreign countries, and that the revenue thereby 
acquired should be applied to the defense of the Empire. In discuss- 
ing his proposal, Mr. Hofmeyr stated that if the proposed imperial 
tariff should amount to an infraction of the most-favored-nation clause 
in commercial treaties, ^^it may be as well that for the future England 
should take care that when treaties are entered into the most-favored- 
nation clause is not applied against its colonies to the same extent 
and in the same way as if these colonies were foreign powers, instead 
of being integral parts of the Empire itself." ^ 

It was also proposed that permission should be given to other self- 
governing colonies to enter into direct negotiations with foreign 
powers in regard to trade and commerce, as had been allowed in the 
case of Canada. 

PROGRESS OF THE MOVEMENT FOR IMPERIAL PREFERENCE. 

In 1891 a number of events of importance occurred which brought 
the question of imperial commercial policy to the foreground of public 
discussion. In Canada the Conservatives won a general election by 
opposing unrestricted commercial reciprocity with the United States 
on the ground, among others, that the close economic and political 
relationship with the United States which would result would be an 
obstacle to the entrance of Canada into closer political and commer- 
cial union with the rest of the Empire. In the same year (1891) a 
tariff war between Canada and Newfoundland broke out, caused by 
legislation enacted by Newfoundland against Canadian fishermen in 
retaliation for the action of Canada in persuading the imperial au- 
thorities to disapprove the Bond-Blaine Reciprocity Convention of 
1890 between Newfoundland and the United States. Newfoundland 
also created a further problem for the imperial authorities by refusing 
to acknowledge a modus vivendi entered into by Great Britain and 
France to govern the use of the Newfoundland, fisheries, until the 
British Parliament was about to enact legislation to carry out its 
obligations in the face of the opposition of the colony. 

In the same year representatives of the Australian colonies met in 
convention to consider the establishment of a political union, and 
the course to be adopted by the convention with regard to political 
and commercial relations with the mother country was awaited with 
anxiety in England. 



* Gt, Brit., Pari. Papers, Proceedings of the Colonial Conference of 1887, Cd. 5091, p. 466. 



640 COLOXIAL TAEIFF POLICIES. 

It was in 1S91 also that Sk Gordon Sprigg, Premier of CapeCoIonv, 
made a piea before the London branch of the Imperial Federation 
League for a policy of imperial trade preference. . 

In the same year a resokition was introduced in both houses of 
the British ParKament. urging that an imperial conference be sum- 
moned to discuss Cjuestions connected with intra-imperiai trade, the 
formation of an imperial defense fund, and the enactment of retaha- 
tory duties against foreign countries imposing protective duties on 
British products. The project vras rejected, however, by Lord Salis- 
bury, the premier, on the ground that conditions were'^not ripe for 
any immediate movement in the direction indicated in the resolutions. 
In the House of. Commons, ^Ir. Goschen, the chancellor of the ex- 
checjuer. urged that the question of a closer union of the Em.pire ba 
not tied up with the fiscal controversy. 

Following the rejection by the government of the resolution just 
mentioned a controversy within the ranks of the Imperial Federation 
League resulted in a split in the organization, those favoring the 
project of a commercial union founding a new organization called the 
L^nited Empire Trade League to fmnher their program. The Imperial 
Federation League adhered to its original program of advocating 
imperial federation through organization for imperial defense. 

AGITATION FOR REPEAL OF TREATIES STANDING IN THE WAY OF PREFERENCE. 

In the preceding year (1890); Sir Charles Tupper, Canadian high 
commissioner at London, acting on behaK of all the colonial repre- 
sentatives. ha4 already presented to the British Government a request 
for the denunciation of the Belgian and German treaties and for the 
formal concession of the principle that no commercial treaties should 
in the future be binding on the colonies without their assent.' The 
newly organized Cnited Lmpire Trade League now opened an attack 
on the treaties with Germany and Belgium, demanding then denun- 
ciation; but Lord Salisbury replied to their representations that while 
the Government could not tmderstand why the objectionable clauses 
had ever been inserted the treaties were valuable to Great Britain 
and that not until the people of the country showed themselves 
clearly opposed to their continuance could the Government consider 
the question of their termination. The L^nited Empne Trade League 
thereupon transferred their agitation to Canadaf and as a result of 
their campaign, in September. 1891, the Canadian Parliament again 
petitioned for the denunciation of the German and Belgian treaties. 
The colonial secretary refused, however, even to consider the request. 
He took the stand that even if the treaties were terminated, Canada 
would not have the right she was seeking to enter into reciprocitj/ 
agreements with foreign states or with other colonies, and that to 
acquire this right Canada would have to secure authorizing legislation 
from Great Britain. Moreover, the denunciation of the treaties 
could not be considered because that would involve the complete 
derangement of the whole system of British commercial relations. 

On November 25, 1891, tie convention of the Conservative Party 
of the United Kingdom at Birmingham passed a resolution, only Rve 
dissentient votes being cast, favoring the estabhshment of preferen- 

4 Harkin, W. A.: Political Reminiscences of Sir Charles Tupper, p. 179. 



BEITISH EMPIRE. 641 

tial trade within the Empire and urging the denunciation of any com- 
mercial treaties which hindered the consummation of such a policy. 
On April 28, 1892, only a few days after the unfavorable reply of the 
British Government to the request of the Canadian Parliament for 
the denunciation of the Belgian and German treaties, the Canadian 
Parliament passed a resolution offering a substantial reduction of 
duties on British manufactures in return for a preference in the Brit- 
ish market to Canadian products. This resolution was brought to the 
attention of the British Government in the House of Lords by the 
Earl of Dunraven, who urged the adoption of the Canadian plan, 
including a moderate duty on foreign grain. Lord Balfour, replying 
on behalf of the Government, refused to consider the proposal. 

Later in the same 3^ear (1892), at a congress of chambers of com- 
merce of the British Empire held in London, the question of imperial 
preference was hotly debated. A resolution for an imperial com- 
mercial union with differential duties against foreign countries, but 
without intra-imperial free trade, was lost by 33 to 55, voting by 
chambers, the opposition coming mainly from chambers of commerce 
in England and the Crown colonies, and the support mainly from 
Canadian chambers. A resolution for general free trade, and another 
resolution for a commercial union ^'on the basis of freer trade within 
the Empire^' were both carried.^ This last resolution as originally 
submitted had called for commercial union '^on the basis of free trade 
within the Empire," but in the final draft '^freer" had been substi- 
tuted for free. 

In the same year a general election in Great Britain resulted in a 
victory for the Liberals under Gladstone, and the change in Govern- 
ment removed all prospects of an early attainment of the projects for 
commercial union. 

OTTAWA COLONIAL CONFERENCE, 1894. 

In 1894 the Canadian Government, despairing of any action being 
taken by the British Government toward the establishment of prefer- 
ential trade within the Em^pire, summoned a conference of the colo- 
nies to Ottawa to deal with the question of the commercial relations 
of the Empire. All of the self-governing colonies except Nev/found- 
land and Natal were represented. A representative of the British 
Government, Lord Jersey, was present, but took only a passive part 
in the proceedings. 

The general feeling among the colonial representatives that Great 
Britain was not prepared to adopt a fiscal policy which would make 
possible the grant of tariff preferences to the colonies led to the chief 
emphasis being placed on the desirability of establishing preferential 
trade arrangements among the colonies themselves. Resolutions 
were unanimously adopted calling for imperial legislation to enable 
the colonies to enter into agreements of commercial reciprocity, in- 
cluding the power of making differential tariffs with one another and 
with Great Britain, and expressing the opinion that any provisions 
in existing treaties hindering such action should be removed. The 
conference also recorded its belief in the advisability of a preferen- 
tial customs arrangement between Great Britain and her colonies and 

8 Fuchs, Karl J=: Op. cit., p. 372. 



642 . COLOXIAL TARIFF POLICIES. 

urged the desirability of the colonies or some of them establishing a 
system of customs preference without waiting for the mother country 
to become a partner in the arrangement. 

It had been pointed out in the conference that only one-fourth of 
the trade of Great Britain was with the colonies and^ less than one- 
sixth with the self-governing colonies. In accord with these facts 
those who opposed calling upon Great Britain to change her com- 
mercial policy urged that the colonies would not have sufl&cient to 
offer the mother country in return for the favors requested of her, 
that England's free-trade policy provided for colonial products an 
open market greater than if England were to adopt protection, and 
that it was not proper for the colonies to suggest to' Great Britain 
what her fiscal policy should be. The proponents of reciprocal prefer- 
ences argued on the other hand that free admission of colonial prod- 
ucts into Great Britain was not a favor to the colonies, since free 
admission was equally enjoyed by products of foreign countries, 
whereas protection if accompanied by preferential arrangement with 
the colonies was in the interest of Great Britain. It was further 
proposed that the colonies should wait no longer for the assent of 
Great Britain to a scheme of preferential trade in which she herself 
was to take a part but should immediately proceed to further prefer- 
ential arrangements among themselves, and that, if the time should 
come when England should place duties on goods, a preferential 
arrangement might well be made with her taking the form of an 
advantage of 5 per cent in the British duties on foodstuffs from the 
colonies in return for a similar concession to British manufactures 
in the colonies. 

Lord Jersey, representing Great Britain at the conference, in his 
report of the proceedings to the British Government advised;that 
favorable consideration be given to the unanimous request of the 
colonies for the removal of all restrictions whether treaty or statutory 
which stood in the way of intercolonial preferential arrangements, and 
he pointed out that the treaties with Belgium and the German Zoll- 
verein would not preclude either the making of preferential arrange- 
ments between the colonies themselves or the grant by Great Britain 
of specially advantageous terms to the colonies, but that they would 
have the effect of preventing Great Britain herself from sharing in 
any benefit which might be given by one colony to another. The 
resolutions did not contemplate a real customs union. Lord Jersey 
explained, as the colonies Vv^ere not prepared to admit British goods 
free in return for free admission of their o^\ti goods. 

BRITISH REPLY TO COLONIAL RESOLUTIONS. 

The colonial secretary, the Marquess of Ripon, replied to the pro- 
posal of the colonies, on behalf of the British Government, in a lengthy 
dispatch, which frankly and vigorously criticised the resolutions 
adopted by the conference."^ The proposal for reciprocal preference 
between Great Britain and the colonies, he argued, would require for 
its realization a complete reversal of the fiscal and commercial system 
of Great Britain. Differential duties, he stated, were open to all the 
objections from the consumer's point of view which could be urged 

' Gt. Brit., Pari. Papers, 1895, C. 7824. 



BRITISH EMPIRE. 643 

against a general duty, and had to meet the additional objection that 
they dislocated trade by their tendency to divert it from its regular 
and natural channels. He pointed out that the total trade of the 
Empire with foreign countries far exceeded the trade between the 
various members constituting the Empire; that the volume of the 
trade upon which new taxation was to be placed therefore exceeded 
the volume which would be partially relieved from taxation; that 
there would result both increased taxation and a net loss of trade, 
the burden of which in both cases would fall with greatest severity 
on those parts of the Empire which had the largest proportion of 
foreign trade; that the gains to the colonies, if there were any gains 
in the long run, which he doubted, would be altogether incommen- 
surate with the loss to the mother country; that retaliation by foreign 
countries might result; and that the proposal would require the 
taxation of food and raw material imported into the United Kingdom, 
with a resultant handicap to British export trade in its competition 
with other countries. 

The proposal that the colonies be permitted to enter into recip- 
rocal tariff relations with each other, he opposed on the ground that 
it would be difficult for one colony to give a preference in its markets 
to the trade of another solely at the expense of the foreigner and 
without inflicting serious injury on the commerce of Great Britain or 
of other colonies. The request of the colonies that they be freed from 
the restrictions imposed upon them by the Belgian and Zollverein 
treaties, he refused on the grounds that both countries had been ap- 
proached unsuccessfully with a view to their assenting to the denun- 
ciation of the particular clauses relating to the colonies without im- 
pairing the effectiveness of the remaining provisions of the treaties, 
and that the advantages to be derived from permitting the United 
Kingdom to enjoy preferential treatment in the colonies were not suf- 
ficient to outweigh the disadvantages to Great Britain involved in the 
denunciation of the entire treaties, and the resultant danger that 
Belgium and the Zollverein might withhold most-favored=nation 
treatment from British products. He pointed out that the annual 
exports from the United Kingdom to Belgium and Germany were 
over £41,000,000, whereas the annual exports to the self-governing 
colonies amounted to only £35,000,000; that no scheme had been pro- 
posed which foreshadowed any precise advantages to be secured to 
the British export trade to the colonies in the event of the termination 
of the treaties; and that the colonies themselves, if the treaties were 
terminated, would probably lose the privilege of most-favored-nation 
treatment from the treaty countries. The only concession to the 
colonies which he consented to make on behalf of the British Govern- 
ment was the repeal of the clause in the Constitution Acts of the 
Australian colonies prohibiting the imposition of differential duties, 
but even this concession was qualified by the requirements that any 
bill passed by a colonial legislature providing for the imposition of 
such duties should be reserved for the consideration of the imperial 
authorities. 



644 COLONIAL TARIFF POLICIES. 

III. The Movement for Imperial Preference, 1896-1914. 

CONGRESS of THE CHAMBERS OF COMMERCE, 1896. 

In 1895 the Liberal ministry in England went out of office and 
was succeeded by a Conservative ministry with Lord Salisbury as 
prime minister. There had been for many jesiTs past a growing un- 
easiness on the part of British manufacturers and publicists arising 
from the failure of British trade to maintain its old positron in colo- 
nial and other markets, and the revival of protectionism which 
recurred with perfect regularity in years of commercial depression 
gained much of its strength from the fear that England was losing her 
commercial supremacy. One of the first official acts of the new 
colonial secretary, Joseph Chamberlain, was to send a circular letter 
to the governors of the colonies calling attention to the successful 
competition of foreign goods in the colonies and requesting special 
information on the subject. 

The third congress of the chambers of commerce of the Empire 
met in London in June, 1896. The Toronto Board of Trade had 
sent to this congress as its representative Mr. E. B. Osier with a 
resolution for preferential trade. This resolution proposed free trade 
within the Empire, but with the reservation to each part of the 
Empire of the right to fix the duties on foreign goods as its own 
interests might dictate. Mr. Chamberlain, who had opened the pro- 
ceedings of the congress with an appeal for commercial union, 
expressed himself as in favor of the Osier plan with the result that 
it was presented in the form of a resolution for the approval of the 
congress. 

The Canadian representatives, however, were not all willing to 
support the Osier resolution. To many of them the free admission 
of British products to Canada seemed a greater concession than was 
advisable in view of the need of Canadian industry for protection 
against British as well as against foreign competition. In order to ob- 
tain unity amongst the Canadian delegation, Donald Smith (later Lord 
Strathcona) moved an amendment calling sim-ply for "& customs 
arrangement between Great Britain and her colonies and India, on 
the basis of preferential treatment." He explained that this amend- 
ment had received the approval of the supporters of the Osier reso- 
lution, and expressed the wish that it be adopted and that it might 
lead to the summoning of another imperial conference in London 
to arrange the details. This amended resolution was passed by the 
congress, although by only a small majority. 

THE COLONIAL CONFERENCE.^ 

In the spring of 1897, on the occasion of the Queen's diamond 
jubilee, there was held in London a colonial conference at which the 
colonies were represented by their premiers. Mr. Chamberlain, who 
presided, stated in his opening address that ^Hhe question of the 
future relations, political and commercial, between the self-governing 
colonies and the United Kingdom" was the most important and at 
the same time the most difficult of the subjects before the conference 
for consideration. Arguing for closer commercial relations, he 

8 Gt. Brit., Pari. Papers, 1897, C. 8598. 



BKITISH EMPIRE. 645 

stressed the importance of bringing to the ^'reenforcement of senti- 
ment the motives which are derived from material and personal 
interest." He admitted that the differences between the fiscal 
systems of the various portions of the Eimpire would make it extremely 
difficult to accomplish a commercial union of the Empire akin to the 
unity achieved by the German Empire by means of the Zollverein, 
Referring to the grant by Canada earlier in this year of a tariff pref- 
erence and to the claims of Belgium and Germany, under their 
treaties with Great Britain, to share in its benefits, Mr. Chamberlain 
made the following statement: 

Her Majesty's Government desire to know from the colonies whether, so far as 
they are concerned, if it be found that the arrangements proposed by Canada are 
inconsistent with the conditions of those treaties, they desire that those treaties shall 
be denounced. If that be the unanimous wish of the colonies, after considering the 
effect of that denunciation upon them as well as upon us, because they also are con- 
cerned in the arrangements which are made by these treaties, then all I can say at 
the present time is that Her Majesty's Government will most earnestly consider such 
a recommendation from the colonies, and will give to it the favorable regard which 
such a memorial deserves. 

The conference was held in secret and very little of the proceed- 
ings was published. Respecting commercial relations, only two reso- 
lutions were passed, both unanimously. One resolution urged ^'the 
denunciation, at the earliest convenient time, of any treaties which 
now hamper the commercial relations between Great Britain and her 
colonies." The other resolution recommended ^Hhat in the hope 
of improving the trade relations between the mother country and 
the colonies, the premiers present undertake to confer with their 
colleagues with the view to seeing whether such a result can be 
properly secured by a preference given by the colonies to the prod- 
ucts of the United Kingdom." ^ No resolution was reported for 
reciprocal preference by the mother country to the colonies. 

TERMINATION OF THE TREATIES WITH BELGIUM AND THE ZOLLVEREIN. ^^ 

The Imperial Government proceeded without delay to terminate 
the treaties with Belgium and the Zollverein. On July 30, 1897, 
Lord Salisbury, v/ho was foreign secretary as well as prime minister, 
gave the necessary 12 months' notice for termination. He stated, as 
reason for the termination, that the provisions in the treaties which 
applied to the British colonies ^^ constitute a barrier against the 
internal fiscal arrangements of the British Empire, which is incon- 
sistent with the close ties of commercial intercourse which subsist 
and should be consolidated between the mother country and the 
colonies.'' Belgium agreed to enter into a new treaty which left 
the British colonies freedom of action. Germany refused to sign 
a new treaty with Great Britain from which the British colonies 
would be excepted, but on May 11, 1898, she put into effect a special 
law which accorded to Great Britain and to the British colonies, 
with the exception of Canada, the continued enjoyment of most- 
favored-nation privileges in Germany. Canadian products, how- 
ever, were subjected on importation into Germany after July 30, 
1898, to the rates of the general tariff. 

» Gt. Brit., Pari. Papers, 1897, C. 8596. See also Jebb, R.: The Imperial Conference, Vol. II, Appendix K. 
10 See Gt. Brit., Pari. Papers, 1903, Cd. 1830. 



646 COLONIAL TARIFF POLICIES. 

The termination of the Belgian and German treaties removed all 
restrictions on the establishment of preferential arrangements 
within the British Empire. The other most-fayored-nation treaties 
to which Canada was a party were not an obstacle, since they guaran- 
teed to the signatory countries only as favorable treatm.ent in Canada 
as was granted to any foreign country. 

COLONIAL CONFERENCE AT LONDON, 1902. 

During the interval between 1897 and 1902, when the next confer- 
ence was held, the Boer War engrossed the attention of the whole 
Empire. The war feeling and the assistance given by the colonies 
had stimulated imperialist sentiment almost to fever heat, and 
much was anticipated from the conference which Mr. Chamberlain, 
taking advantage of the presence in London of the colonial premiers 
in connection w^ith the coronation of Edward VII, summoned in 1902. 
But the results of the conference were disappointing to those who 
favored closer union, political or commercial^ of the Empire. 

Mr. Chamberlain, in opening the conference, declared that its 
paramount object was to strengthen the bonds which united the 
Empire, and that there were only three important avenues through 
which this object could be approached, (1) through the political 
relations to each other of the various portions of the Empire; (2) 
by some kind of commercial union; and (3) through consideration of 
the questions arising out of the problem of imperial defense. With 
reference to the commercial relations of the Em_pire, he stated that 
the Imperial Government had no proposals to submit. He pointed 
out, however, that the Empire both derived the greater part of its 
necessaries from foreign countries and exported the largest part of 
its surplus produce to foreign countries. He believed that the 
Empire coulS, if it chose, be self-supporting, and that everything 
which would tend to promote such self-sufficiency was desirable. 
He declared that the first object of the conference should be the 
promotion of free trade within the Empire, with a possible reserva- 
tion permitting revenue duties on imports in the colonies where 
fiscal conditions appeared to require it. He maintained that the 
Canadian preference — established in 1897 and increased in 1898 and 
1900 — -had proved of little substantial value to British trade,* and he 
showed little enthusiasm for the preference proposals of the colonies. 
If colonial tarifis left sufficient protection to colonial industry to 
exclude, or almost to exclude, British imports, what advantage, he 
asked, would there be to British trade in the taxation at even higher 
rates of similar imports from foreign countries, especially w^hen the 
most important imports from foreign countries entered under more 
favorable conditions? Great Britain, he said, was grateful for any 
preference granted by the colonies, but could make no return untu 
the colonies went much further and enabled British imports to enter 
under more favorable conditions than those then existing. 

PREFERENCE PROPOSALS AND RESOLUTIONS. 

The discussion which took place in regard to commercial relations 
resulted in the submitting by the colonial representatives of proposals 
which they were prepared to recommend to their Governments for 



BEITISH EMPIRE. 647 

the esta'blishnieiit or the extension of preference in their respective 
colonies. It was proposed that: 

(1) Canada should continue the existing preference of 33 1 per 
cent and grant additional preferences on selected articles 

(a) by further reducing the duties in favor of the United 
Kingdom, 

(b) by raising the duties against foreign imports, and 

(c) by imposing duties on certain foreign imports then on the 
free list. 

(2) Australia was to establish a preference but without as yet any 
definition of its nature or extent. 

(3) New Zealand was to grant a general preference by a 10 per 
cent reduction of the existing duties on British manufactured goods 
or an equivalent in respect of selected articles on the lines proposed 
by Canada for the increase of her existing preference. '^• 

(4) Cape Colony and Natal were to give a preference of 25 per cent 
of the existing duties or its equivalent on goods subject to an ad 
valorem duty by increasing the duties on foreign imports. 

A general resolution was finally adopted to cover the principle 
underlying the various proposals made by the colonial representa- 
tives. This was as follows :^^ 

1. That this conference recognizes that the principle of preferential trade between 
the United Kingdom and His Majesty's Dominions beyond the seas would stimulate 
and facilitate mutual commercial intercourse, and would, by promoting the develop- 
ment of the resources and industries of the several parts, strengthen the Empire. 

2. That this conference recognizes that, in the present circumstances of the colonies^ 
it is not practicable to adopt a general system of free trade as between the mother 
country and the British Dominions beyond the seas. 

3. That with a view, however, to promoting the increase of trade within the Empire, 
it is desirable that those colonies which have not already adopted such a policy should, 
as far as their circumstances permit, give substantial preferential treatment to the 
products and manufactures of the United Kingdom. 

4. That the prime ministers of the colonies respectfully urge on His Majesty's Gov- 
ernrnxont the expediency of granting in the United Kingdom preferential treatment to 
the products and manufactures of the colonies, either by exemption from or reduction 
of duties now or hereafter imposed. 

5. That the prime ministers present at the conference undertake to submit to their 
respective Governments at the earliest opportunity the principle of the resolution, 
and to request them to take such m-oasures as may be necessary to give effect to it. 

The following resolution, urging preference to products of the 
Empire in Government contracts, was also adopted :^^ 

That in all Government contracts, whether in the case of the colonial or the Impe- 
rial Governments, it is desirable that, as far as practicable, the products of the Empire 
should be preferred to the products of foreign countries. 

With a view to promoting this result it is suggested that where such contracts can 
not be filled in the country in which the supplies are required, the fullest practicable 
notice of the requirements and of the conditions of tender should be given both in 
the colonies and the United Kingdom and that this notice should be communicated 
through official channels as well as through the press. 

THE "cOKN" duties, 1902-3.^^ 

The war budget of 1902 revived, for revenue purposes, the old 
registration duty of 1 shilling per quarter on imports of wheat. 
At the colonial conference of 1902 the representatives of the colonies 

11 Gt. Brit., Pari. Papers, 1902, Cd. 1299, p. 36. 

12. Ibid, p. X. 

la "Corn" in Great Britain means grain and flour. 



648 COLONIAL TAEIFF POLICIES. 

pointed out that a British preference on colonial grain vv ould now 
mean taking off taxation in favor of the colonies instead of putting 
on taxation, and urged that colonial grain be exempted from the 
duty. Increased pressure came from the colonies, especially from 
Canada, for the exemption of colonial grain and flour from the duty 
after the sessions of the colonial conference had ended. Toward the 
end of 1902, Mr. Chamberlain was converted to the proposal, and 
urged upon his colleagues in the cabinet that they grant the request 
of the colonies. Sir Michael Hicks-Beach, the chancellor of the ex- 
chequer, upon whose initiatiye the duty had been imposed, had planned 
it as a source of revenue, and was unwilling to reduce or remove it 
or to impair its productiveness in any way. He resigned from the 
exchequer in this yeo.r, and in 1903, while Chamberlain was in South 
Africa on a Governm-ent mission, the new chancellor of the exchequer, 
Mr. C. T. Ritchie, announced in his budget speech that the duty v/as 
to be wholly repealed on foreign as on colonial wheat. This action 
appears to have been intended to forestall the establishment of a 
preference to the colonies and was taken without the knowledge of 
Mr. Chamberlain. 

THE BRUSSELS SUGAR CONVENTION, 1902. 

Prior to September 1, 1903, prohibitory import duties, high 
excise taxes, and export bounties on sugar had long prevailed through- 
out continental Europe. This operated as a serious handicap to the 
producers of cane sugar, and in the British sugar-growing colonies 
there resulted acute economic depression. In 1902 Great Britain 
inform-cd the European sugar-growing countries that unless bounties 
were abolished, she would penalize all imports of bounty sugar. 
This resulted in the Brussels convention, signed on March 5, 1902, 
effective from September 1, 1903, to which Great Britain and all the 
important European sugar-growing countries, except Russia, were sig- 
natories. In order to equalize the competition of sugar on the interna- 
tional market by eliminating all legislative aid to exported sugar, the 
convention prohibited all bounties on production or exportation and all 
special exemptions from duty, and limited the excess^ of import duty 
over excise tax to a maximujjOL of 53 cents per 100 pounds in the case 
of refined sugar and 48 cents in the case of raw. Countervailing 
duties were to be imposed on sugar imported into any of the signatory 
countries from countries granting direct or indirect bounties. 

Great Britain was not a producer of sugar, and the cheapening in 
the price of sugar in Great Britain which resulted from the export 
and production bounties appears to have stimulated the develop- 
ment and to have augmented^the prosperity of the British confection- 
ery, biscuit, and jam industries. The main, if not the only, reason 
for the insistence upon the abolition of the bounties wa,s the desire 
to protect the colonial sugar-cane industries from the unfair compe- 
tition with European beet sugar. 

In a protocol to the convention, Great Britain promised that no 
bounty, dhect or indirect, would be granted to the sugar of the 
Crown colonies during the continuance of the convention. Great 
Britain also agreed that "as an exceptional measure, and reserving 
in principle entire liberty of action as regards the fiscal relations 
betv/een the United Kingdom and its colonies and possessions," 



BRITISH EMPIRE. . 649 

during the continuance of the convention the United Kingdom would 
grant no preference to colonial sugars as against sugars from any 
of the contracting States. ^^ This provision was the occasion of some 
criticism in Parliament, but the Government felt it to be a necessary 
concession in order to secure the discontinuance of the practice of 
granting bounties on sugar. ^^ 

PREFERENCES IN CROWN COLONIES. 

While Mr. Chamberlain was colonial secretary (1895-1903) the 
policy of prohibiting the establishment of differential tariffs in Crown 
colonies was departed from in several instances. Cecil Rhodes had 
endeavored already in 1894 and 1895 to secure permission to incorpo- 
rate in the charter for Rhodesia a clause limiting the maximum 
duties to be imposed on British goods. In 1898 and 1899 such clauses 
were inserted in the orders in council providing for the administra- 
tion of Rhodesia and resulted, later, in bringing into effect an extraor- 
dinary preference. ^^ In May, 1903, the customs conference of the 
South African colonies — most of which were at this time under the 
direct administration of the Crown — was not only permitted, but 
persuaded to establish a preference, in its new tariff, on British 
imports. ^^ In the same month, the British Residents in the four 
Federated Malay States proclaimed an export surtax, prohibitory in 
amount, on tin ore, unless shipped to be smelted in the Straits Settle- 
ments. In 1904 the export surtax was removed from tin ore shipped 
to the United Kingdom to be smelted. (See p. 337.) 

CONTROVERSY WITH GERMANY IN REGARD TO COLONIAL PREFERENCES, 

1903. 

In 1898, following upon Great Britain's denunciation of her treaty 
of 1865 with the German Zollverein and Canada's adoption in the same 
year of a policy of preference to British imports, Germany withheld 
most-favored-nation treatment from Canada but continued to grant 
it to Great Britain and the remainder of the Empire by provisional 
legislation. 

Canada protested to the colonial office against the action of the 
Bundesrat, pointing out that Germany received in Canada as favor- 
able treatment as was enjoyed by any other foreign country. The 
protest v/as forwarded to the German Government. It maintained 
in reply that the action of Germany was justified, inasmuch as by the 
new Canadian tariff Germany was deprived of the privilege of equal 
treatment with Great Britain which she had enjoyed uninterrupted 
for thirty years. In 1901 Canada herself took up the matter v/ith 
the German consul general at Montreal, but nothing resulted there- 
from. 

The pledges given by the colonial representatives at the colonial 
conference of 1902 to recommend to their Governments new measures 
of preference to British trade and the reports in the press in 1903 that 
preferential treatment for British imports were under consideration 

"Board of Trade Journal, Mar. 20. 1902, p. 541. 

15 Economist, London, Aug. 10, 1912, p. 267. For the withdrawal of Great Britain from the Brussels 
sugar convention, see p. 815, and of France, p. 168. 

IS See Ch. XV, p. 756. 
" See Ch. XV, p. 743. 



650 COLONIAL TARIFF POLICIES. 

in South Africa and New Zealand led to a general belief in Germany 
that the movement for a commercial union of the British Empire 
was about to become successful and that as a result German trade 
would find itself forced out of the British and British colonial markets. 
On April 15, 1903, the British ambassador to Germany was informed 
that as the South African colonies had decided to grant preference to 
British imports, the desirability of excluding them as well as Canada 
from most-favored-nation treatment was under consideration, and 
it was further intimated that if the Australian colonies should also 
establish preference, Germany would mthhold most-favored-nation 
treatment from Great Britain herself. 

Meanwhile in Canada the minister of finance, Mr. Fielding, on 
April 16, 1903, announced to the House of Commons the failure of 
negotiations mth the German consul general in Canada to secure 
most-favored-nation treatment for Canadian products in Germany 
and the intention of the Government to introduce retaliatory legisla- 
tion in the form of a surtax on imports from Germany. Germany 
replied on April 23, 1903, with another threat of retaliation against 
Great Britain. 

The British Government met German threats with counter- threats. 
Mr. Chamberlain, in a speech at Birmingham on May 15, 1903, asked 
for tariff retaliation. He characterized the German refusal to 
recognize the domestic character of the Canadian preference, her 
penalization of Canada and her threats of retaliation against other 
colonies and England, herself, if the policy of preference should re- 
ceive further extension, as ''a policy of dictation and interference. '' 
Germany would not have followed such a policy, he declared, were 
it not for the opinion prevalent in Germany that Great Britain was 
^^so wedded to our fiscal system that we can not interfere, that we 
can not defend our colonies, and that in fact any of them which 
attempts to establish any kind of special relations with us does so at 
her own risk and must be left to bear the brunt of foreign hostility. " ^^ 

In the House of Commons and in the House of Lords, and in a long 
exchange of correspondence between the foreign offices of the two 
countries, the British Government announced its purpose of meeting 
with severe retaliation any attempt by Germany to penalize preferen- 
tial tariffs in any portion of the Empire. On June 17, 1903, Cham^ 
berlain was able to point out that since the question of British re^ 
taliation had been raised,, nothing more v>^as heard as to Germany'^ 
threatened Avithdrawal of most-favored-nation treatment from. 
British products, A dispatch of the Marquis of Lansdowne, the 
British foreign secretary, to the German Government concluded as 
if oliows : 

Should the German Government, however, persist in the attitude which they had 
taken up on this matter, and, further, extend to the products of other British colonies, 
and even to those of the United Kingdom, whose tariff is at the present moment based 
upon the most liberal principles, the discrimination which they have enforced against 
Canada, a ver^- \dde and serious issue must inevitably be raised invohdng the fiscal 
relations of this countiy and the Germain Empire. 

One of the points made by Germany in defense of her policy was 
that ''if the English colonies are to be in a position to follow out 
their own customs policy, other countries must be allowed to treat 
them as separate customs territories." 

" Canadian Annual Review, 1903, pp. 256, fi. 



m BRITISH EMPIEE. 651 

In December, 1903, a tariff debate took place in the German 
Reichstag. The discussion indicated a very general desire to avoid 
any display of irritation at Canada's surtax upon German goods on 
the ground that it would only strengthen the hands of Mr. Chamber- 
lain and the British tariff reformers.^- On December 12, 1903, the 
Reichstag adopted a fiscal measure which granted to the British 
Empire most-favored-nation treatment for a further term of two 
years, and did not provide for any retaliation against South Africa, 
which had just adopted a preference to British products. The law 
continuing the grant of most-favored-nation treatment to the British 
Empire provided, however, that the same conditions should rule 
regarding its application that prevailed before June 11, 1901, which 
meant that Canada was still excluded from the benefit of the German 
conventional tariff. 

Canada v/as left to carry on her fight with Germany by herself. 
On October 24, 1903, the Canadian surtax law came into effect and 
was enforced upon German goods imported into Canada. The 
tariff war between Canada and Germany lasted for seven years, and 
was terminated in 1910 upon Germany's initiative, Canada removing 
the surtax and Germany granting the conventional rates of her 
tariff to most of the important items of Canadian export to Germany. 

This episode is of significance as the only case brought to public 
notice, since the retaliation in 1817-1820 by the United States against 
the old colonial preferences, of an attempt by another country to 
retaliate against the policy of preferential tariffs within the British 
Empire. It failed, largely because the great degree of dependence of 
German trade and industry on the markets and raw materials of the 
British Empire placed in British hands a powerful weapon of counter- 
retaliation. 

chamberlain's campaign for imperial preference, 1903-4. 

In 1903 Mr. Chamberlain became fully converted to the idea that 
the best interests of tKe trade of the Empire demanded imperial 
preference. In a speech in Parliament on May 15 he came out 
definitely for preference. Since in the interests of British industry 
raw materials must not be taxed, and since the colonies were not 
exporters of manufactures , he urged that moderate duties be placed 
on foodstuffs, with exemption for colonial produce. A tax of 2s. per 
quarter on wheat would be sufficient, he thought, and would not be 
protective in character. ¥7hile this plan v/ould place the burden of 
preferences on the laboring classes of Great Britain, they could be 
compensated by social legislation, he said, and relieved by the re- 
mission of some of the existing indirect taxes. In September Mr. 
Chamberlain resigned from the cabinet in order to be free to devote 
himself to the creation of sentiment for a policy of preference and 
protection. In a speaking campaign launched in Glasgow, October 
6, 1903, he came out frankly and earnestly for a scheme of customs 
duties in Great Britain as a measure of protection to British industries, 
for bargaining and retaliatory purposes, and as the basis of tariff 
preferences to imports from the colonies. Foreign grain was to be 
taxed one or two shillings per quarter; colonial grain was to be 

" Canadian Annual Review^ 1904, p. 376. 

185766°— 22 42 



652 COLOXIAL TARIFF POLICIES. , 

admitted free; flour was to be taxed proportionately higher in order 
to revive the British milhng industry; foreign meats and dairy 
products were to be taxed at 5 per cent ad valorem, with a remission 
of duty on colonial products ; wines and fruits produced in the colonies 
should also receive a preference; competitive foreign manufactures 
were to be taxed 10 per cent. In return the colonies should agree 
not to enter upon the production of articles whose manufacture was 
not yet developed in the colonies but was important in the mother 
country; tariff walls should not be raised against British products 
in the colonies, and should be lowered where such action would not 
conflict with colonial policies. 

To support his program. Chamberlain pictured British industry 
as decadent, and as threatened by foreign competition in its home 
market; and he predicted disaster for even the great British shipping 
industries if a more exclusive trade policy were not adopted. His 
campaign divided the Unionist Party and was vigorously opposed 
by the Liberals. Moreover, in the colonies his suggestion of "for- 
bidden industries," resembling one of the most unpopular features 
of the old colonial system, and his repeated statements that the 
mother country must adopt preference because the colonies dem.anded 
it and otherwise the unity of the Empire would be endangered, were 
denounced by many who were otherwise his most ardent supporters, 
and in Great Britain the Unionist Party refused to make a formal 
acknowledgment of support of the Chamberlain plan. 

Mr. Chamberlain in frankly adopting the principles of protection 
had been moved, undoubtedly, by the need of finding a broader basis 
of support for his scheme of preference if it were to be realized in 
legislation. There were many people in Great Britain who would 
give support to protection who could not be greatly interested in 
preference alone. Further to enlist the support of such people, 
Mr. Chamberlain, toward the end of 1903, organized a tariff reform 
league, whose purpose was to promote the adoption hy Great Brit- 
ain of a protective tariff. Shortly afterwards^he founded a subsidiary 
organization, the tariff commission, to carry on research in tariff jand 
industrial problems and to issue reports on its findings. An extensive 
propaganda was carried on by these organizations in the endeavor to 
convert the British public to protection. In the reports of the tariff 
commission on various industries the evidence given radicated very 
clearly that the m.ain sources of support came from manufacturers 
who were more concerned with protection at home and a preferential 
reduction of tariff barriers in the colonies than with preference to the 
colonies in Great Britain. In some cases m^anuf acturers, pleading for 
protection in their ov,ti industries, recomxinended that preference to 
the colonies should take the form of reductions and not of complete 
remissions of duties, 

THE "tariff reform" MOVEMEXT, 1906. 

In 1906 a general election in England, which the Conservatives 
attempted to fight on the issue of home rule and other topics not 
dealing with the fiscal question, but which the Liberals fought on the 
ground that their opponents were conmiitted to protection, resulted 
in an overwhelming defeat of the Unionist government. Whereas 
in the previous election held in 1900 there had been returned to the 



BRITISH EMPIRE. 653 

House 402 Conservatives and Unionists; in the election of 1906 only 
158 Conservatives and Unionists were successful at the polls. The 
new Government was definitely committed against protection and 
preference. 

Mr. Chamberlain from 1906 was prevented by serious illness from 
taking an active part in public affairs. In spite of the overwhelming 
defeat the Unionists had just received at the polls in an election in 
which the fiscal question was a prominent issue, Mr. Balfour, a leader 
of the Unionists in the House of Commons, on February 14, 1906, 
publicly affirmed, by means of a letter to Mr. Chamberlain, that 
^'fiscal reform is and must remain the first constructive work of the 
Unionist party." ^^ 

One of the major political parties of Great Britain thus committed 
itself to protection for the first time in over half a century. Mr. Bal- 
four set forth as the object of fiscal reform '' to secure more equal 
terms of competition for British trade and closer commercial union 
with the colonies," and, as a possible method, he thought it would be 
proper to establish '^ a moderate general tariff on manufactured goods, 
not imposed for the purpose of raising prices or giving artificial pro- 
tection against legitimate competition, and the imposition of a small 
duty on foreign corn." 

THE COLONIAL CONFERENCE OF 1907. 

At the colonial conference of 1902 it had been agreed that the 
conference was to meet every four years. Another conference was 
due, therefore, in 1906, but it was inconvenient for some of the 
colonies to send representatives in that year, and the conference 
was not summoned until early in 1907. At this time there was no 
chance of securing the immediate establishment of reciprocal pref- 
erence. On March 19, 1905, Lord Rosebery, one of the leaders of 
the Liberal Party, in a speech at Esher, had referred to the ap- 
proaching colonial conference as follows: 

I trust it will fall to a Liberal Government to summon that conference and to pre- 
side over its labors. But they must state quite frankly to the conference when it 
assembles, or in the circular summoning the conference, that though it may meet 
for many useful purposes and may consider all the practical questions relating to the 
Empire under the sun, there is one point on which the Government have no mandate 
to deal, and that is the question of taxed food and raw material. Outside that limit 
there is a whole field of discussion before them and I do not doubt that such a con- 
ference would be of great practical use.^^ 

Similar statements were made by other Liberal leaders. The 
Liberals won the general election of 1906 and thereby gained the 
privilege of presiding over the next colonial conference. 

There took place at the conference a great ^'preference debate," 
in the course of which it was made evident that the colonies were 
practically unanimous in favor of intra-imperial preference. All of 
the self-governing Dominions except Newfoundland had already 
enacted measures of preference to British imports. ^^ In the course 
of the debate the colonial representatives, and especially the repre- 
sentatives from Australia and Cape Colony, made ardent and eloquent 

20 Mills, J. Saxont Landmarks of British Fiscal History, pp. 103, 104. 

21 Canadian Annual Review, 1905, p. 430. 

22 The Austrahan preference measure of 1906 had been reserved, however, by the Governor General. 
See chapter on Australia. For a minor preference established in Newfoundland early in 1907, see p. 734. 



654 COLOXIAL TAEIFF POLICIES. 

pleas for a return preference by Great Britain to colonial products. 
The British representatives, however, were too near to their victory 
on the fiscal issue to be at all sympathetic. Mr. Asquith pointed out 
that since, after an extensive ''tariff reform" campaign and after 
the fullest examination and discussion, the people of England had 
declared in favor of free trade by a great majority, his Government 
could not embark upon a program which would violate that principle. 
He asserted that free trade was essential to Great Britain in the 
peculiar position she occupied in the commerce of the world. To 
establish a preference which would be of substantial value to the 
colonies would require the taxation of raw materials imported from 
foreign countries — a policy which could not be considered. The 
colonies had been granted full fiscal autonomy. They must consent 
to the exercise of a like measure of autonomy by the mother country. 
Great Britain was appreciative, he said, of the preferences which 
the colonies had granted, but their effect on British trade had not 
been important. The other British representatives at the con- 
ference, Mr. Lloyd George, then president of the Board of Trade, 
and Mr. Winston Churchill, under secretary of state for the colonies, 
argued along the same lines. 

Mr. Lloyd George was, of the British representatives, most con- 
ciliatory in his position with respect to the plea of the colonial rep- 
resentatives for preference. He suggested that it would be worth 
while to consider other measures for promoting the trade of the 
Empire, such as improved m^eans of communication and improved 
commercial intelligence, which would not involve a conflict of princi- 
ples between the colonies and the mother country. 

PREFERENCE RESOLUTIONS. 

Australia had submitted to the conference, in addition to the reso- 
lutions which had been adopted in 1902, two resolutions relating to 
preference. One of these urged the establishment of a preference in 
Great Britain for colonial products. Sir Wilfrid Laurier, representing 
Canada, declared he could not support this resolution under the 
existing circumstances. The other resolution declared that it was 
desirable that any preference accorded in the colonies to British trade 
be also granted to the trade of other self-governing colonies. Laurier 
at first gave his support to this resolution, but he later qualified it 
by stating that he wanted reciprocity, i. e., no preference granted to 
a self-governing colony which did not itself grant a preference. He 
asked to have the motion for its adoption delayed, and as a result it 
never came to vote.^^ 

The resolutions adopted at the conference of 1902 at the suggestion 
of Laurier were reaffirmed, but with the reservation by the British 
Government that they could not assent, so far as the United Kingdom 
was concerned, to the resolutions, in so far as they implied that it was 
necessary or expedient that the fiscal system of the United Kingdom 
be alter ed.^^ 

A resolution by Dr. Jameson (Cape Colony), affirming that Gi^eat 
Britain should now take into consideration the possibility of granting 
a preference to all portions of the Empire on the articles then dutiable 

« Gt. Brit., Pari. Papers, Proceedings of the Colonial Conference of 1907, Cd. 3523, p. 429. 
«4 Ibid., p. VU. 



BRITISH EMPIRE. b55 

in the British, tariff, on the ground that it had already sanctioned the 
principle of preference in the South African customs union, including 
the protectorates of Basutoland and Bechuanaland under imperial 
control, was passed by the conference, but with Botha (for the Trans- 
vaal) and the representatives of the United Kingdom dissenting, and 
Laurier absent.^-^ 

Mr. Deakin, of Australia, later submitted a resolution recommending 
that '4n order to provide funds for developing trade, commerce, the 
means of communication and those of transport within the Empire, a 
duty of 1 per cent upon all foreign imports shall be levied, or an 
equivalent contribution made by each of its legislatures, ''^^^ Lloyd 
George pointed out that on this basis England would contribute £7^ 
to each £1 contributed by all the self-governing Dominions, and 
Canada £4 to Australia's £1; and remarked that the resolution indi- 
cated, at any rate, what proportion of the cost of preferential treat- 
ment should, in Mr. Deakin's opinion, be borne by the mother 
country and by the self-governing Dominions, respectively, Laurier 
also opposed the resolution on the grounds that for practical schemes 
for improving commerce the various colonies would be prepared to 
vote the necessary funds, that any such schemes should be dealt with 
on their own merits and not tied up with proposals for preferential 
trade, and that it was a violation of constitutional principles to pro- 
vide money in advance without voting it for a specific purpose. ^^ 

The preference debate ended with the adoption of a resolution sub- 
mitted by the British representatives, reading, after amendment, as 
follows : 

That, without prejudice to the resolutions already accepted or the reservation of 
His Majesty's Government, this conference, recognizing the importance of promoting 
greater freedom and fuller development of commercial intercourse within the Empire, 
believes that these objects may be best secured by leaving to each part of the Empire 
liberty of action in selecting the most suitable means for attaining them, ha\d.ng 
regard to its own special conditions and requirements, and that every effort should 
be made to bring about cooperation in matters of mutual interest.^® 

THE "tariff reform'' MOVEMENT, 1907-1912. 

Before 1906 the fear of the Unionists that formal adherence of the 
party to the tariff-reform policy would cause division in the ranks 
of their party, whose main bond of union was opposition to home rule, 
had served to prevent them from making it a definitely avowed party 
policy. After the election of 1906 this policy of caution was aban- 
doned, as has been shown, and in the following years extensive 
campaigns for protection were given the full support of the Unionist 
Party. On November 20, 1909, Mr. Balfour once more pledged his 
party to fiscal reform, but he avoided a definite support of food taxes. 

In 1909 Mr, Lloyd George, then chancellor of the exchequer in the 
Liberal Government, submitted his famous budget, which proposed 
that the revenues for an ambitious scheme of social legislation and 
for a greatly increased expenditure on the navy be provided from 
increased direct taxation on incomes and land, without recourse to 
new import taxation. The Liberals were able to carry the budget 

, 25 Gt. Brit. Pari. Papers, Proceedings of the Colonial Conference of 1907, Cd. 3523, p. VIII. 

26 Ibid., pp. 519 and 527. 

27 Ibid., p. 443. 

28 Ibid., p. VII. 



656 COLONIAL TABIFF POLICIES. 

in the House of Commons, but the Lords threw it out, and a general 
election followed in January, 1910. The Unionists in this election 
accepted tariff reform as an issue, but the Liberals were returned, 
although with a majority substantially less than that they had 
gained in their tremendous victory in 1906. The two Houses again 
failed to come to an agreement, however, and in December, 1910, 
the Liberals once more appealed to the people in a general election 
in which tariff reform was made an importaxit issue by the Liberals. 
The Unionists, however, feared that this issue endangered their 
chances of success in the election. Balfour, therefore, declared that 
the election did not turn on the question of tariff reform and agreed to 
submit the question to a popular referendum, for decision if his party 
should be returned to power. The Liberals were again reelected, 
with almost precisely the same majority as in the previous election. 

In Novemter, 1911, Mr. Balfour resigned the leadership of the 
LTnionists. At the same time, Mr. Austen Chamberlain, a son of 
Joseph Chamberlain and one of the leaders of the party,^^ abandoned 
the referendum policy. ^^ Tariff reform," he declared, "is now part 
and parcel of conservatism, without need of further m.andate, sanction, 
or approbation. The moment the Unionist Party are returned to 
power they will set about converting their tariff-reform propaganda, 
their principles of imperial preference, and of fair and equal treatment 
for their own people, into a statutory form." ^° ^.ir. Bonar Law^ was 
chosen to succeed Mr. Balfour as leader of the Unionist Party. 
In December, 1911, i^Ir. Austen Chamberlain declared that the 
Unionists proposed to lev^y- taxes on foreign foodstuffs and manu- 
factures with reductions or remissions of duty on colonial products. 
But a few days later Mr. Bonar Law said that his party if returned 
to office would call a conference of the Dominions, and only if they 
requested it would the Government impose taxes on food. In 
Canada there was resentment against tliis attempt to shift upon the 
colonies the responsibility of deciding the domestic fiscal polic}" of 
the mother country. 

In November, 1912, the Unionist Party definitely abandoned the 
referendum policy, and committed itself without reservations to 
tariff reform, including taxes on foodstuffs. There resulted some 
opposition from the free-trade wing of the party. In order to 
maintain the unity of the party, most of the Unionist members in the 
House of Commons pledged themselves to a tariff on manufactures 
with preference to the colomes, and left the question of food taxes to 
future decision, in consultation with the colonies. This compro- 
mise on the question of food taxes was to the more enthusiastic 
tariff reformers a severe blow. It was generally acknowledged that, 
without taxes on food, preference to colonial products could not be 
made of great value to the self-governing Dominions. 

THE IMPERIAL CONFERENCE OF 1911. 

In 1911 another conference of representatives of Great Britain and 
the colonies was held in London. In conformity with a resolution 
passed at the colonial conference of 1907 the title of ^4mperiaL 0on- 

29 Upon the resignation of Mr. Bonar Law in April, 1921, ilr. Austen Chamberlain was recognized as 
leader of the Unionist forces in the Coahtion Government, 
so Cobden Club Pamphlet: A Decade of Tariff Fooling, p. 39. 



BRITISH EMPIRE. 657 

ference" was assumed. The British representatives at the confer- 
ence were determined not to permit a repetition of the ^^ preference 
debate" of 1907, and succeeded in keeping preference off the pro- 
gram. The conference confined itself to the discussion of such mat- 
ters as the improvement of cable services and of shipping facilities 
between the various parts of the Empire. 

IV. Summary. 

In the forties and fifties of the last century Great Britain adopted a 
thoroughgoing free-trade policy. She abolished practically all her 
customs duties, including the preferential duties on colonial products, 
and she opened to foreign vessels even the coasting trade of the 
United Kingdom. Until nearly the end of the nineteenth century 
the British held so firmly to free trade that they did not even accede 
to the desire of certain colonies to establish preferential tariffs in 
favor of British trade. None the less^ from about 1880 the national- 
istic and protectionist trend of v/orld opinion began to manifest itself 
in the fiscal policies of the Dominions and in the political discussions 
of the mother country. The trend of opinion in Great Britain may 
be seen in two closely related phases — protection and imperial pref- 
erence. The protectionist idea was dominant in the "i^ir trade" 
discussion of the eightieSj but for a dozen years after the Ottawa 
conference of 1894 public attention was given rather to the imperial 
and preferential aspect of the fiscal question. But the agitation 
which Joseph Chamberlain initiated in 1903, with preference to the 
colonies as its main purpose, gradually developed into a movement 
for protection to British industries with preference to the colonies 
as an incidental feature, included largely because it gained for " tariff 
reform" adherents who could not be converted to protection for its 
own sake. 

Up to the outbreak of the war the preferential-protectionist move- 
ment in Great Britain had won only ujiimportant successes in the way 
of legislation or of political action. In that country practically all 
legislation proceeds from the cabinet representing the dominant 
party, and tariff reform had not been adopted as part of the program 
of a dominant party, since the Conservatives adopted it only after 
their disastrous defeat of 1906, While the Conservatives were in 
power, from 1895 to 1905, they gave no formal approval to imperial 
preference, though the only tangible successes of the movement 
before 1914 were obtained at this time. They may be enumerated 
as follows: (1) In 1897 Great Britain denounced her treaties with 
Belgium and the ZoUverein which had stood in the way of the estab- 
lishing of preferential tariffs in the Dominions. (2) In 1898 and 
1899 limitations upon the tariff rates upon British products were in- 
cluded in the charters of Rhodesia, and these later produced a differ- 
ential tariff in that colony. (3) In 1902 Great Britain signed the 
Brussels sugar convention. This resulted in her paying a higher 
price for beet sugar, to the advantage of her colonies; but the con- 
vention pledged her to the policy of granting no preference upon 
sugars produced in her colonies, (4) In 1903, reversing the policy 
pursued for half a century, the British Government assented to the 
introduction of preferential tariffs in the Crown colonies in South 



658 COLONIAL TAEIFF POLICIES. 

Africa and of differential duties upon tin ore exported from the 
Federated Malay States. Indeed, the British Government seems to 
have been an active agent in establishing the preference in the South 
African customs union. It may be considered a fifth success of the 
preferential movement that the British Government threatened to 
retaliate in case Germany penalized the British Empire for the prefer- 
ential tariff policies of the Dominions. But in this case, as in the 
four others, there was, in fact, no departure from the free-trade and 
nonpreferential tariff policy so long enforced in the United Kingdom — 
unless the condemnation by the Brussels convention of bountied 
sugar be considered a departure from free- trade principles. 

Up to 1914, therefore, it may be said that the preferential-protec- 
tionist movement in Great Britain had won the Government to the 
support of preferential tariffs in the colonies but had had no effect 
upon the tariff in force in the United Kingdom. Whatever tangible 
successes the movement had obtained were won while the Conserva- 
tive Party v/as in power, but from the end of 1905 to the beginning 
of the war the Liberals were in control, and they were so hostile that 
thej prevented even the discussion of the subject at the imperial 
conference in 1911. None the less the movement made distmct 
headway in these years and scored a notable success in that the 
Conservative Party committed itself definitely to '' tariff reform/^ 
though it left the scope of the promised reform uncertain. 

{Bibliograpliy on page 832,) 



Chapter XIII. 
THE PREFERENTIAL POLICY IN CANADA. 



CONTENTS. 



I. Tariff history to 1879: 

Repeal of early prefereaices 660 

Reciprocity treaty with the United 

States, 1854 661 

Gait's tariff, 1859; preferential features... 661 

The confederation tariff, 1867 662 

Preferential duties in the tariff of 1870. . . 662 

II. Movement for reciprocal preferences, 

1879-1897: 
' ' The national policy "and preference . . . 662 

The tariff of 1879 663 

The Liberal Government and the tariff. . 664 

The tariff of 1897 664 

The reciprocity sections of the act . . . 665 

Schedule D .—Reciprocal tariff 665 

The debate on the "reciprocal tariff". 665 
"Reciprocal tariff" extended to most- 
favored-nation countries 667 

III. The preferential poUcy , 1898-1907: 
Preferential tariff of 1898 668 

Comparison of rates of duty mider 
general tariffs of 1894 and 1897 and 

under nref erential reductions 668 

"Table 1.— Rates of duty, 1894, 1897, 

and 1898 669 

The preferential tariff, 1898-1902 669 

Preference increased, 1900 670 

Canada at the colonial conference, 

1902 670 

Canadian change of policy 671 

Canadian surtax, on G erman products ... 672 
Movement in Canada for revision of the 

tariff, 1901-1907 673 

Canadian preference modified, 1904; 

preference on woolens reduced 673 

Revision of tariff, 1906-7 674 

IV. Canadian tariff poUcy, 1907-1911 675 

The preference movement in Canada, 

1907-1910 676 

The preference impaired by concessions 
to other countries, 1910^- 

Concessions to France 676 

Intermediate rates granted to Bel- 
gium and The Netherlands 677 

Concessions to Italy 678 

Reduction of rates in general tariff 

granted to the United States 678 

Effect of concessions on British pref- 
erence 679 

Table 2. — Rates of duty on, and 
imports of, selected articles 
specified in Franco-Canadian 

convention of 1907 (1910) 679 

Agreement negotiated with the United 

States, 1911 680 

The failure of the agreement 681 

Defeat of the Liberal G over nment, 1911 683 
Table 3. — Imports into Canada 
of articles specified in the reci- 
procity arrangement with the 
Gnited States, fiscal year end- 
ing March 31, 1910 683 

The significance for the preference 
movement of the defeat of reci- 
procity 1 684 



V. The preferential policy in Canada, 1911- 

1921: 
The Conservative Government and the 

preference, 1911-1914 685 

The customs war revenue act, 1915 685 

Canadian attitude toward the war-time 

preference movement in Great Britain. 685 
Agitation for revision of the tariff — 

The Coalition Government and the 

tariff 686 

Farmers' campaign for lower tariff— 

The farmers' tariff' program 687 

Liberals favor farmers' program; 

manufacturers oppose it 688 

Preference increased by tariff' amend- 
ment of 1919 689 

Liberal convention, August, 1919, de- 
mands increase of preference 690 

Preference decreased by abolition of war 

surtax 691 

Customs ruling on exchange aids British 

preference 691 

Franco-Canadian trade agreement, 1921. . 692 
Tariff revision pending 693 

VI. Intercolonial preference: 

Summary of Canada's tariff' relations with 
other British possessions — 

EarUer negotiations; tariff of 1897 693 

Preferential tariffs of 1898 and 1907. . . 694 

New Zealand 694 

South Africa 695 

British West Indies 695 

Other Crown colonies 695 

Australia 695 

Newfoundland 696 

Relations of Canada with the British 
West Indies- 
Negotiations for reciprocal preference, 

1883, 1S90 696 

Canadian preference conceded to West 

Indies, 1898 697 

The situation changes in 1903 — 

The Brussels sugar convention, 

1903 699 

United States-Cuba reciprocity 

treaty, 1903 699 

Canadian surtax on German 

sugar, 1903 '. 700 

Changes in Canadian tariff, 1904 and 

1907 700 

Table 4.— Preferences on sugar, 

1897 and 1907 701 

Concession m 1909 to Canadian re- 
finers. 702 

Table 5. — Sugar production in the 
British West" Indies and im- 
ports into Canada 702 

Renewed negotiations for reciprocal 

preference 703 

Royal commission to mvestigate the 
commercial relations of Canada and 

the British West Indies, 1909 703 

Report of the commission 704 

Recommendations of the commis- 
sion 705 

659 



660 



COLONIAL TARIFF POLICIES. 



VI. Intercolonial preference— Con. Page. 
Relations of Canada with the British 

West Indies— Continued. 
The Canada-West Indies trade agree- 
ment. 1912.. 706 

Ratification of the agreement 707 

Differing trade relations of West 

Indian colonies 707 

Table 6.— Trade of the West 

Indian colonies, 1912 708 

Terms of the agreement 709 

Table 7.— Changes m Cana- 
dian tariff, 1913-14 710 

The Canada-West Indies trade agree- 
ment, 1920 711 

Increased preferences of the new- 
agreement 712 

Table 8.— Preferential rates of 

1912 and 1920 712 

Increased preference on sugar 713 

Table '9.— Preferences on su- 
gar, 1897-1921 714 

Provision for improved steamship 
service 714 

VII. Other preferential provisions: 

The provisions for British preference in 
the Canadian tariff law 715 



VII. Other preferential provisions — Con, Page. 

Cirect shipment 717 

"Bona fide" British products 718 

Preferential aspects of Canadian anti- 
dumping legislation- 
Undervaluation 718 

Preferential aspects of the Canadian 
customs administration laws— 
"Fair market value for home con- 
sumption'' 719 

Effect of direct shipment on entrepot 

trade 720 

Sections of the customs act astablish- 
ing a preference on imports from 
Great Britain 722 

VIII. Mcst-favored-nation treaties and Cana- 
dian tariff relations: 

The position of Canada with respect to 
British treaties— 

The right of separate adherence 722 

The right to claim release from treaty 

obligations 723 

The right of separate withdravv al 723 

Treaties especially on Canada's behalf. . . 724 
Countries entitled to most-favored-nation 
treatment in Canada 724 

IX. Summary 724 



The Dominion of Canada, because of the character of its population 
and because of its proximity and of the voiame of its trade, is of much 
greater importance to the United States than any other Dominion or 
colony. In 1920, indeed, Canada bought American products to a 
value which exceeded that of the purchases of all other colonies com- 
bined. And because it is the oldest, largest, and richest of the Domin- 
ions, and because of the independent leadership shown in its com- 
mercial policies, Canada has been more influential in shaping the com- 
mercial policy of the British Empire than has any other British 
dependency. 

I. Tariff History to 1879. • 

REPEAL OF EARLY PREFERENCES. 

In the preceding chapter reference has been made to the preferential 
trade relations existing betw^een Canada and the mother country in 
the early part of the last century, whereby Canadian timber and wheat 
and certain other products enjoyed special privileges in the British 
market, and w^hereby, under the application of the navigation acts, 
Canada enjoyed a prosperous trade wdth the West Indies. In the 
forties, under the influence of free- trade views in England, these trade 
advantages gradually began to disappear. It w^as at this time also 
that the colonies w^ere granted the right to determine their own tariffs. 
By 1853 all of the preferences except those on lumber, food, wine, 
and spirits had been abolished and in 1860 the last, those on timber 
and wine, were repealed. In 1849, moreover, the last of the navigation 
restrictions v/as removed and trade between Great Britain and the 
colonies W'as opened to the vessels of all nations. 

With her recently won autonomy Canada in 1847 proceeded to 
reduce the tariff ^ on manufactures of the United States, and to raise 
the rates on British manufactures in the hope of securing closer com- 
mercial relations wath the United States. But the American duties 
on Canadian products w^ere not lowered in response to the Canadian 

1 At that time Canada consisted of the two Provinces of Upper Canada (Ontario) arid Lower Canada 
(Quebec). Nova Scotia followed the example of Canada and abolished the tariff preferences. The Prov- 
ince of New Brunswick, on the other hand, retained in her tariff of 1848 preferences to British goods 
amounting in some cases to 75 or 80 per cent of the ordinary duty. Prince Edward Island likewise estab- 
lished a preference on British goods. 



CA:^rADA. 661 

action, and the loss of the British preferences led, in 1849, to a con- 
siderable agitation in Canada for annexation to the United States. 

The Imperial Government was, at that time, opposed to the grant- 
ing of trade preferences by the colonies to one another. Nevertheless, 
Canada in 1850 passed an act permitting free entry of the products 
of other North American colonies which was not disallowed by the 
home Government, and before the confederation of the colonies in 
1867 most of them were granting reciprocal concessions to each 
other. In 1868 the privilege of establishing intercolonial prefer- 
ences from which Great Britain was excluded was formally granted 
to the British North American colonies. 

RECIPROCITY TREATY WITH THE UNITED STATES, 1854. 

In 1854 a reciprocity treaty was negotiated, with the assistance of 
the imperial authorities, between all the British North American colo- 
nies and the United States. This treaty provided for the free ex- 
change between the colonies and the United States of the natural 
products of both countries.^ It involved discrimination in colonial 
tariffs against British products in favor of foreign imports, a privilege 
which has never been formally extended to British colonies.^ But 
the economic distress of the colonies and the fact that there was prac- 
tically no competition for their trade between Great Britain and the 
United States led the imperial authorities to depart from their usual 
policy and to sanction the treaty. 

galt's tariff, 1859; preferential features. 

In 1859 the Canadian Legislature passed a tariff Lct introduced by 
A. T. Gait, the minister of finance^ which levied considerably increased 
duties on manufactures, without discrimination between British and 
foreign goods. On the suggestion of the manufacturers of Sheffield, 
the imperial authorities protested against the new duties. Gait in 
his answer aiFirm^ed in plain language the right of Canada to decide 
for itself both as to the mode and extent of its customs taxation, and 
the principle he then maintained has never since been seriously 
questioned. The imperial authorities in later years have protested 
against protective measures, but the exercise of the imperial veto to 
suppress such measures was never considered. 

But Gait also pointed »out that the legislation just enacted intro- 
duced by indirect means a measure of preference to England. In 
place of the previous specific duties, the Government had introduced 
ad valorem duties, based not upon the value of the goods at the place 
of import, but upon their value in the market where bought. This 
change had for its object the encouragement of Canada's sea trade as 
against her land trade with the United States. The ad valorem 
duties when calculated in this manner tended both to favor direct 
purchase from the country of origin, and thus to foster trade and 
shipping with the mother country direct instead of through New York 
importers, and also to offset to some extent the advantages in ship- 

2 The treaty was effective from Mar. 16, 1855, to Mar. 17, 1868. For a full account of the treaty, its effects, 
and its abrogation, see the United States Tariff Commission's report on Reciprocity and Commercial 
Treaties, pp. 67-92. 

3 Discrimination by a British colony in favcr of foreign products and against British products wa? again 
permitted when the inclusion of the Oranre Free State in the South African customs union was sanctioned. 
See p. 741. See also Nev/foundland's treaty Vv'ith Greece, p. 735 



662 COLONIAL TAEIFF POLICIES. 

ping costs enjoyed by the American producer, owing, to his greater 
proximity to the Canadian market. This method of valuing imports 
was continued until confederation, and was adhered to in the tariff 
legislation of the Dominion. 

THE CONFEDERATIOX TARIFF, 1867. 

When, in 1867, the Dominion of Canada was formed by the con- 
federation of Quebec, Ontario, New Brunswick, and Nova Scotia the 
common tariff adopted was, on the whole, an average of the former 
different provincial tariffs. As New Brunswick and Nova Scotia had 
had low^er duties than the old Province of Canada, this resulted in a 
lowering of the Canadian tariff. The tariff provided for the admission 
free of duty of certain articles when imported from Prince Edward 
Island, which had not as yet entered the confederation. In return 
Canadian breadstuffs w^ere admitted into the island free of duty. 
There were no other preferential provisions in the tariff. 

PREFERENTIAL DUTIES IN THE TARIFF OF 1870. 

In 1870 the tariff underwent some revision. Two items in the 
tariff act, although of minor significance by themselves, are not un- 
important in relation to the history of the British preference. One 
of these was the duty of 5 cents a bushel imposed on salt for the pur- 
pose of preventing alleged dumping of American salt. British salt 
paid no duty. This w^as the first instance after 1846 of a direct 
preference to British imports in the Canadian tariff, a preference still 
in effect, although changed in amount. The other preference, though 
one not confined to Great Britain, was the duty of 10 cents a pound 
levied on tea imported neither from Great Britain nor from the 
country of origin, ail other tea being admitted free of duty. This 
duty was canceled in 1874 on the ground that it was burdensome' to 
the consumer. 

II. Movement for Reciprocal Preferences, 1879-1897. 

"THE NATIONAL POLICY" AND PREFERENCE. 

By 1876 the tariff had become the chief political issue in Canada 
and in order to make a policy of protectiorw agreeable to the British 
Government its advocates thought it well to hold out to British 
commerce the prospect of preferential treatment of British products 
which would compensate for the higher duties. In the budget debate 
of 1878 the Conservative opposition made strong pleas for preferential 
duties; one speaker urged the, at that time, novel view that prefer- 
ence in customs duties should be given to British products as a favor 
in return for the favors Great Britain bestowed upon Canada in 
bearing alone the whole burden of imperial defense and in admitting 
Canadian products into her markets on more favorable terms than 
those on which they were admitted into the United States.^ But the 
higher duties were also advocated by the opposition as a purely 
'^national policy" of protection to Canadian industries and without 
reference to British advantage. 

« House of Commons Debates, Mar. 1, 1878, p. 688. 



CANADA. 663 

THE TARIFF OF 1879. 

When the Conservatives won the general election in the summer of 
1878, they proceeded to remodel the tariff on frankly protective lines. 
The duties on manufactures were raised from an average of 17 J per 
cent to an average of 30 per cent, and many articles which had 
previously been on the free list were made dutiable. The tariff of 
1879 contained a number of provisions which operated either directly 
or indirectly to establish a preference on British imports. They were 
passed in Parliament without much discussion, and undoubtedly in 
many cases the purpose was rather to favor certain Canadian importers 
or to retaliate against the United States than to confer special benefits 
on British exporters. Although these provisions were not very 
important when taken singly, they served in combination to confer 
distinct advantages on British trade. 

One provision of the act established a direct preference to British 
products by stipulating that in determining the dutiable value on 
merchandise, except when imported from Great Britain, there should 
be added to the fair market value at the time of exportation in the 
markets of the country whence the article had been imported into 
Canada, 'Hhe cost of inland transportation, shipment, and transship- 
ment with all expenses included, from the place of growth, produc- 
tion, or manufacture, whether by land or water, to the vessel in which 
shipment is made, either in transit or direct to Canada." This 
preference to British exporters, which was considerable in the case 
of goods subject to heavy freight charges and high ad valorem rates, 
was omitted from the 1886 revision of the tariff as a result of the 
German Government's protest that it violated its most-favored-nation 
treaty of 1865 with Great Britain. 

Another provision of the act of 1879 made possible under certain 
circumstances the application of higher duties to American than to 
British products. A duty on tea was reenacted, but without the 
provision for free importation of tea from the country of origin or 
from Great Britain, which had been stipulated in the act of 1870. 
The tea and coffee duties were accompanied, however, by a provision 
that if the United States should impose higher duties on tea or coffee 
imported from Canada than on similar imports from any other 
country, the Governor in Council would be authorized to impose 
additional duties on imports of these articles from the United States 
equal to the American duties on tea or coffee imported from Canada. 

While the Conservative Party remained in power (1878-1896) it 
represented the manufacturing interests of Canada. These interests 
were ardent advocates of protective legislation, and they made little 
distinction between the competition of British and of American manu- 
facturers. The Liberal Party was a tariff -for-revenue party. Both 
parties favored reciprocity with the United States, but the Liberals 
as a rule were willing to go further than the Conservatives in this 
direction. But the failure of all attempts to secure a reciprocity 
arrangement with the United States satisfactory to Canadian inter- 
ests, and the growing belief in Canada, after the enactment by the 
United States of the McKinley tariff of 1890, that the latter country 
was deliberately unfriendly in commercial matters in the expecta- 
tion that economic distress would force Canada into the American 



664 COLONIAL TARIFF POLICIES. 

union, turned Canadians in increasing numbers to view with favor 
proposals for imperial preference. 

THE LIBERAL GOVERNMENT AND THE TARIFF. 

In the election of 1896 the Liberal Party gained control of the 
Government. Their victory was due in large part to issues other 
than the tariff, but it was generally accepted as an expression by the 
electorate of their approval of the Liberal tariff policy of reciprocal 
preference between Canada and the LTnited States on the basis of a 
Canadian program of tariff for revenue onljo The reciprocity with 
Great Britain advocated by the Conservative Party, on the other 
hand, assumed a policy of protection to Canadian goods. 

In the course of the campaign and soon after the election, however, 
there were developm_ents which made it doubtful whether the new 
Government would fully redeem its pledge to abolish protective 
duties. In the course of the campaign Laurier and other Liberal 
leaders had assured industrial districts that no step v\^ould be taken 
which would radically impair the prosperity of Canadian manu- 
facturing industries. In 1896, soon after the election, and again in 
1897, members of the newly appointed cabinet were sent on missions 
to Washington to negotiate reciprocity with the United States. 
They clauned to have received some favorable assurances, but their 
missions were without results; for in 1896 the Democrats had been 
beaten in a presidential election, and in 1897 the Republicans re- 
ported to the House the Dingley tariff bill with rates on Canadian 
products higher than even the rates of the McKinley tariff. Before 
drafting its new tariff, the Liberal Government sent a tariff commis- 
sion, composed of cabinet ministers, on a tour through the country 
to hold hearings and learn the sentnnent of the people. Owing to 
lack of time, the commission did not visit the vv astern Provinces or 
the maritime Provinces, where low-tariff sentiment was strongest, 
and its hearings were attended most largely by manufacturers desu^- 
ing the retention of the protective tariff. Considerable resentment 
agaiDst the impending American tariff legislation found expression 
at these hearings, and suggestion was repeatedly made that no 
reductions of duty be enacted which would benefit American ex- 
porters. 

THE TARIFF OF 1897. 

The new tariff legislation was submitted to the House of Com- 
mons for its approval on April 22, 1897. On the whole, it proposed 
no drastic impairment of the '^national policy" of protection. Some 
important reductions and remissions of duty were provided, but 
the new tariff was substantially the same as the old. In several 
important schedules the rates of the new tariff were higher than the 
rates of the old. 

in one respect, however, the new tariff was different from any of 
its predecessors. It provided for a '^reciprocal tariff,'^ the rates of 
which were to be 12^ per cent lower than the rates of the general 
tariff until June 30, 1898, and 25 per cent lower than therrates of tiie 
general tariff* after that date. These reduced rates were to apply 
to any country admitting the products of Canada on terms which 
were as favorable as the terms of the reciprocal tariff. All duti- 



CANADA, 665 

able articles were included in the reciprocal tariff, except alcoholic 
liquors, tobacco and its products, and sugar and molasses. These 
were omitted in order to protect the revenues, which depended 
largely upon the excise and customs taxes on these items. 

THE RECIPROCITY SECTIONS OF THE ACT. 

The sections in the act establishing a '^ reciprocal tariff" were as 
follows : 

1. When the customs tariff of any country admits the products of Canada on terms 
which, on the whole, are as favorable to Canada as the terms of the reciprocal tariff 
herein referred to are to the countries to which it may apply, articles which are the 
growth, produce, or m-anufacture of such country, when imported direct therefrom, 
may then be entered for duty, or taken out of warehouse for consumption in Canada, 
at the reduced rates of duty provided in the reciprocal tariff set forth in schedule D 
of this act. 

2. Any question arising as to the countries entitled to the benefits of the reciprocal 
tariff shall be decided by the controller of customs, subject to the authority of the 
Governor in Council . 

3. The Governor in Council may extend, the benefits of the reciprocal tariff to any 
country entitled thereto by virtue of a treaty with Her Majesty, 

4. The controller of customs may make such regulations as are necessary for carry- 
ing out the intention of this section. 

SCHEDULE D. — RECIPROCAL TARIFF. 

On all the products of countries entitled to the benefits of this reciprocal tariff 
under the provisions of section 17, the duties mentioned in schedule A shall be re- 
duced as follows: 

On and after the 23d of April, 1897, until the 30th day of June, 1898, inclusive, the 
reduction shall in everjr case be one-eighth of the duty mentioned in schedule A, 
and the duty to be leaned , collected, and paid shall be seven -eighths of the duty 
mentioned in schedule A. 

On and after the 1st day of July, 1898, the reduction shall in every case be one- 
fourth of the duty mentioned in schedule A, and the duty to be leaded, collected, 
and paid shall be three-fourths of the duty mentioned in schedule A : Provided, how- 
ever, That these reductions shall not apply to any of the following articles, and that 
such articles shall in all cases be subject to the ^^ties mentioned in schedule A, viz, 
wines, malt liquors, spirits, spirituous liquors, liquid medicines and articles con- 
taining alcohol; sugar, molasses, and sirups of ail kinds, the product of the sugar cane 
or beet root; tobacco, cigars, and cigarettes. 

The reciprocal tariff, it was frankly admitted by the Government, 
was intended to apply only to the products of Great Britain and 
possibly some of the British free-trade colonies. But the treaty 
restrictions ^ rendered impracticable the outright grant of preferen- 
tial treatment to imports from Great Britain. The phrasing of the 
provision was therefore made more general than its application was 
intended to be. 

THE DEBATE ON THE '' RECIPROCAL TARIFF," 

r. Fielding, the minister of finance, in explaining the reason for 
the inclusion of the ''reciprocal tariff'' provision in the law, took 
the ground that the Liberal preelection promise of a revenue tariff 
had been predicated on the belief that the United vStates was about 
to enter upon a more liberal trade policy. But the Dingley bill, 
then before the United States House of Representatives, indicated 
a tendency in the contrary direction, and it would be unwise for 

See p. 635. 



666 COLONIAL TARIFF POLICIES. 

Canada to yield concessions to the United States before knowing 
her attitude. '^We propose, therefore/' he said, 'Ho have a gen- 
eral tariff, and that general tariff will be, to a large extent, the 
tariff of to-day * * * and then we propose to adopt a special 
tariff having reference to the countries which are desirous of trad- 
ing with us, and as a matter of course, not by the express words of the 
resolution, but by the condition of affairs which exists, that prefer- 
ential tariff gives preference, above all others, to the products of 
Great Britain." He pointed out that in this respect the Govern- 
ment had departed from the spirit of all earlier proposals of prefer- 
ence in that no demand was made upon Great Britain for a like 
measure of preference to Canadian products. '^Leading public 
men," he said, '^have advocated preferential trade but alwaj^s an- 
nexing to their suggestions a demand with which it was well known 
England could not comply. All the advocates of preferential trade 
have assumed that, as a first step, England must put a duty on corn. 
We know that England does not view that project with favor. It 
may be that at a very early date they may see it in their interest to 
offer some preferential rate to the grain of Canada. If they can be 
induced to do that by fair argument, I have no doubt it will be a 
good thing for Canada. But why should we wait for England to 
take action. England has dealt generously with us in the past. 
She has given us liberty to tax her wares, even when she admits our 
goods free, and we have taxed them to an enormous degree."^ 

Sir Hichard Cartwright, the minister of trade and commerce, sup- 
ported the preferential tariff and the higher duties on American 
products.' He explained the reciprocal tariff provisions as a flank 
attack on the protective tariff policy which the Government was not 
strong enough to attack directly.^ 

The provision for a 'Reciprocal tariff'" met with forceful criticism 
from the Conservative opposition in the House. It was opposed on 
the grounds that by granting a preference freely to Great Britain it 
endangered the success of the movement for reciprocal preference; 
that the free admission of Canadian products into Great Britain was 
not a favor demanding compensation since it was enjoyed by all 
countries alike; and that the provision ''was free trade in disguise." 
The Conservatives charged that in many cases the 'Reciprocal tariff" 
provided only for fictitious reductions since the general rates of the 
new tariff had been increased in order to leave the '' reciprocal" rates 
at the same level as the rates of the old tariff. On the whole, the 
Conservatives did not openly object to the more favorable treatment 
of British than of foreign commerce, but they contended that the 
favor should not have been granted except in return for a preference 
to Canadian products in the British market, and that the Government 
would not be able to withhold the lower schedule of duties from 
foreign products. Some of the less prominent members of the Con- 
servative Party, however, opposed the preferential as such.^ 

The discussion centered mainly about the bearing of the most- 
favored-nation treaties on the 'Reciprocal tariff." The Conserva- 
tives freely predicted that the Government would find itself forced 

6 House of Commons Debates, Apr. 22, 1897. 

7 Ibid., Apr. 26, 1897, p. 1244. 

8 Cf. S. Morley Wickett, in Annals of American Academy of Pol. Sc, vol. 45, Jan., 1913, p. 29. 
eCf. House of Commons Debates, Apr. 27, 1897, p. 1368, and Apr. 29, 1897, p. 1515. 



CAM AD A. 667 

to extend the reciprocal schedule to all of the treat}^ countries, in- 
cluding almost all of Europe. Otherwise, they declared, Canada 
would be violating treaty obligations of the Empire. The cabinet 
ministers were not agreed themselves as to the proper interpretation 
of the most-favored-nation clauses in the treaties with Belgium and 
the Zollverein. In support of the contention that they did not 
apply, the points were made by different members of the Govern- 
ment that the treaties in mentioning British colonies were not in- 
tended to include self-governing Dominions, and that only countries 
granting to Canadian products as favorable treatment as they re- 
ceived from Great Britain could claim like treatment with that 
accorded to Great Britain. Sir Richard Cartwright, in support of 
the last-named contention, invoked the conditional interpretation 
of the most-favored-nation clause (to which the United States, but 
not Great Britain, adheres) to the effect that most-favored-nation 
treatment does not include the obligatory grant by A to treaty 
country C of a favor given to country B for compensation.^^ But 
both Sir Richard Cartwright and Mro Fielding, the minister of finance, 
expressed their confidence that if the Government's interpretation 
proved mistaken, the Imperial Government would release Canada 
from the treaty restrictions by denouncing the objectionable clauses. 
It was even intimated that the Government's action in providing for 
a preference to British products would prove to be the best method 
of securing such denunciation. 

"RECIPROCAL tariff" EXTENDED TO MOST-FAVOHED-NATION COUNTRIES. 

In accordance with usual Canadian practice, the new tariff came into 
effect provisionally immediately upon its submission to the House of 
Commons. According to the terms of the bill, the decision as to 
what countries were entitled to the lower duties of the reciprocal 
tariff lay with the minister of customs, subject to the Governor 
General in council. The customs collectors were instructed to admit 
only imports from Great Britain at the reduced rates. The Belgian 
consular representatives immediately protested and the imperial 
authorities soon informed the Canadian Government that Belgium, 
and Germany, by virtue of their treaties with Great Britain guar- 
anteeing them as favorable treatment in the British colonies as was 
there accorded to British products, and a number of other countries 
by virtue of their treaties with Great Britain guaranteeing them as 
favorable treatment in the British colonies as was accorded to any 
other foreign country, must receive any concessions of duty extended 
to British products. Imports from Belgium and Germany and from 
Argentina, Austria-Hungary, Bolivia, Colombia, Denmark, Liberia, 
Morocco, Persia, Russia, Salvador, Sweden and Norway, the South 
African Republic, Spain, Switzerland, Tonga, Tunis, and Venezuela 
accordingly were granted the benefit of the reduced rates by virtue 
of treaty rights. Great Britain, New South Wales, India, Holland, 
and Japan received the reduced rate because of ''the reciprocal 
character of their tariffs." France and the French colonies received 
them in conformity with the Franco-Canadian convention of 1893, 
which guaranteed France as favorable tariff treatment in Canada as 

1" See report of the United States Tariff Commission on Reciprocity and Commercial Treaties. 
185766°— 22 43 



668 COLONIAL TARIFF POLICIES. 

was accorded to any foreign country. The higher duties collected 
in the interim between the application of the new tariff and the 
determination of the countries entitled to the lower duties were re- 
funded to the importers. 1^ 

The United States, in the absence of a treaty with Great Britain 
entitling her^ even under the unconditional or the British interpreta- 
tion of the most-favored-nation clause, to favored-nation treatment in 
Canada, was alone among the important commercial nations trading 
with Canada subjected to the duties of the general tariff. 

Ill, The Preferential Policy, 1898-1907. 

PREFERENTIAL TARIFF OF 1898. 

At the instance of the colonial conference held in London in 1897 
the British Government gave the necessary 12 months' notice ter- 
minating the German and Belgian treaties. ^^ 

The other most-favored-nation treaties by which Canada was 
bound were not an obstacle to the granting of preference within the 
British Empire. Accordingly, Canada took advantage of her newly 
gained freedom to substitute for her former general offer of lower rates 
to all countries whose terms were sufficiently favorable a provision 
for the grant of the preferential duties, after August 1, 1898, to the 
products of Great Britain, Bermuda, the British West Indies, and 
British Guiana, and for their extension, at the discretion of the 
minister of customs, to any other British colony or possession, the 
customs tariff of which was, on the whole, as favorable to Canada as 
the preferential duties were to such colony or possession. The 
preferential reduction vfas also extended to imports of raw sugar 
when imported direct ^^ from any British colony or possession. In 
accordance with the act of 1897, the amount of the preference was 
increased, beginning with July 1, 1898, to 25 per cent of the rates 
specified in the tariff. By Orders in Council of July 14. 1898, the 
preference v/as extended to British India, New South Wales, and 
Straits Settlements. 

COMPARISON OF RATES OF DTPFT UNDER GENERAL TARIFFS OP 1894 AND 1897 AND 
UNDER PREFERENTIAL REDUCTIONS. 

Table 1 makes a comparison for a number of the most important 
items in the dutiable schedule of the Canadian tariff of the rates 
of duty effective under the customs act of 1894 with the rates of the 
customs act of 1897 under the general tariff^ the reciprocal tariff of 
1897, and the preferential tariff of 1898. The general tariff of 1897 
averaged somewhat over 30 per cent ad valorem on manufactured 
products. The reciprocal tariff, with its reduction of 12 J per cent 
from the rates on the general tariff, therefore, represented a reduc- 
tion in duties averaging about 4 per cent ad valorem, and the prefer- 
ential tariff of 1898 represented a reduction averaging about 8 per 
cent ad valorem from the rates specified in the general tariff. 

11 Fielding, House of Commons Debates, Apr. o, 1898. 

i» Canadian goods imported into Germany were now compelled to pay the rates of the general tariff (see 
supra, p. 649), while Great Britain and the British colonies with the exception of Canada continued to enjoy 
most-favored-nation privileges in Germany by virtue of the special law put into effect May 11, 1898. 

" Seep. 717. 



CAI^ADA. 669 

Table 1. — Comparison of rates of duty under Canadian tariff acts of 1894, 1897, and 1898. 



Tariff 

No. 



219 

276 



362 
368 

447 
294 

362 

201 
403 

248 



280 
227 
315 
321 

140 
394 



Article. 



Boots and shoes, n. e. s percent.. 

Brass, manufactures of, n. e. s do 

Coal, short ton do 

Cotton fabrics, printed, dyed, or colored, n. o. p. . .do 

Cotton clothing, including corsets do 

Cotton velvets, velveteens, and plush fabrics, n. e. s. 
per cent. . 

Drugs, dyes, and chemicals, n. o. p do 

Electric apparatus, parts of;. electric-Ught cables, elec- 
tric batteries per cent. . 

Fancy goods: 

Braids, cords, laces, nettings, etc ..... do 

Glass, window do 

Hats, caps, and bonnets, n. e. s do 

Iron and steel: 

Cast-iron pi^e (ton) 

Hand and machine tools ....... .per cent . . 

Hardware do 

Iron in pigs (ton) 

Machinerj^ all other, of iron or steel, n. e. s. . .per cent. . 

Manufactured articles not specially enumerated or 
provided for, of iron and steel, etc per cent i . . 

Paper, manufactures of do 

Wool, manufactures of: 

Cloths, coatings, tweeds 

All fabrics composed wholly or in part of wool, worsted, 
etc., n. e. s ' per cent.. 

Clothing, ready-made, and wearing apparel of wool, 
wholly or in part 

Carpets: 

'Brussels tapestry etc per cent. . 



Act of 
1894. 



25 
30 
60 
30 
32i 

30 
20 

25 

30 
20 
30 

(1) 
32i-3o 

■ 321 

Si 
271 

271 
35 



General 
tariff, 
act of 
1897. 



Recipro- 
cal tarifT, 
act of 1897 
(12^ per 
cent). 



25 
30 ! 
53 
35 
35 

30 
20 

25 



21i 
261 
461 
30| 
30| 

261 
17^ 

21i 



35 1 30| 

20 j 17* 

30 281 



(?) 



30 



SB 
30 
30 J 
$2.50 
25 

30 
35 



35 



$7 

261 

261 

$2.19 

21| 

261 



30| 



301 



Preferen- 
tial tariff, 
act of 1898 
(25 per 
cent). 



18i 
22i 

39f 
26i 
26i 

22i 
15 

18i 

26i 
15 
22^ 

16 

22i 
22i 

$1.88 
181 

22i 
26i 



26i 
26i 



1 SIO but not less than 35 per cent. 
3 5 cents per pound and 25 per cent. 
8 5 cents per pound and 30 per cent. 

Note. — N. e. s. means "not elsewhere specified" in the tariff; n. o. p., ''not otherwise provided for." 

The conservative opposition had charged that on many articles 
the preferential reduction was fictitious since the rates of duty were 
raised before the reductions were made. Table 1 shows that on 
many items the general rates under the act of 1897 represented an 
increase of duty. On the other hand, the rates actually effective on 
British imports, in almost every case under the reciprocal tariff and 
in every case here cited under the preferential tariff, were appre- 
ciably lower than the rates levied under the customs act of 1894,. 
It is to be noted also that where British exporters met competition 
mainly from foreign exporters any increase in the general rate 
meant an increase in the absolute amount of tariff advantage enjoyed 
by the British as compared with the foreign exporter to Canada. 
On the other hand, where the British exporter met with important 
competition only from the Canadian manufacturer (as was the case 
almost wholly with woolens and to a large extent with cottons) the 
increase in the general rates in 1897, where such were made, operated 
unfavorably for him. 

THE PREFERENTIAL TARIFF, 1898-1902. 



Once in effect, the preferential tariff became an established feature 
of the Canadian fiscal system. It was popular throughout the 
country, and such opposition to it as made its appearance was half- 



670 COLONIAL TAEIFF POLICIES. 

hearted and was directed at special features of it rather than at the 
entire provision. In one respect, however, there continued to be a 
sharp difference in policy between the two parties with regard to 
preference. The Liberal Government refused to press the Imperial 
Government for a tariff preference to Canadian products and refused 
to make the grant of the Canadian preference conditional upon the 
establishment of a reciprocal preference in Great Britain. This phase 
of its policy met with sharp criticism from the Conservative opposi- 
tion, who were anxious to have the Canadian preference used as a 
means of forcing reciprocal preference. 

PREFERENCE INCREASED, 1900. 

In 1900 the preference was increased to 33 J per cent. The in- 
crease was criticized by the Conservatives on the grounds that it 
endangered the prosperity of some domestic industries and that it 
would render even more difficult the attainment of reciprocal prefer- 
ence. A resolution submitted by the Government expressing ap- 
proval of the British preference as beneficial to Canada and to im- 
perial unity was opposed by the Conservatives and was carried by a 
strictly party vote.^-^ 

In the budget debate of 1901 the opposition again urged the Gov- 
ernment to take steps to secure reciprocal preference, and in response 
the Liberals again insisted that reciprocal preference was at the time 
impossible of attainment until the Canadian customs barrier against 
Great Britain was removed. 

CANADA AT THE COLONIAL CONFERENCE, LONDON, 1902. ^^ 

At the colonial conference held in London, 1902, Joseph Chamber- 
lain, at that time the colonial secretary, advanced the view that on 
account of the high duties on imports from Great Britain the results 
of the Canadian preference had been disappointing. ''So long," he 
declared, ''as a preferential tariff, even a munificent preference, is 
still sufficiently protective to exclude us altogether, or nearly so, from 
your markets, it is no satisfaction to us that you have imposed even 
greater disability upon the same goods if they come from foreign 
markets, especially if the articles in which the foreigners are inter- 
ested come in under more favorable conditions." ^^ 

Sir Wilfrid Laurier, in rebuttal, submitted on behalf of his Govern- 
ment a memorandum purporting to show that the Canadian prefer- 
ence had been of substantial value to the mother country, that it had 
arrested the decline in the volume of British imports into Canada 
which had been a striking feature from 1887 to 1897, and that as a 
result of the preference the decline had been replaced by a steady and 
considerable increase. The memorandum disclosed that the Canadian 
Government had been attacked by Canadian manufacturers, and 
especially by the manufacturers of woolens, on the ground that the 
preference was seriously interfering with their trade, and put forth 
the claim that American manufacturers had found it necessary to 
reduce their prices to Canadian importers in order to meet British 
competition under the preference. It ended with the following 

'* House of Commons Debates, Mar. 21, 1900, p. 2344. 

^'' See p. 646. 

10 Qt. Brit. Pari. Papers, 1902, Cd. 1299, p. 8. 



CAIv^ADA. 671 

summary of the Canadian claims in regard to the operation of the 
preference : 

(1) That the preference is a very substantial one. 

(2) That it gives British merchants a material advantage over foreign competitors 
in the Canadian markets. 

(3) That the preferential rates are not too high to shut out reasonable competition 
with the Canadian producer. 

(4) That the preference has resulted, not only in arresting the continuous decline 
in British trade, but in stimulating the trade. If it had not been granted, it is not 
very likely that the volume of British imports into Canada would be as large as it is 
to-da3% to say the least. 

(5) That the advantage given by Canada to the British manufacturer is proved 
beyond question. If he has not fully availed himself of it, that is not the fault of 
the Canadian Government or of Canadian fiscal policy. ^^ 

The Canadian representatives subscribed to the general resolutions 
adopted by the Conference. These supported the principle of intra- 
imperial preference, urged its adoption by Great Britain and by those 
colonies which had not as yet established such a policy, but acknowl- 
edged that the circumstances of the colonies made it impracticable 
to establish a system of intra-imperial free trade. ^^ 

CANADIAN CHANGE OF POLICY.^ 

Canadian preference had originally been granted as a free gift, and 
until 1902 ^^ the Liberal Government had repudiated all suggestions 
that it be given only in reciprocity for like concessions from the 
mother country, but at the conference in London in that year the 
Canadian ministers present put forth the claim, that in consideration 
of the substantial preference given by Canada to the products of the 
mother country, Canadian food products should be exempted in the 
United Kingdom from the duties recently imposed. They promised 
that if they could be assured that the Imperial Governm^ent would 
accept the principle of preferential trade generally, and especially 
if it would grant to the food products of Canada in the United King- 
dom exemptions from duties levied or thereafter imposed, they 
would endeavor to give to the British manufacturers some increased 
advantage in duties in the lines in which the competition came from 
foreign and not Canadian industries. 

The request of the Canadian ministers in London for a reciprocal 

E reference marked, therefore, a distinct change in the policy of the 
liberal Party with reference to preferential duties. This change in 
attitude may have been due in part to the pressure of public opinion 
in Canada. The Conservative Party had on every occasion urged 
the Government to press for a reciprocal preference, and there was 
undoubtedly considerable support, even within the ranks of the 
Liberal Party, for the proposal that Canada should press for 
reciprocity as soon as its attainment seemed practical. 

The imposition by the Imperial Government early in 1902 of the 
duty on imported grain and flour was, however, the factor which was 
most decisive in changing the position of the Liberal Government 
with regard to reciprocal preference, since a British preference on 
colonial grain would now mean taking off taxation in favor of the 

17 Gt. Brit., Pari. Papers, 1902, Cd. 1299, p. 125. 

18 See chapter on Growth of Preference in the British Empire, p. 646. 

19 See p. 666. 



672 COLONIAL TAEIFF POLICIES. 

colonies instead of putting on taxation in order to favor the 
colonies.^^ 

CANADLIX SURTAX OX GERMAN PRODUCTS. 

On April 16, 1903, Mr. Fielding, the Canadian minister of finance, 
announced to the House of Commons the failure of the negotiations 
recently undertaken to secure from Germany most-favored-nation 
treatment ^^ and the intention of the Government to introduce 
retaliatory legislation in the form of a surtax on imports from Ger- 
many. The surtax law came into effect on October 24, 1903. It 
read, in part, as follows: ^^ 

Articles which are the produce or manufacture of any foreign country which treats 
impoits from Canada less favorably than those from other countries may be subject 
to a surtax over and above the duties specified in schedule A to this act,-^ such surtax 
in every case to be one-third of the duty specified in the general tariff in the said 
schedule. 

Germany was not specifically mentioned in the act, but the appli- 
cation of the surtax was at the discretion of the minister of customs, 
and it was intended to apply, and was applied only, to German 
products. As a matter of fact, neither France nor Italy extended 
complete most-favored-nation treatment to Canada, and the products 
of both countries could have been subjected by the Government, 
without reference to Parliament, to the rates of the surtax. 

The tariff war with Germany lasted seven years, with loss to the 
trade of both countries. It was terminated only when Canada's 
adoption of an intermediate tariff and the proposed extension of the 
intermediate rates to European competitors with Germany appeared 
to threaten still further injury to German trade. In February, 1910, 
on Germany's initiative, negotiations were again entered into by the 
Canadian Government and the German consul general in Canada, and 
a provisional agreement was reached, whereby in return for the 
removal of the surtax by Canada, Germany granted the conventional 
rates of the German tariff on a list of the most important items of 
Canadian export to Germany. 

Mr. Fielding, when he reported to the House of Commons that the 
tariff war was at an end, pointed out that Germany >vas not given 
what she had been previously offered, most-favored-nation treatment, 
since the concessions extended to France under the French treaty of 
1907-1910 2* were withheld from her. The only concession made by 
Canada was the withdrawal of the surtax.^^ On the other hand, 
Germany withheld from Canada the privilege of the conventional 
rates on some commodities. 

The surtax on German imports had increased the relative tariff 
advantage enjoyed in Canada by those British goods which were 
subject to German competition. This was of considerable importance 
to British trade in refined sugar; woolens, silks, and other textiles; 
cutlery; and many minor items. 

20 House of Commons Debates, Apr. 16, 1903, p. 1400. 

21 See p. 649. 

22 III ed. vn, ch. 15. 

23 Dutiable list in the tariff law. 

^^ This treaty (ratified in 1910) granted France certain specified duties on a limited number of her prod- 
ucts. See p. 076. 
2^ House of Commons Debates, Feb. 6, 1900. 



CANADA. 673 

MOVEMENT IN CANADA FOR REVISION OF THE TARIFF, 1901-1907. 

The increase of the preference in 1900 to 33 J per cent aroused con- 
siderable opposition among the Canadian manufacturers, especially 
the manufacturers of woolens, as soon as its effects made themselves 
felt. They began to agitate for a revision of the tariff, and with their 
powerful organization, the Canadian Manufacturers' Association, to 
lead them, they were strong enough to force the Government to 
consider their demands. At the convention of 1901 the association 
had urged that certain minimum preferential rates, higher than the 
ones in force, be enacted on woolens. ^^ At the convention of the 
association held at Halifax in 1903 a resolution was passed declaring 
that the changed industrial conditions demanded an immediate and 
thorough revision of the tariff upward. The resolution also affirmed 
that while such a tariff should be framed primarily with a view to 
Canadian interests, ''it should nevertheless give a substantial prefer- 
ence to the mother country and also to any other part of the British 
Empire with which reciprocal preferential trade can be arranged, 
recognizing always that under any conditions the minimum tariff 
must afford adequate protection to all Canadian producers." ^^ 

CANADIAN PREFERENCE MODIFIED, 1904; PREFERENCE ON WOOLENS REDUCED. 

The growing intensity of the Chamberlain campaign and the 
agitation of the Canadian manufacturers for a revision of the tariff 
were causing the Canadian Government some uneasiness. In 1904 
the Government was forced by the increasing opposition to its tariff 
policy to come out in defense of its preferential policy, to make 
some amendments in the preferential schedule, and to forecast 
some others to be submitted later. Mr. Fielding, in his budget 
speech of 1904, referred to the Chamberlain campaign for '^tariff 
reform" in England, as follows: 

We may be influenced in our own preference policy by what may occur in the mother 
country in the hereafter. We shall claim a free hand in that respect, but for the pres- 
ent we think it is a wise policy to adhere to the preferential system in the hope that 
it may be adopted more generally throughout the Empire, and that by and by a 
better understanding may be come to in the mother country and that it will be 
adopted there as well. 

He advised that, while the question of preference remained a 
matter of party strife in Great Britain, Canada should take no fur- 
ther steps.^^ 

It was in this speech that Mr. Fielding announced the partial de- 
parture from the plan that had been originally adopted of granting 
a uniform reduction from the rates of the general tariff as a prefer- 
ence to British products. The Canadian manufacturers of woolens 
had complained bitterly that the British preference, and especially 
it& increase in 1900 to 33 § per cent, left the Canadian industry with- 
out adequate protection against British competition; that many 
mills had been forced to close and that others would follow unless 
relief was granted. In response to their complaints, Mr. Fielding 
raised the preferential rate on woolen cloths, tweeds, and wearing 
apparel from 23^ per cent to 30 per cent. The general rate continued 

»8 Porritt, E.: Quarterly Review, vol. 218, p. 180. 

*7 Porritt, E.: Sixty Years of Protection in Canada, p. 422. 

28 House of Commons Debates, June 7, 1904, pp. 4352 et seq. 



674 COLONIAL TARIFF POLICIES. 

at 35 per cent. In response to similar complaints from manufactur- 
ers of cordage, the preferential duty on cordage and twine, but not 
including binder twine nor materials for use in the fisheries, was 
raised from 13 f per cent to 20 per cent. On the other hand, to off- 
set these increases, several of the rates were reduced; the preferential 
rate on tableware of china, porcelain, etc., was lowered from 20 per 
cent to 15 per cent, making the preference 50 per cent of the general 
rate; the preferential rate on window glass was reduced from 13 J per 
cent to 7J per cent, making the preference on this item over 65 per 
cent; and molasses, on which the general rate was If cents per gal- 
lon, was put on the free list when imported from countries entitled 
to the preference, i, e., the British West Indies. 

While the manufacturers received the reduction of the preference 
on woolens with approval, they did not like the method used to in- 
crease the protection they received. The Canadian Manufacturers 
Association issued a statement in which they declared that the pro- 
tection to the woolen industry was still inadequate, and that it should 
have been increased, not by decreasing the amount of the preference, 
since ^^such action will probably be misinterpreted in England," 
but by raising both the general and the preferential duties, which 
would have maintained the principle of uniform preference for 
British goods.^^ 

RETISIOX OF TARIFF, 1906-7. 

>ylr. Fielding, in his budget speech of 1904, had suggested the 
desirability of enacting an intermediate tariff, lower than the general 
tariff, but not as low as the preferential tariff, to be used in bargain- 
ing with foreign countries for more favorable tariff treatment of 
Canadian products. He had also forecast the substitution of speci- 
fied preferential rates for the straight horizontal reduction from the 
general rates in order both to permit of special consideration of the 
needs of individual industries and to eliminate awkward fractional 
duties. 

In October, 1904, a general election was held in Canada. The 
Liberal platform included a tariff embodying three schedules (in 
addition to the surtax) — a maximum, a minimum, and an inter- 
mediate schedule. The preferential schedule was to be the minimum 
schedule. The intermediate schedule was to consist of rates approxi- 
mately equal to the rates of the existing general tariff, and the maxi- 
mum rates were to be somewhat higher. As the preferential duties 
would continue to be a stated percentage, 33J per cent, below the 
maximum duties, an increase in the maximum duties would result 
in an increase in the absolute amount of the British preference, but 
also an increase in the amount of protection against British products. 
The Liberals were again returned to power, and on November 29, 
1906, Mr. Fielding finally reported to the house a revised tariff con- 
taining a provision for an intermediate schedule. The general 
schedule was approximately the same as that of the old tariff, and 
the intermediate schedule consisted of duties from 2^ to 10 per cent 
ad valorem lower than the duties of the general schedule. 

The main significance, for a study of the preference, of the intro- 
duction of the intermediate schedule, lies in its indication that the 



Montague and Herbert: Canada and the Empire, p. 27. 



CANADA. 675 

GoYernment was disappointed at its failure to secure a preferential 
market for Canadian products in Great Britain, and had decided to 
look elsewhere for better markets for Canadian products. Where 
put into effect^ the intermediate tariff w^ould; of course; operate to 
reduce the amount of the British preference. 

On the same da}', Mr. Fielding announced a revision of the prefer- 
ence to British products. He declared that the Government had 
adopted the policy of preference because they believed it to be a good 
thing for Canada, that they intended to adhere to this policy^ and 
that, notwithstanding the strong criticisms which had been made, 
they were confident that it had had good results. He claimed for 
the preference that it had advertised Canada before the Empire and 
the world, that it had reduced the burden of the taxation on Canadian 
consumers, and that it had, to a considerable extent, governed the 
prices of articles sold in Canada by foreign countries. 

The revision of the preference took the form of the abandonment of 
the horizontal reduction from the rates of the general tariff and the 
substitution in its place of a preferential schedule of specified duties. 
The awkward fractional duties were eliminated, and this involved in 
some cases slight increases, in other cases slight decreases, of the 
preferential duties. In the case of a number of minor items, transfer 
to the general free list altogether eliminated the preference. In the 
case of manufactures of metals, most of the new preferential rates 
represented m^ore than a third reduction from the rates of the general 
schedule. In addition, there was established an ^'Empire free list," 
consisting of a number of commodities which previously had come 
in free from all countries, but now were to be subjected to a small duty, 
generally 5 per cent ad valorem, when imported from countries not 
entitled to the preference. Most important among these items were 
Canada plates, various intermediate iron and steel products, and 
celluloid in the rough. Mr. Fielding claimed that on the v/hole the 
revision had resulted in an increase in the preference. 

In 1907 a further revision of the preferential provisions carried 
into the tariff act all the regulations which Orders in Council had 
made with reference to the preference. The list of colonies entitled 
to the preference, although subject to removals or additions by Order 
in Comicil, was given in the act. The list included, in addition to 
Great Britain, from whom the preference could not be v/ithdrawn 
without special legislation, the following colonies: Bermuda, the Brit- 
ish West Indies, British Guiana, India, Ceylon, Straits Settlements, 
New Zealand, and British South Africa. The preference to the two 
last named had been extended in 1904 in return for reciprocal 
preferences on Canadian products in those colonies. ^*^ 

IV. Canadian Tariff Policy, 1907-1911. 

The failure to secure reciprocal preference from Great Britain, the 
continued dominance in England of the free- trade party, and the 
growing pressure of the Canadian manufacturers against the prefer- 
ence and for an increase in the tariff considerably lessened the vigor 
with which the Liberal Party presented the preferential policy. In 
1906, as has been shown, they had introduced an intermediate tariff, 

20 See infra, pp. 767 and 762. 



676 COLONIAL TARIFF POLICIES. 

which, if put into effect, would reduce the amount of the British 
preference. The following years, until the defeat of the Liberals in 
1911, were marked by negotiations with foreign countries for better 
commercial relations, by the repeal of the German surtax, and espe- 
cially by an attempt to find in the United States, through reciprocity, 
the favored market for Canadian exports which was not obtainable 
in Great Britain. 

THE PREFEREXCE MOVEMENT IN CANADA, 1907-1910. 

After the failure of the colonial conference of 1907 to persuade the 
British Government to establish tariff preferences on colonial prod- 
ucts,^^ the Liberal Government took no further steps to press the 
policy of reciprocal preference upon the mother country. The 
Conservatives, on the other hand, adhered to their former position 
that Canada should use the preference as a means of securing reci- 
procity from Great Britain. The fiscal issue continued to play an 
important part at this time in the domestic politics of the United 
Kingdom, and the Canadian Government was reluctant to take any 
action which might appear to be an attempt to influence public 
opinion in England in favor of a particular political party. The 
Conservative Party, however, criticised this attitude, and claimed 
that it was the duty of the Government not to play the part of a 
disinterested spectator in the controversy with whose outcome 
Canada was so vitally concerned. In the 1907 convention of tha 
Conservative Party held at Halifax, a resolution was passed urging 
that Canada should endeavor, by negotiation, argument, and every 
legitimate means, to bring about the success in Great Britain of the 
movement for imperial preference. In the following year the Con- 
servative leaders urged such action both in Parliament and from the 
public platform. The Government stood firm, however, and refused 
to change its policy. 

THE PREFERENCE IMPAIRED BY CONCESSIONS TO OTHER COUNTRIES, 

1910. ^2 

CONCESSIONS TO FRANCE. 

The failure to secure a preference for Canadian products in the 
British market led the Canadian Government to take active measures 
toward the extension of the market for Canadian products in foreign 
countries. The enactment in 1 907 of an intermediate tariff facilitated 
negotiations with foreign countries, and in the same year Mr. Fielding 
and Mr. L. P. Brodeur, the minister of marine and fisheries, negotiated 
an important treaty mth France. The treaty accorded rates of 
duty lower than the general rates of the Canadian tariff on a long list 
of important French products, including silks, ribbons, laces and 
embroideries, velvets of cotton and silk, braids and cords, curtains, 
cotton clothing, gloves and mitts, buttons, jewelry, brushes, wines, 
drugs, soap, perfumes, and olive oil. In most cases the rates con- 
ceded to France were those specified in the intermediate tariff; in 
some cases, special rates between the rates of the intermediate and 

8'- See ch. 12, p. 653. 

32 The first reduction of duties put in force in 1910 was fche removal of the surtax on German products, 
mentioned on p. G72. 



CAl^ADA. 677 

the preferential tariffs were granted; in the case of drugs and some 
wines, rates even lower than those specified in the existing prefer- 
ential tariff were given to France, but these rates were incorporated 
in the preferential tariff as soon as they became effective on imports 
from France. In return for her concessions, Canada received from 
France, in addition to the minimum rates already enjoyed under 
the Franco-Canadian convention of 1893, the French minimum rates 
on a long list of important Canadian products, including live cattle, 
fresh canned meats, dairy products, fish, lumber and pulp, agricul- 
tural implements, typewriters, various other manufactures of iron 
and steel, furniture, boots and shoes, asbestos products, and cement. 
Owing to opposition in France, the treaty was not ratified until 
1910. It was urged in France against the treaty that the Canadian 
concessions were of little value, since they would be enjoyed, as 
most-favored-nation countries, by most of France's European 
competitors; that Canadian competition under the lower duties 
might prove dangerous to French industries; and, more important, 
that the importation into France of Canadian cattle at the lower 
rate of duty v/ould offer serious competition to cattle growing in 
France. The latter objection was removed, however, by the con- 
clusion in 1909 of a supplementary convention which modified the 
convention of 1907 by providing that Canadian cattle might be 
imported into France under the minimum rates of the tariff only 
when not fattened and in condition for slaughter. In Canada there 
was little or no opposition to the treaty, as the French products to 
be admitted at reduced rates were, with few exceptions, not produced 
to any extent in Canada. The treaty was ratified and legislation 
to put it into effect in Canada was enacted, after some of the pro- 
visions of the treaty had undergone revision, and. the rates specified 
in the treaty came into effect in May, 1910. These rates were ex- 
tended at once to all countries having most-favored-nation treaties 
with Great Britain to which Canada had become a party either through 
the action of the Imperial Government or by her owoi consent.-''^ 

INTERMEDIATE RATES GRANTED TO BELGIUM AND THE NETHERLANDS. 1910,. 

In the case of imports of French products into Canada, the privilege 
of the treaty rates was conditional upon importation without trans- 
shipment from a French port, or from a port of a country enjoying 
either the preferential or the intermediate tariff, into a sea or river 
port of Canada. Belgium and the Netherlands did not have treaties 
entitling them to most-favored-nation treatment in Canada. Their 
important transit trade made this provision in the French treaty 
penalizing indirect shipment of considerable importance to them, 
and their consular representatives at once opened negotiations with 
the Canadian Government to secure some modification of the Canadian 
discrimination against their ports and their products. As both 
Belgium and the Netherlands admitted Canadian products at their 
lowest rates of duty and their tariff was in general a low one, the 
Canadian Government was favorably disposed towards their requests 
and by Orders in Council of June 7, 1910, the articles specified in the 

33 The countries entitled at that time to most-favored-nation treatment were Argentina, Austria- 
Hungary, Bolivia, Colombia, Denmark, Japan, Norway, Russia, Spain, Sweden, Switzerland, and 
Venezuela. 



678 COLONIAL TAEIFF POLICIES. 

French treaty were admitted at the intermediate rates when imported 
from these countries. The grant of special rates would have required 
new legislation, but this concession made it possible to transship 
French products through the ports of Belgium and the Netherlands 
without making them subject to higher rates of duty than those 
specified in the French treaty. 

CONCESSIONS TO ITALY, 1910. 

Italian products were not entitled to most-favored-nation treat- 
ment in Canada, and Canadian products were subject to the maximum 
tariff rates in Italy. By a provisional agreement between Canada 
and Italy signed on June 6, 1910, a limited number of Italian prod- 
ucts were granted the intermediate rates of the Canadian tariff in 
return for the extension of the Italian conventional rates to a number 
of Canadian products. Most important among the Italian products 
specified in the agreement were wines, velvet and silk fabrics, ribbons, 
fine kid gloves, miscellaneous manufactures of silk, and macaroni and 
vermicelli. 

REDUCTION OF RATES IN GENERAL TARIFF GRANTED TO THE UNITED STATES, 1910. 

In 1909 the United States had adopted the Payne-Aldrich tariff 
law, with its provisions for a maximum schedule of duties to be applied 
to all countries found to be discriminating unduly against American 
commerce. These rates amounted to a penalty duty of 25 per cent 
ad valorem., to be added to the regular duties on all goods in the 
dutiable list. In order to avert the necessity of applying these rates 
to Canadian products. President Taft, early in 1910, sent commercial 
representatives to Canada to urge the grant to the United States of 
most-favored-nation treatment. The American representatives made 
no protest against the British preference; the tariff arrangements of 
the Empire were regarded as a domestic matter, with which foreign 
countries were not concerned. They requested, however, that 
American products should be given as favorable treatment as was 
accorded to the products of any foreign country, and they asked, in 
particular, that the concessions granted to France in the treaty soon 
to come into effect should be extended to the United States also. 
After negotiations of some duration, in which President Taft engaged 
in person, it was agreed that the United States should refrain from 
imposing the maximum duties on Canadian products in return for 
the extension by Canada of the intermediate rates on 13 specified 
articles when imported from the United States. It was also under- 
stood between the parties to the negotiations that this arrangement 
was to be the preliminary to the negotiation of a commercial treaty 
broader in scope and involving reciprocal concessions of greater im- 
portance. The Canadian intermediate rates on the articles speci- 
fied in the arrangement were put into application on American 
products by Order in Council on March 31, 1910, but they were ex- 
tended at the same time to all countries entitled to most-favored- 
nation treatment in Canada.^^ 

8< Cf. Report of U. S. Tariff Commission on Reciprocity and Commercial Treaties,pp. 369 et seq. 



CANADA. 



679 



EFFECT OF CONCESSIONS ON BRITISH PREFEHENCE. 

These negotiations and conventions with foreign countries resulted 
in a significant impairment of the British preference. Table 2 
presents, for a number of the articles specified in the French treaty, 
the rates of duty and the amounts of import in the fiscal year 1910 
from Great Britain and from the countries enjoying the reduced 
rates. 

Table 2. — Rates of duty on, and imports of, selected articles S'pecijied in Franco- Canadian 

Convention of 1907 {1910). 





Article. 


Rate of duty. 


Imports entered for con- 
sumption, fiscal year 
ending Mar. 31, 1910. 


Tar- 
iff 
No. 


Gen- 
eral 
tariff. 


Prefer- 
ential 
tariff. 


Inter- 
mediate 
tariff. 


Special 
treaty 
rate. 


Total. 


From 

Great 
Britain. 


From 
coun- 
tries 
enjoy- 
ing in- 
terme- 
diate or 
special 
rates. 




P 


5r cent a 


1 valorem 


Tl. 


(In thousands of dollars.) 


■ 23 
120 
232 


Cocoa or chocolate, preparations of, 
n. 0. p.i 

Anchovies, sardines, etc., in tin boxes, 

8 ounces or less in box, per box 

Glue, inucila°'e, etc. . . 


35 

121 

27| 

30 

271 

20 

35 

30 

35 

371 

35 

30 

35 

35 

271 

35 


221 

Hi 

17i 
. 15 
15 
12i 

25 

17i 

221 
30 

221 


32i 

12 

25 

27i 

25 

19J 

321 

27i 

3a 

30 

271 

30 

30 

25 

32i 


Yil' 
I 27J 

[■■■■■■ 

\ 20 
25 
321 


153 

216 
346 

1, 269 
178 

1, 140 

3,680 

1,078 

478 

4, 732 
1,575 

166 
1,91G 

227 
1, 337 

566 

360 

626 


101 

65 
128 
919 
115 

800 

2,110 

585 

400 

2, 068 
655 
103 
805 

96 
255 
109 

45 

348 


42 

135 
49 


287 
321 


Tableware of china, porcelain, etc 

Plate glass, not beveled ... 


187 

61 


526 
575 

575 


Lace, cotton, white and cream-colored 
Braids, fringes, cords, n. o.p.; elastic; 
handkerchiefs of all lands; shams 
and curtains; cotton clothing, n. o. v. 
Embroideries, n. o. p.; lace, n. o. p7; 
manufactures of lace; nets and net- 
ting of any material, n o.p 


210 
311 

249 


681 


Velvets, velveteens, and plusli fabrics, 
nop. cotton 


34 


581 
582 
583 
627 


Velvets of pure silk and silk fabrics 

Ribbons of all kinds and materials 

Manufactures of silk, n . o. p 


1,984 

766 

34 

641 


630 


Boot, shoe, and stay laces 


97 


647 
651 
653 


Jewelry, n. o. p 

Buttons of all kinds, n. o. p 

Brushes of all kinds 


98 
124 
111 


656 


Tobacco pipes and other smokers' 
articles „ . 


197 




Total 






! 






20, 045 


9,704 


5,329 






"'- ! i 







1 N. 0. p. means "not otherwise provided for" elsewhere in the tariff. 

Only such commodities are included in this list as were subject to 
considerable competition between the British and the European pro- 
ducers. On lace and embroideries, nets and nettings, velvets and 
fabrics of silk, ribbons, and miscellaneous manufactures of silk, the 
preference was almost wholly eliminated. On the other items in the 
table there were in each case reductions of from 2h to 5 per cent ad 
valorem in the amount of the efi^ective preference. ^-^ 



35 The provisions of the various agreements are given in U. S. Department of Commerce and Labor: 
Tariff Series No. 26, Tariff Relations of Canada. 



680 COLONIAL TARIFF POLICIES. 

The arrangement with the United States hkewise effected a reduc* 
tion in the preference to British products. In every case, however, 
the intermediate rates which were extended to the United States w^ere 
lower than the general rates by either 2| per cent ad valorem or by 
correspondingly small specific amounts. The only articles included 
in the 13 items specified in the tariff with reference to which there 
was any substantial competition between British and foreign goods 
were photographs, pictures, engravings, etc.; miscellaneous dressed 
leathers; artificial feathers, flowers, etc.; and miscellaneous drugs, 
dyes, and chemicals. The total imports into Canada of the items 
specified amounted annually to about $10,000,000 from all countries 
and $2,700,000 from the United Kingdom, but in only the instances 
named above were there substantial imports from both the United 
Kingdom and foreign countries. The concessions to the United 
States are of significance in this study, not because of any material 
effect they could have had on the direction of trade, but as a further 
indication of the v/illingness of the Canadian Government to pare 
down the British preference if trade advantages in foreign markets 
could be secured thereby. ^^ 

AGREEMENT NEGOTIATED "V^^ITH THE UNITED STATES, 1911, 

The arrangement of March 26, 1910, between the United States 
and Canada was understood by the representatives of both countries 
to be but the preliminary for the negotiation of a much broader and 
more comprehensive commercial arrangement. Negotiations for 
such an arrangement were resumed in November at Ottawa and were 
concluded at Washington in January, 1911. The agreement which 
resulted provided for the reciprocal free admission or for the admis- 
sion into both countries at considerably reduced rates of duty of a 
number of manufactured products.^^ 

The proposed changes in the general tariff rates were listed in four 
schedules. Schedule A covered the articles which were to be made 
duty free in both countries. It consisted chiefly of natural products, 
but it included also galvanized iron and steel sheets, galvanized wire 
and wire rods of certain gauges, barbed-fencing wire, cream separa- 
tors, carbon electrodes, typesetting and typecasting machinery, coke, 
and cotton-seed oil. 

Schedule B listed the articles which were to be admitted into each 
country from the other at the same rates of duty, rates generally 
lower than those then in force on both countries. Many of the items 
were secondary products and manufactures of which the chief com- 
ponent materials were made free in schedule A. Of importance 
among these, with special reference to British trade, were barley, 
malt, biscuits, and fruit juices. This schedule included also agri- 

36 An editorial of June 24, 1910, in the Toronto Globe (generally recognized as the mouthpiece of the 
Liberal Party), contained the following statement: As soon as France, Germany, and Belgium showed 
that they appreciated the Canadian market and became ^N-illing to make concesssions in order to get into 
it on favorable terms, it was easy to negotiate trade treaties. The reluctance and hesitation, if there were 
any, were not on the side of Canada. Great Britain is the only country from which we are not asking 
and expecting trade concessions, and the British preference is valued by thoughtful Canadians chiefly 
because it is a measure of freer trade. British goods coming in under the preference force down the prices 
of competing goods brought in from foreign countries. 

3. For a full account of the negotiations and an analysis of the agreement which resulted, see the report 
of the United States Tariff Commission on Reciprocity with Canada; a study of the arrangement of 1911, 
or that on Reciprocity and Commercial Treaties, pp. 363 et seq. Much of the following account is based 
on the latter report. 



CANADA. 681 

cultural implements and machinery, monumental and building stone, 
cutlery and plated ware, clocks and watches, motor vehicles, and 
bathroom fixtures. 

Schedule C listed six articles which were to be admitted at reduced 
rates by the United States: Aluminum, laths, shingles, planed or 
finished lumber, iron ore, and coal slack. 

Schedule D contained seven articles which Canada was to admit 
at reduced rates: Cement, fruit trees, condensed milk, unsweetened 
biscuits, canned fruits, peanuts, and bituminous coal. 

Except for the articles included in schedule A, the stipulated reduc- 
tions of duty were moderate, averaging approximately 8 per cent 
ad valorem on the part of the United States, and a little more than 
4 per cent on the part of Canada, reductions which in each case left 
protection practically unimpaired. The Canadian concessions were 
to be extended to all the countries having favored-nation rights in 
Canada and to all the portions of the British Empire which enjoyed 
preferential treatment in the Canadian market. To the American 
representatives the scope of the arrangement was a disappointment. 
They had hoped to secure much more extensive concessions, but the 
Canadian representatives were unwilling to take away the tariff pro- 
tection from manufactured articles. 

Upon the whole the Canadian duties fixed in the agreement corre- 
sponded closely with the rates of the Canadian intermediate tariff 
of 1907. The prime object of the conferees was to arrange for the 
admission to the United States of Canadian agricultural produce, 
fish, and raw materials. Having settled upon this, the conferees 
took the Canadian intermediate tariff and selected from it certain 
items which the United States exported in considerable quantities 
and upon which the American members asked for the lowest rates 
possible. But upon nearly all of these the Canadians would consider 
no reductions below the terms of the intermediate tariff. The only 
important exceptions were cotton-seed oil, galvanized or tinned sheets, 
and typesetting and typecasting machines, all of which were added 
to the free list. Considering the nature of the articles and the very 
small difference between the proposed rates and the old, it is difficult 
to see how the export of American manufactures could have been 
materially affected. 

THE FAILURE OF THE AGREEMENT. 

The agreement was to come into effect through concurrent legis- 
lation in the two countries. Legislation to carry the arrangement 
into effect was introduced on January 26, 1911, in the House of Com- 
mons in Canada and in the House of Representatives in the United 
States. In the United States the bill was finally passed and ap- 
proved on July 26, 1911, after a special session had been called for 
the purpose. 

In Canada the project was rejected. Of the arguments with which 
it was opposed, only those which are specially concerned with the 
commercial relations of Canada with the Empire need be considered 
here. It was urged by the opponents to reciprocity that the agree- 
ment would impair the preference to British products. But Mr, 
Fielding, in introducing the reciprocity proposals in the House of 
Commons, declared that 'Hhe British preference never entered into 



682 COLONIAL TAEIFF POLICIES. 

these negotiations, and * * * we never discussed with our 
American bretln-en what the British preference should be.'^ He 
asserted that Canada was left free by the arrangement to do what it 
pleased with the British preference. Furthermore, the British 
preference would not be seriously affected by reciprocity with the 
United States. Most of the reductions stipulated in the arrange- 
ment, he pointed out, were of a kind in respect to which there was no 
serious competition with the United States. Moreover, any con- 
cession which was granted to the United States was to be gra.nted 
also to Great Britain and other countries. ^^ 

Opposition to reciprocity was engendered by the consideration that 
it would expose the Canadian producers of the articles specified in 
the arrangement to keener competition not only from American 
exporters but from British exporters of manufactures and Australian 
and New Zealand exporters of such commodities as wheat, meats, 
butter, and cheese. The agitation for increased preference brought 
to these critics the support of all those who feared British compe- 
tition under lower tariff rates in other commodities. 

It was urged also, in opposition to reciprocity, that ^^ tariff reform '' 
would soon be the issue in a British general election, and that in the 
event of the success of the tariff reform party, the establishment of 
reciprocity with the United States would prove a. barrier to the 
achievement of reciprocal preference. The actual growth of exports 
to free- trade Great Britain and the promise which was held out of 
even greater growth when Great Britain should adopt protection and 
preference to the colonies were used to minimize the value to Canadian 
exporters of a freer American market. But a statement early in 
1910 by Mr. A. J. Balfour to the effect that there was a divergence of 
opinion between members of the tariff reform party as to whether 
colonial wheat should be admitted into Great Britain free and other 
wheat subject to a small tax, and that he had reached the conclusion 
that all wheat should be imported free, enabled the supporters of 
reciprocity to reply that there weve no prospects, even with a '^tariff 
reform ^^ victory in England, of a British preference valuable enough 
to counterbalance the American offer. Moreover, it was pointed 
out that the scheme of imperial preference was not necessarily 
inconsistent with the retention by each portion of the Empire of the 
freedom to enter into special arrangements with foreign countries, 
provided only that the remain-der of the Empire should share in the 
benefits of such arrangements. 

An objection, raised especially in England but effective also in 
Canada, to the reciprocity proposal was that it would confer on one 
part of the Empire, Canada, benefits in a foreign market which were 
not enjoyed by the remainder of the Empire. About $15,000,000 of 
annual imports into the United States from the United Kingdom 
would be affected hj the agreement. But, on the other hand, the 
United Kingdom enjoyed tariff advantages in France, Italy, and 
Germany, and even in Australia, which were not shared by Canada, 
and in 1891 had sanctioned concessions in the British West Indies to 
American products without requiring their extension to British 
Colonies. 

38 House of Commons Debates, Jan. 26, 1911, pp. 2464 et seq. See also, Reciprocity with Canada: United 
States Tariff Commission, 1920, p. 57. 



CAITADA. 



683 



DEFEAT OF THE LIBERAL GOVERNMENT, 1911. 

The Liberal Government was forced by the Conservative opposi- 
tion in Parliament to appeal to the electorate for sanction for its 
reciprocity policy, and in the election of September 21, 1911, which 
ended a campaign of unprecedented bitterness, they were defeated 
by the opponents of reciprocity.^^ Political arguments played a 
large part in the defeat of reciprocity, but with these, in so far as they 
related only to Canada and the United States, this study is not con- 
cerned. But significant and perhaps even dominant factors in the 
defeat of reciprocity were Canadian resentment at the rejection by 
the United States of former proposals of reciprocity and the appre- 
hension that closer trade relations with the United States would 
injure commerce v/ithin the Empire, m.ight operate as a hindrance to 
the development of the policies of imperial preference and imperial 
federation, and might even lead, through economic pressure by the 
United States, to forced annexation. The defeat of reciprocity was 
generally interpreted both in Canada and in Great Britain as a victory 
for the advocates of imperial preference. 

Table 3 indicates to how slight an extent British commerce with 
Canada would have been affected if the reciprocity arrangement had 
come into effect: 



Table 



-Imports info Canada of articles specijied in the reciprocity arrangement with 
the United States, fiscal year ending March 31, 1910.^ 



, 


Articles reciprocally 
free (A). 


Reciprocal 
reductions 
in duty (B). 


other re- 
ductions in 
duty (D). 


Total 
imports 
covered by 
arrange- 
ment. 


Total 
imports. 


Item. 


other than 
wood pulp 
and paper. 


Wood 

pulp and 

paper. 


Imports into Canada from — 
United States 


$9,163,176 

4, 190, 425 

134, 625 

165, 254 

241, 413 


$554,306 

7,302 

58 

44,418 

24, 766 


$11,448,069 

1,949,054 

122, 256 

560, 441 

391, 970 


$11,748,272 

247, 857 

33, 571 

19, 876 

25, 076 


$32,913,823 

6,394,638 

290, 510 

789, 989 

683, 225 


$223, 501, 809 


Great Britain 


95,350,300 
16, 448, 117 
10,275,506 
30,257,284 


British colonies .... 

Most-favored nations. . . 
other countries 


Total ..... 


13,894,893 
66 


630,850 

88 


14,471,790 

79 


12,074,652 
97 


41,072,185 
80 


375,833 016 


Per cent from the United 
States 


59 






Proposed reduction in 
duties: 
United States 


$1,295,611 
62, 829 
29, 212 
24, 567 


1147,660 
1,629 


$571,010 

5,024 

21,414 

890 


$497,142 


$2,511,423 
69, 382 




Great Britain 






18 
107 


50,644 
32,146 




Most-favored nations 


6,582 








Total 


1,412,219 
92 


155,771 
95 


598,338 
• 
95 


497,267 
100 


2,663,595 
94 




Per cent of total reduction 
affecting the United 
States 











1 Table taken from U. S. Department of Commerce and Labor, TariS Series, No. 28, Tarifi Relations of 

Canada, p 'yZ. 



Of the total imports into Canada from the United Kingdom in the 
fiscal year 1910 amounting to $95,350,300, only $6,394,638, or 6.7 
per cent of the total, would have been affected by the arrangement; 



2'-' See p. 681. 

185766°— 22- 



684 COLONIAL TAEIFF POLICIES. 

and for only a part of this 6.7 per cent, although, the larger part (all 
under schedule A, and some under schedules B and D), would the 
preference have been wholly eliminated. 

THE SIGNIFICANCE FOR THE PREFERENCE MOVEMENT OF THE DEFEAT OF RECIPROCITY. 

The defeat of reciprocity had considerable significance for the 
movement for imperial preference aside from the fact, which has 
already been dwelt upon, that the establishment of reciprocity would 
have resulted in an impairment of the existing Canadian preference 
to British products. All those, both in Canada and in Great Britain, 
who were advocates of the idea of closer union between the com- 
ponent parts of the British Empire saw in reciprocity with the United 
States a severe reverse to the preferential- tariff policy. To them it 
appeared that Canada's acceptance of reciprocity would be a clear 
afnrmation that she had given up hope of securing a favored market 
for her products in Great Britain and had decided to accept as a 
substitute the American offer of an enlarged market in the United 
States. They predicted, moreover, that a general weakening of the 
imperial connection would result from the acceptance of closer 
commercial relations with the United States, and that dependence 
on the American market would bring for Canada political dependence 
also. 

Some American advocates of reciprocity declared that the reci- 
procity proposals were not intended to forestall the closer union of 
the Empire, whether commercially or politically, and Mr, Payne, 
the chairman of the House Committee on Ways and Means, had 
described the Canadian preferential schedule as ^'an arrangement 
within the family, to which no exception could be taken.'' But 
statements different in import had also been made by American 
statesmen, and in particular a statement of President Taft, naade 
in 1911, was widely quoted in Canada as evidence that the reciprocity 
proposals were intended to destroy the scheme of reciprocal prefer- 
ential trade within the Empire. ^*^ 

The Liberals denied that reciprocity would adversely affect the 
preferential policy, and on the part of the Liberal press v/hich favored 
reciprocity the extension of British preference was advocated as a 
natural corollary to the reciprocity agreement. The defeat of the 
reciprocity proposal, however, was generally accepted as a favorable 
omen for the preferential policy. The Conservative leaders who 
visited England after the rejection of reciprocity v^^ere enthusiastically 
received- and the Canadian proponents of reciprocal preference were 
jubilant at its defeat. The campaign for reciprocal preference was 
once more brought to life by the defeat of reciprocity. 

*o This statement- of President Taft's was as follows: ''I have said that this was a critical time in the 
solution of the question of reciprocity. It is critical because unless it is now decided favorably to reciprocity 
it is exceedingly probable that no such opportunity will ever again come to the United States. The forces 
which are at work in England and Canada to separate her by a Chinese wall from the United States and to 
make her part of an imperial commercial band, reaching from England around the world to England 
again, by a system of preferential tariffs, will derive an impetus from the rejection of this treaty, and if 
we v/ould have reciprocity with all the advantages that I have described, and that I earnestly and sincerely 
believe will follow its adoption, we must take it now or give it up forever." Reported in Curient Litera- 
ture, June, 1911, p. 582. 



CANADA. 685 

V. The Preferential Policy in Canada, 1911-1921. 

THE CONSERVATIVE GOVERNMENT AND THE PREFERENCE, 1911-1914. 

The Conservatives, on their accession to power, in 1911, announced 
that the Canadian tariff was to be examined by a newly appointed 
tariff commission, and that until it had made its report no change 
in the tariff was to be expected. The commission had not yet sub- 
mitted its report at the outbreak of the war, and in the meantime 
there was no change of any importance in the tariff. 

In 1912 a reciprocal preference agreement was concluded with cer- 
tain of the British West Indies. In return for a preference to Cana- 
dian products in the West Indian colonies, Canada agreed to grant 
a preference of not less than 20 per cent on a number of specified 
products of the ¥/est Indies, including sugar, cocoa, and lime juice. 
In order to carry out this agreement it was necessary for Canada to 
establish duties on imports of raw cocoa and of lime juice v/hen 
coming from foreign countries, and to cancel the privilege to sugar 
refiners which had been granted in 1909 by the Liberal Government, 
of importing foreign raw sugar at the rates of the preferential tariff to 
an amount equal to 20 per cent of their production of refined sugar. 
As the British West Indies had been granted in 1898 the preferential 
rates of the Canadian tariff', amounting to a reduction of duties from 
the general rates of over 20 per cent in practically every instance, 
there was no need for any other adjustment of the Canadian tariffs *^ 

THE CUSTOMS WAR REVENUE ACT, 1915. 

On February 11, 1915, Mr. White, the minister of finance, an- 
nounced the intention of the Government to secure the enactment 
of special import taxes as a means of contributing to the cost of the 
war. The proposal, which was enacted as the customs war-revenue 
act, 1915,^^ provided for duties of 5 per cent ad valorem in the pref- 
erential schedule and 7^ per cent ad valorem in the intermediate 
and general schedules, to be imposed on articles in the free list and 
to be added to the existing duties on articles in the dutiable list of 
the general tariff law. The act provided, however, for a long list 
of articles to be excepted from the additional duties, including, 
among others, the items for which the intermediate rates were 
''bound" by the Franco-Canadian conventions of 1907 and 1909. 

CANADIAN ATTITUDE TOWARDS THE WAR-TIME PREFERENCE MOVE- 
MENT IN GREAT BRITAIN. 

The war years were marked in Great Britain by a revival of the 
movement for imperial preference and tariff reform. This policy 
received the support of important Government officials and of 
official committees. In Canada the British revival of the move- 
ment for protection and for imperial preference was welcomed, but 
was received with caution even by those who had always ardently 
advocated such a policy. There was a general fear lest attempts 

<i A full account of the tariff relations between Canada and the West Indies is given on pp. 696-714. 
42 Provisionally in effect Feb. 12, 1915; enacted into law Apr. 8, 1915; repealed in 1919 and 1920. See pp. 
689, 671. 



686 COLONIAL TARIFF POLICIES. 

be madej tlu'ough definite agreements between Great Britain and 
the Dominions^ to bind Canada to a definite fiscal policy and to 
restrict its autonomy in regard to customs tariffs. ^^ 

The Canadian position at that time with regard to a preference 
in Great Britain to Canadian products may be stated to have been 
as follows: Canada desired and would welcome such a preference, 
but only if Great Britauij after due consideration of its own economic 
situation, and not as a concession to an importunate colony, decided 
that the establishment of protective duties on products such as 
Canada exports, with preferential reductions or remissions of duty 
on imports from Canada, was in her own interest. 

AGITATION FOR REYISIOX OF THE TARIFF. 

A strong agitation for a lowering of the tariff' has been under way 
in Canada since early in 1917, and has become much more insistent 
since the signing of the armistice. The movement w^as given its 
first stimulus by the farmers, especially in the west. The campaign 
for lower tariff has taken the form of a demand upon the Govern- 
ment to accept the IQj-l offer of reciprocity still alleged to be on the 
statute books of the iJnited States*^ and to increase the preference 
on British manufactured goods. 

The first important step in the campaign was the introduction on 
May 29, 1917, of the following motion of amendment to the customs 
tariff by Mr. Frank Oliver, a western Liberal: 

That * " * in the opinion of this house it would be in the public interest if 
the customs tariff act were so amended as to provide — ■ 

1. That wheat, wheat flour, and all other products of wheat be placed upon the 
free list. 

2. That farm implements and machinery, farm tractors, mining, fioiu', and sawmill 
machinery, and repairs for same, rou^h and partly dressed lumber, illuminating, 
lubricating, and fuel oils, cement, and fertilizers be added to the free list. 

3. That staple foods and food products (other than wheat flour), domestic animals 
and the food therefor, be admitted into Canada free of dut^' when coming from and 
being the product of any country admitting like Canadian articles into such country 
free of duty. 

4. That substantial reductions be made in the general tariff on all articles imported 
into Canada, except luxuries. 

5. That the British preference be increased to 50 per cent of the general tariff. ^° 

The Liberal opposition supported the amendment, but it was 
defeated on a party vote. 

THE COALITIOX GOVERXMEXT AXD THE TARIFF. 

In 1917, in order to obtain more united support of the Govern- 
ment's war program, a number of Liberals were invited to enter the 
cabinet to form a coalition Government. In a general election 

« See the reference by Mr. Walter Long, the colonial secretary to the war cabinet, to the approval of 
preference within the Empire in The Times (London), July 25, 1918, and the comment by Premier Borden, 
in The Economist (London), Aug. 3, 1918. 

<4 On Apr. 13, 1921, Mr. Fielding moved in the House of Commons of Canada that the reciprocity agree- 
ment of 1911 with the Lnited States be accepted, but the motion vras rejected hj a vote of 100 to 79. A bill 
to repeal the reciprocity act was passed by the House of Representatives of the United States on Oct. 9, 
1919, but no action was taken onThe bill by the Senate. (See Congressional Eecord for Oct. 9, 1919, pp. 
7021 and 7029; and Weekly Compendium No. 54, Jime 9, 1920, p. 26. [H. E. bill No. 7779].) See, however, 
the decision of the Court of Customs Appeals in the case of Dow Co. v. United States (7 Court of Customs 
Appeals, 343). This decision held that sec. 2 of the Canadian reciprocity act vras repealed hj the tariff act 
of 1913. Dicta of the court suggest that the same rule would apply to see. 1 if a case imder this section 
should arise. " The tariiT act of 1913, " said the court, "shows, we think, that it was intended as a substi- 
tute for aU prior tariff legislation not saved by the act itself. * * * An act of that character must be 
held to have repealed all prior laws not expressly continued in force and relating to the same subject." 

45 House of Commons Debates, May 29, 1917, p. 1778. 



CANADA. 687 

held on December 17, 1917, on the issue mainly of conscription, the 
''Unionists" were returned to power. Of the total membership of 
235 in the House of Commons, 135, or over one-half, were Liberals, 
including both those supporting the Government and those in 
opposition. The coalition Government attempted to maintain a 
truce on the tariff question, but as the Conservatives, who were the 
dominant element in the coalition, were content with the existing 
tariff, and the opposition Liberals were strongly in favor of a reduc- 
tion, the tariff controversy continued. 

farmers' campaign for lower tariff. 

The signing of the armistice removed the hesitation which had 
existed during the actual fighting to press a political issue not con- 
nected with the war. The farmers throughout the country had been 
perfecting their organization and immediately upon the signing of 
the armistice they began holding conventions and meetings, at 
which resolutions were passed demanding a lower tariff and an 
increase of the British preference. Resulting partly from the prev- 
alence among Canadian farmers of the conviction that the Liberals 
had failed when in power to redeem pledges made when in opposition 
to lower the tariff, the farmers did not show themselves ready fully 
to cooperate with the opposition Liberals, but organized for indepen- 
dent political action. At the same time, a labor party was showing 
signs of developing in the cities and towns and negotiations for 
joint action between farmers and labor promised, if successful, to 
leave the Liberal Party without a constituency outside the Province 
of Quebec. The Labor Party showed a tendency to remain neutral 
on the tariff question, but cooperation with the farmers whereby 
the support of the farmers for radical social legislation would be 
exchanged for support by labor of the farmers' tariff demands, 
promised to be established. 

The signing of the armistice released the forces advocating tariff 
revision, and at once meetings were held, resolutions were passed, and 
members of Parliament were memorialized in support of a lower 
tariff. Most important of the resolutions were those passed by the 
Canadian Council of Agriculture, an organization representing the 
organized farmers of Ontario, Manitoba, Saskatchewan, and Alberta, 
and to a lesser extent, those of the other Provinces a.lso, which soon 
came to be regarded as the farmers' program. 

Tkejanners' tariff fvogr am. — The tariff' resolutions adopted by the 
Canadian Council of Agriculture have formed the basis of much of the 
subsequent tariff agitation and they were later adopted in large 
measure by the Liberal Party at a national convention. After 
setting forth reasons for a change in the tariff system, the resolutions 
urged that the Canadian tariff laws should be amended, as follows: 

(a) By an immediate and substantial all-around reduction of the customs tariff. 

(6) By reducing the customs duty on goods imported from Great Britain to one-half 
the rates charged under the general tariff, and that further gradual uniform reductions 
be made in the remaining tariff on British imports that will insure complete free trade 
between Great Britain and Canada in five years. 

(c) That the reciprocity agreement of 1911, which still remains on the United 
States statute books, be accepted by the Parliament of Canada. 

{d) That all foodstuffs not included in the reciprocity agreement be placed on the 
tree list. 



688 COLONIAL TAEIFF POLICIES. 

(e) That agricultural implements, farm machinery, vehicles, fertilizers, coal,' 
lumber, cement, illuminating fuel, and lubricating oils be placed on the free list, 
and that all raw materials and machinery used in their manufactui'e also be placed 
on the free list. 

(/) That all tariff concessions granted to other countries be immediately extended 
to Great Britain. 

(g) That all corporations engaged in the manufacture of products protected by the 
customs tariff be obliged to publish annually comprehensive and accurate statementa 
of their earnings. 

(h) That every claim for tariff protection by any industry should be heard publicly 
before a special committee of Parliament. 

As these tariff reductions may very considerably reduce the national revenue from 
that source, the Canadian Council of Agriculture would recommend that in order to 
provide the necessary additional revenue for carrying on the government of the 
country, and for the bearing of the cost of the war, direct taxation be imposed in the 
following manner: * * *, 

The development of organization for political purposes of the 
farmers and of labor along lines of opposition to the Union Govern- 
ment threatened to deprive the opposition Liberals of their basis of 
existence as a political party. Although they were traditionally the 
low-tariff party ^ their failure when in power fully to redeem their 
low-tariff pledges was now reacting against them. The opposition 
Liberals were further handicapped by the fact that they had only 
one representative in Parliament from the Provinces west of Ontario, 
and by their war-time opposition to conscription. 

LIBERALS FAVOR FARMERS' PROGRAM; MANUFACTURERS OPPOSE IT. 

In the election campaign in December, 1917, Sir Wilfrid Laurier 
had included in his manifesto a promise that he would remove the 
war tax of 5 and 7J per cent on imports, and in a speech before a 
convention of eastern Ontario Liberals on January 14, 1919, shortly 
before his death, he declared that the Liberals would continue to 
support the policy of a tariff for revenue and of preference to British 
imports. At this meeting a resolution was passed supporting the 
resolution moved by the Liberal opposition in the House of Commons 
in May, 1917, for a downward revision of the tariff and an increase 
in the British preference to 50 per cent of the general tariff, and other 
resolutions were adopted dealing with questions of social legislation, 
which followed closely those adopted by the Canadian Council of 
Agriculture. Shortly afterwards, the Saskatchewan Legislature, in 
which the Liberals were dominant, passed a series of resolutions 
modeled on those adopted by the Canadian Council of Agriculture. 
The resolution bearing on British preference urged : **^ 

The reduction of the customs duty on goods imported from Great Britain to one- 
half the rates charged under the general tariff and '^ * *^ further gradual uniform 
reductions "^ -^ ■^ to the remaining tariff on British imports that will insure 
complete free trade between Great Britain and Cauda in five years. 

As Parliament was about to reassemble in the- spring of 1919 the 
tariff agitation redoubled in intensity. The manufacturers, to meet 
the agitation, initiated, through the Canadian Manufacturers^ Asso- 
ciation, an extensive advertising campaign against tariff revision 
and were assisted in their campaign by the newly organized Canadian 
Reconstruction Association, composed chiefly of manufacturers and 
financiers and established to check the growing agitation for radical 

« The Monetary Times, Toronto, Jan. 24, 1919. 



CAI^ADA. 689 

tariff and other economic legislation. These organizations claimed 
that the tariff was necessary to provide the great revenue needs of 
the Federal Government and pleaded with the farmers that they 
should not desert the manufacturers now after farmers and manu- 
facturers had cooperated for 40 years in building up the Dominion. 
The Unionist members from the west supported the demands for 
a reduction of the tariff, and on March 25, 1919, Sir Thomas White, 
the minister of finance, in a statement made to a caucus of Unionist 
senators and members of the House of Commons, promised a general 
revision of the tariff after normal conditions had been restored in 
the Dominion and after all the interests concerned — industrial, 
trade, and agricultural — had been heard. 

PREFERENCE INCREASED BY TARIFF AMENDMENT OF 1919. 

On June 5, 1919, Sir Thom_as White delivered the budget speech 
containing the tariff proposals of the Government. The war tax of 
7|- per cent ad valorem under the general and intermediate tariffs, 
which had been imposed in 1915, was to be taken off a number of 
necessaries, including chiefly foodstuffs, cotton, linen and woolen 
clothing, leather and leather products, bituminous coal, petroleum 
oils, and agricultural implementSo The war tax of 5 per cent ad 
valorem under the preferential tariff was to be abolished for all 
items. A number of changes were proposed for rates in the tariff 
law, the most important of which were reductions of duty on agri- 
cultural implements. Tea imported direct from the countrj^ of pro- 
duction, or purchased in bond in the United Kingdom, formerly 
admitted free of duty, was to be subjected to a duty of 7 cents a 
pound under the preferential tariff and 10 cents a pound under the 
intermediate and general tariffs, a new preference thus being estab- 
lished in favor of British-grown tea. 

Sir Thomas White, in announcing the proposals of the Govern- 
ment, made it clear that these were not to be interpreted as the final 
program of the Government, In view of the revenue needs of the 
Government, and disturbed industrial and social conditions, the 
Government was not prepared to make any further changes in the 
tariff at this time. Until peace was restored and the world was upon 
a more stable basis, an intelligent revision of the tariff could not, 
in their opinion, be made, but White expressed the hope that a gen- 
eral revision of the tariff could be undertaken within a year. 

The proposed changes were a compromise between the protectionist 
and the low-tariff sections of the Unionist Party. One member of the 
cabinet, Mr, Crerar, and a few private members, left the Government 
because of their dissatisfaction with the limited extent of the tariff 
reductions made. 

But there was a general feeling, even in the west, that under the 
disturbed industrial conditions ruling at that time in Canada and 
with the needs of the Government for revenue as great as they were, 
the time was not appropriate to endanger the Government on the 
tariff issue. The Government's proposals obtained the approval of 
the house by a majority of 50 votes. 

The increase in the British preference which would result from the 
proposed amendments was scarcely mentioned in the course of the 



690 COLOK-IAL TAEIFF POLICIES. 

two weeks' debate. When the House went into committee of ways 
and means on the budget proposals, the minister of finance, upon being 
asked why the 5 per cent war tax under the preferential tariflF was 
taken off and not the 7^- per cent war tax under the intermediate and 
general tariffs, replied that it was a question of reTcnue needs — first, 
the war tax under the preference was to be taken off, and then, all the 
war taxes on necessaries, but fmlher the Governnient would not go.*' 

The abolition of the 5 per cent war tax under the preferential 
schedule effected a substantial increase in the am^ount of preference 
granted to British imports for those items upon which the 7^ per 
cent war tax continued in effect. For those items, on the other 
hand, which \vere relieved also from the 7i per cent war tax, the 
amendment reduced the preference by 2 J per cent ad valorem. 

The customs war revenue act of 1915 had established new prefer- 
ences of 2 J per cent ad valorem on a number of items upon which no 
preferences had formerly been granted. In many eases the amend- 
ment of 1919, by removing the 5 per cent tax on British imports, in- 
creased these preferences to 7^ per cent ad valorem. Most important 
in this group were alcoholic beverages, perfumes, paints, and var- 
nishes containing alcohol, nonferrous metals in primary and inter- 
mediate forms, wool and worsted yarns, and crude rubber. 

Many items w^hich already received a preference under the tariff 
of 1907 when of British origin and which Vv'ere granted an additional 
preference of 2J per cent ad valorem by the customs war revenue act 
of 1915 novv^ were to receive a further preference of 5 per cent ad 
valorem through the abolition of the war tax on goods entitled to the 
preference. This group includes ail the items not specially exempted 
in 1915 from the war tax, which were receiving a preference before 
1915, and, therefore, covers the greater part of the imports from 
Great Britain. 

The establishment of a preference of 3 cents per pound on British- 
grown tea and of 7i per cent ad valorem on crude rubber increased 
the value of the Canadian preference to India, Ceylon, and the 
Federated Malay States. 

LIBERAL CONVENTION, AUGUST, 1919, DEMA.NDS INCREASE OF 

PREFERENCE. 

From August 5 to 7, 1919, there Vv^as held in Ottawa a national 
Liberal qonvention, the first since 1893, at which the Liberal or- 
ganizations of the entire Dominion were represented by delegates. 
The Liberal Party at the convention commfitted itself definitely to a 
iow-taruff policy. Resolutions proposing the free admission of neces- 
saries, the lowering of duties on wearing apparel and other articles of 
general consumption other than luxuries, and an increase in the 
British preference to 50 per cent of the general tariff' were adopted 
almost unanimously and amidst great enthusiasm. The influence of 
the western sentiment in favor of a low tariff was evident at the con- 
vention, and the tariff resolutions adopted bore a close resemblance 

« Canada: House of Coraraons Debates, onrevised edition, June 19, 1919, p. 3S33. 



CAN^ADA. 691 

to those adopted by the Canadian Council of Agriculture. The 
tariff resolutions, as adopted, were as follows:*^ 

That the best interests of Canada demand that substantial reductions of the burdens 
of customs taxation be made with a view to the accomplishing of two purposes of the 
highest importance: 

First. Diminishing the very high cost of living which presses so severely on the 
masses of the people. 

Second. Reducing the cost of the instruments of production in the industries based 
on the natural resources of the Dominion, the vigorous development of which is essen- 
tial to the progress and prosperity of our country. 

That to these ends, wheat, wheat flour, and all products of wheat; the principal 
articles of food, farm implements, and machinery, farm tractors; mining, flour, and 
sawmill machinery and repair parts thereof; rough and partly dressed lumber; gaso- 
line; illuminating, lubricating, and fuel oils; nets, net twines, and fishermen's equip- 
ments; cements and fertilizers, should be free from customs duties, as well as the 
raw material entering into the same. 

_ That a revision downward of the tariff should be made whereby substantial reduc- 
tions should be effected in the duties on wearing apparel and footwear and on other 
articles of general consumption (other than luxuries), as well as on the raw material 
entering into the manufacture of the same. 

That the British preference be increased to 50 per cent of the general tariff. 

And the Liberal Party hereby pledges itself to implement, by legislation, the pro- 
vision of this resolution when returned to power. 

PREFERENCE DECREASED BY ABOLITION OF WAR SURTAX. 

The 7i per cent ad valorem war surtax which, except for the 
articles exempted in 1919, applied to all goods imported under the 
intermediate and general tariffs was removed under the tariff pro- 
vision of the Canadian finance act of 1920. This change, which 
became effective on May 19, 1920, effected a reduction of the British 
preference by the amount of the duty. 

CUSTOMS RULING ON EXCHANGE AIDS BRITISH PREFERENCE. 

The commissioner of customs on July 22, 1920, announced a ruling 
which effected a substantial reduction of the duty on imports from 
Great Britain and other countries where the exchange rates were in 
favor of Cp^nada. Under regulations previously in force, goods had 
been valued, for customs purposes, at the par value of the currency 
of the exporting country; that is to say, the basis of valuation was 
the market value of the goods in the country of export as expressed 
in the currenc}^ of that country, and duty was charged on that amount 
at the par rate of exchange. The result was that imports from the 
United States, which enjoyed a favorable rate of exchange on Canada, 
were undervalued, while countries with depreciated currencies were 
compelled to pay duty at an overvaluation. In the case of Great 
Britain and the United States the effect of these regulations, when 
the pound sterling was at a depreciation of 20 per cent and the 
United States dollar at an appreciation of 10 per cent, was the oblit- 
eration of the normal British preference. ^^ The new ruling provided 
that the basis of valuation of imports from countries with depreciated 

^8 Toronto Globe, Aug. 7, 1919. 

« The normal preference is about one-third of the Canadian duties, which range from about 20 to 35 per 
cent. The greater the fraction of the ordinary duty remitted in favor of imports from Great Britain, the 
greater are the depreciation and appreciation required to obliterate the preference. The extreme case is 
that of goods admitted free from Great Britain and diitiable from other sources, in which case no appre- 
ciation of the dollar or depreciation of the pound would result in an entire obliteration of the preference. 



692 COLONIAL TAPJFF POLICIES. 

currencies should be the value of the foreign currency in its relation to 
gold, and for customs purposes the value of this currency was to be 
the exchange on Canada in the country of export at the date of ship- 
ment. This ruling conferred a real advantage upon European coun- 
tries as compared with the United States and Japan; but a change, 
embodied in an act of June 4, 1921, curtailed this advantage as 
regards those countries whose currencies are at the greatest dis- 
counts, by denying recognition to depreciation in excess of 50 per 
cent. Further, the same law provided ^ that the valuation of products 
of countries whose currencies are above par in Canada should be in- 
creased in proportion to the appreciation of their currencies; i. e., 
the amount payable under ad valorem duties upon imports from the 
United States has been raised by 10 per cent or more. 

FRANCO-CANADIAN TRADE AGREEMENT, 1921. 

France, late in 1918, announced her intention of terminating all 
trade agreements with a view to obtaining a free hand in determin- 
ing her postwar trade policy in accordance with the changed con- 
ditions brought about by the war. In denouncing her trade agree- 
ments France announced that she desired to continue them in force, 
subject to termination on three months' notice by either party, 
until new agreements should be consummated. Among the com- 
mercial treaties thus denounced by France but continued tempo- 
rarily in force were the conventions of 1907 and 1909 with Canada. ^° 
Canada finally terminated them in June, 1920. 

On January 29, 1921, Canada and France entered into a new 
trade agreement to supersede the trade conventions of 1907 and 1909 
between those tv/o countries.^^ Under the conventions of 1907 and 
1909, Canada received the minimum rates on 152 items of the French 
tariff, w^hile under the new agreement Canada receives the same 
rates as before on all but 12 of these items. On these 12 items, 
which consist of iron and steel products, gloves, furniture, pianos, 
organs and accessories thereof, Canada is granted stated percentage 
rebates of duty based on the difference betv/een the rates of the 
maximum and minimum tariffs. ^^ These percentages are to remain 
the same regardless of the increases or decreases in duties, coefficients, 
or surtaxes which France may make in the future. As a recom- 
pense to Canada for her failure to obtain the rates of the minimum 
tariff on these 12 items, France grants to Canada special treatment 
on an additional list of 31 articles, including linseed oil, petroleum 
and other mineral oils, oxides and salts of cobalt, steam and gas 
engines, agricultural machines and machine tools. Of these 31 
articles, 23 are subject to the rates of the minimum tariff and 8 are 
given percentage rebates of duty based on the difference between the 

a Department of customs and excise act, Ch. 26, 11, 12, George V. Under this law an American ex- 
porter who agrees to accept Canadian dollars at par when the depreciation exceeds 5 per cent makes the 
exports liable to the antidumping duty. 

60 The conventions had become effective in 1910. See p. 676. 

51 The act of the Canadian Parliament providing for the execution of this agreement was assented to on 
May 3, 1921, and became effective at once. But the agreement had been ratified by France on Mar. 12 
(effective Mar. 25) and, according to a statement of Sir George Foster, became effective in Canada on 
Mar, 27. House of Commons Debates, Ottawa, Mar. 22, 1921, pp. 1228-9. 

62 The amount of dutj^ to be paid on these items is found by multipijong the difference between the rates 
of the mJnimijm and maximum tariffs by the percentage opposite each item. The product is the amount 
of the rebate, and, subtracting this amount from the rate of the maximum tariff, gives the rate of duty tc 
b6 paid on these items. 



CANADA. 693 

minimum and maximum tariffs. In return, Canada extends to 
French products the most favorable tariffs and taxes that are, or 
may be, granted by Canada to the products of any third Power, 
except those of the United Kingdom or of the British dominions and 
possessions. Canada also grants to France most-favored-nation 
treatment as regards exportation, transit, consumption taxes, and 
other internal duties. French products thus receive the benefit of 
the Canadian intermediate tariff, but they are no longer accorded 
special rates below the rates of the intermediate tariff, as was the 
case under the conventions of 1907 and 1909. 

The new agreement applies only to Canada and France, whereas 
■ the conventions of 1907 and 1909 applied also to French colonial 
possessions. The present arrangement is to remain in force until 
the conclusion of a new commercial convention, but may be de- 
nounced by either party on four months' notice. 

. TARIFF REVISION PENDING. 

Outside of the removal of the war surtax no change of importance 
was made by the finance act of 1920. A tariff commission, however, 
was appointed to hold hearings in all the Provinces to procure in- 
formation on which to base the next revision of the tariff. ^^ The 
commission began its sittings in Winnipeg on September 14, 1920. 
But, though the commission completed its hearings in December, 
1920, the revision of the Canadian tariff has been postponed to allow 
the Government to study the nev/ situation which will result from the 
revision of the Am_erican tariff. Accordingly, the changes of rates 
proposed in the annual budget introduced on May 9, 1921, and 
provisionally effective on May 10, were confined almost exclusively 
to those necessary to carry out the Canada- West Indies trade agree- 
ment. (Seep. 711.)^* 

VI. Intercolonial Preference. 

The tariff relations of Canada with her sister Dominions and the 
British Crown colonies are here treated under two heads. The 
sumruary gives the essential points of the whole story, parts of which 
are more fully treated in the other chapters to which references are 
made, and the section on the relations of Canada with the West 
Indies traces in some detail the development in Canada of a tariff 
polic}^ which gives special consideration to West Indian interests 
and which, some now affirm, looks toward the establishment of a 
commercial, if not a political, union. 

SUMMARY OF CANADA' S TARIFF RELATIONS WITH OTHER BRITISH 

POSSESSIONS. 

EARLIER NEGOTIATIONS, TARIFF OF 1897. 

With the exception of the reciprocal preferences established 
between Canada and Prince Edward Island prior to the entrance of 

53 The co mm ission consisted of Sir Henry Drayton, minister of finance (chairman); Hon. J. A. Calder, 
president of the privy council: and Senator Robertson, mioister of labor. Mr. Calder was ta Europe v/hen 
the commission began its work, and his place was filled temporarily by the Hon. Dr. Tolmie, minister of 
agriculture. 

54 The only other change of any importance was an increase in the duties on liquors, duties in respect to 
which, with the exception of those on rum and wines, no preference is given. For changes in adminis- 
trative features of tariff legislation see pp. 692 and 719. 



694 COLONL^ TAKIFF POLICIES. 

the island into the confederation and of a preference in the Canadian 
market to the products of the Newfoundland fisheries/^ there was 
no instance after 1867 and prior to 1897 of a direct preference in 
Canada to imports from other British colonies. Negotiations for 
reciprocity with the British Ys'Qst Indies were undertaken at least 
twice but came to nothing. ^^ The colonial conference at Ottawa in 
1894 gave some impetus to the movement for intercolonial preference. 
Shortly after the conference Canada negotiated a reciprocity arrange- 
ment with New Zealand^ but the New Zealand Legislature refused 
to ratify it. 

Under the customs tariff act of 1897 the controller of customs was 
authorized to extend the rates of the ''reciprocal tariff to any 
country whose tariff was as favorable to Canadian products as the 
rates of the reciprocal tariff were to its products. The only British 
possessions to receive the benefit of the reduced rates under this act 
were India and New South Wales. ^^ 

PREFERENTIAL TARIFFS OF 1898 AND 1907. 

The tariff act of 1898 provided for the admission under the prefer- 
ential schedule of raw sugar imported direct from any British colony 
or possession '"^ of the products of Berijiuda, British Guiana, the 
British West Indies proper/^ and of the products of any other British 
colony or possession, the customs tariff of which was, in the judgment 
of the minister of customs, on the whole as favorable to Canada as 
the preferential duties were to such colon}^ or possession. Accord- 
ingly, British colonies which had lov/ revenue tariffs on imports in 
most cases received the benefit of the Canadian preferential tariff 
without having to bargain for it. By Orders in Council of July 14, 
1898, the products of India, of New South Wales,^^ and of the Straits 
Settlem_ents were admitted at the preferential rates. The tariff 
revision of 1907 added Ceylon to the list of colonies entitled to the 
preferential rates. This act continued the preference to the British 
West Indies, but made it subject to withdrawal at the discretion 
of the minister of customs, as were the preferences extended to other 
British colonies. 

NEW ZE ALAND. ^- 

In 1903 New Zealand established a preference on imports of British 
and British colonial origin by imposing surtaxes on a restricted list 
of articles when of non-British origin. Canada, by Order in Council 
of February 26, 1904, thereupon granted to New "^Zealand the bene- 
fits of the Canadian preferential tariff. The Canadian Govermnent 
made several attem.pts, especiahy during the years 1906-7, Yv^hen the 
New Zealand tariff" was undergoing revision, to negotiate a sj)ecial 
reciprocal arrangement, similar in cha.racter to the one negotiated 
in 1907 betv/een New Zealand and South Africa, but the efforts of 
the Canadian representatives cam.e to nothing, 

55 See p. 731. 
'■6 See p. 696. 

"7 Nev/ South Wales pursued a free-trade policy. For the tariff of India, see p. 332. 
53 Amended in 1907 to require that the sugar snal! be the produce of a British colony as well as imported 
therefrom. 

59 For the reason for including the West indies and for the value of this preference to them before and 
after 1903, see pp. 692-700. 

60 On the formation of the Australian Commonwealth in 1901 , New South Wales ceased to have a separate 
tariff, and became subject to the Commonwealth tariff, wliich was protective in character. The Canadian 
Order in Council extending preferential rates on imports from New South Wales vvas rescinded on Jan. 
23. 1903. 

" See chapter on preferential policy in New Zealand, p. 771. 



¥ 



CANADA. 695 

SOUTH AFRICA. *^2 

The South African colonies forming the South African customs union 
first estabhshed preferential rates in their tariff under the customs 
union convention of 1903. By arrangement between Canada and the 
customs union, each granted to the other the benefits of their prefer- 
ential tariffs, beginning with July 1, 1904. Canada, in addition, 
agreed to classify South African wines so that they should not be 
subject upon importation into Canada to the surtax of 30 per cent 
ad valorem if exceeding a certarin alcoholic content. 

BRITISH WEST INDIES. 

As the recult of a conference at Ottawa in 1912, Canada and 10 of 
the British West Indian colonies ratified and made effective from 
June 2, 1913, a reciprocal trade agreement. In accordance with this 
agreement, Canada increased the preference hitherto granted to prod- 
ucts of all the British West Indies and pledged its continuance for 10 
years to the parties of the agreement. Special treatment was granted 
to sugar, cocoa, limes, and lime juice, and other products of the West 
Indies were granted a reduction of 20 per cent from the rates of the 
general tariff.®^ In return the West Indian colonies, which were 
parties to the agreement, made a like reduction upon a list of 47 
Canadian products.®^ 

In 1920 a new Canada- West Indies trade agreement was made 
which has now been ratified and put into effect by Canada and by 
all the British West Indies except Bermuda. This agreement pro- 
vides for the admission into Canada of all dutiable products of 
the West Indies, except tobacco and liquors, at a reduction of 50 per 
cent from the ordinary duties. ^^ The West Indies likewise have 
agreed to increase their preference to Canadian products, though 
most of them grant a smaller percentage of reduction from their 
general tariff rates than that which Canada grants to their products. 

OTHER CROWN COLONIES. 

The Canadian Government, by Order in CounciP^ of February 1, 
1913, extended the benefits of the preferential tariff to all the free- 
trade British colonies with the exception of Gibraltar, Malta, Cyprus, 
and Hongkong. The character of the trade of these four colonies 
and their proximity to foreign sources of imports into Canada made 
it inexpedient to extend the preference to them. Twenty-five addi- 
tional colonies were thus granted the benefit of the preferential 
tariff, including British Honduras, v/hich alone of all the British West 
Indies did not already enjoy it. 

AUSTRALIA.^'' 

No preferential relations have been established between Canada 
and Australia, in spite of repeated negotiations, initiated, generally, 
by the Canadian Government. In 1906 Australia negotiated recip- 

«2 See chapter on preferential tariffs in British South Africa, p. 752. 
e3 See p. 706. 
M See p. 362. 

^ See p. 712 for the rates on sugar and certain other products. 

f^s Pursuant to sec. 4 of the Canadian Customs Tariff Act of 1907, authorizing the Governor General in 
Council to extend the preference to any British colony not already entitled to it. 
67 See ehaijter on preferential tariffs in Australia, p.' 785. 



696 COLONIAL TARIFF POLICIES. 

rocal preference with Soutli Africa, and in 1908 she granted a prefer- 
ence to imports from Great Britain. In neither case did Australia 
extend the benefits of the preferential rates to Canada. On the other 
hand, Canada refuses to grant preferential treatment to Australian 
goods unless a reciprocal preference is granted by Australia. 

Sir G. E. Foster, the Canadian minister of trade and commerce, 
has explained the failure to establish preferential relations between 
Canada and Australia as due to the short terms of ofhce of the Aus- 
tralian governments, which make negotiations difficult.®^ A more 
important factor appears to have been the reluctance of Australia 
to admit at reduced rates of duty the products for which Canada 
especially sought preferential trea"tment, such as fish, lumber, agri- 
cultural implements, and paper, owing to theu^ competition -^dth 
Australian products. Negotiations are (Oct. 1921) again in progress, 

NEWFOUNDLAND .^^ 

Nev/foundland is the only one of the self-governing colonies which 
has not established a directpreference on imports from Great Britain 
or from British colonies. Her chief exports are the products of the 
fisheries, and for these her most important markets are in Great Britain 
and in foreign countries. Newfoundland has always sought to obtain 
a reciprocity arrangement with the United States, and her reluctance 
to enter into preferential arrangements with British countries has 
been due in large part to her fear lest such arrangements endanger 
her chances of securing reciprocity VN^ith the United States. 

Canada mthholds the benefits of her preferential tariff from the 
products of Newfoundland. But, with the exception of the period 
from 1885 to 1892, a special preference has been granted by Canada 
to the products of the Newfoundland fisheries, whereby they enter 
into Canada free of duty.'^'^ The exports from Newfoundland to 
Canada are inconsiderable in amount, and, with the exception of the 
products of the fisheries, consist almost wholly of iron ore, which is 
on the Canadian free list and is necessary to the Nova Scotian steel 
industry, Newfoundland has little to gain, therefore, from a prefer- 
ential arrangement v/ith Canada. 

EELATIOXS OF CANADA Vv'ITH THE BRITISH WEST LSDIES. 

NEGOTIATIONS EOR RECIPROCAL PREFERENCE, 1883, 1890. 

In 1883 Canada initiated her attempts to regain her former ^^ 
share in the West Indian trade through the negotiation of a recip- 
es The Nation (New York), Nov, 2, 1918, "British Imperial Preference." 
6s See chapter on the preferential policy in Newfoundland, p. 731. 

70 Customs tariff of 1907: 

8. Notwithstanding anything in this act, fish and other products of the fisheries of Newfoundland may 
be imported into Canada free of customs duty unless otherwise determined by the Governor in Council, 
by order pubhshed in the Canada Gazette. 

71 The commercial relations between Canada and the British West Indies were of considerable importance 
in the early days of Canada. The shipping and shipbuilding industries of the maritime Provinces and 
lower Canada, and the navigation lav\' restrictions, after the American Revolution, on American commerce 
with the British colonies, fostered trade between Canada and the British West Indies. But the gradual 
modification, and finally in 1849 the repeal, of the navigation laws, and, shortly after, the rapid dechne 
in wooden shipbuilding and shipping, altered conditions greatly, and together with the repeal, in 1848, 
of the British preference on colonial sugar, served to throw the West Indies into very close economic re- 
lations with the United States. American goods be^an to replace British and Canadian in the West Indies, 
Canada's trade with the West Indies declined both relatively and absolutely, and the United States be- 
came the most important market for the sugar, molasses, fruit, and rum of the West Indies. The maritime 
Provmcesin particular felt keenly the loss of the West Indian trade. 



CANADA. 697 

rocal arrangement with the colonies. The informal negotiations 
aimed at the conclusion of a trade agreement, whereby, in return 
for preferences in Canada on their rum, sugar /^ fruit, and molasses, 
the West Indies were to grant a preference on Canadian flour, fish, 
and lumber. The negotiations were vetoed, however, by the secretary 
of state for the colonies, who declared that the Imperial Govern- 
ment would not sanction any arrangements v/hich would involve 
the establishment in the West Indies of differential duties in favor 
of Canada.'^^ 

In 1890 Canada again endeavored to establish closer commercial 
relations with the British West Indies. In that year Mr. G, E. 
Foster, the Canadian minister of finance, visited the West Indies 
with a view to negotiating reciprocal preference. His proposal was 
as follows : 

The Dominion ot Canada proposed to give a differential of about 25 per cent as a 
first go-off on duties at present enforced upon sugar exported from these islands, which 
would be equal to about 18.50 per ton, and also a differential on fruit, which would be 
sufficient to secure markets in Canada for sugar and fruit from the British West Indies. 
In return, the Dominion of Canada asks these islands to concede a differential on her 
products, which may be briefly combined under the heads of products of the sea, 
the forest, the field, the mine, animal products, and coal. All that is asked is that 
these islands shall give a differential equivalent to the differential which Canada 
offers them,'^* 

The West Indies gave Mr. Foster's proposal a cool reception. 
The McKinley tariff bill was then before the United States Congress ; 
the colonies were in the midst of negotiations with the United States 
aiming to secure for their sugar and molasses free admission into the 
United States under section 3 of the McKinley tariff in return for 
concessions to American imports into the West Indies ;^^ they 
feared that any tariff concessions to Canada would lead to retaliation 
by the United States, and at that time Canada was not in a posi- 
tion to offer to the West Indies any tariff advantages valuable 
enough to offset the advantage of free entrance of their sugar into 
the United States. 

CANADIAN PREFERENCE CONCEDED TO WEST INDIES, 1898. 

In the spring of 1898, Mr. Fielding, the Canadian minister of 
finance, in announcing the introduction of a preferential reduction 
of 25 per cent from the general duties on imports from Great Britain 
and from British colonies treating Canadian products favorably, 
stated that the preference would be extended to the products of the 

72 Products of the sugar cane were throughout the nineteenth century the main export products of the 
British West Indian colonies. The development of beet-sugar production in Europe under the stimulus of 
production and export bounties led in the latter part of the nineteenth century to a steady and serious 
decline in the prosperity of the sugar-producing colonies. The cane sugar of the West Indies, produced 
by antiquated methods and without scientific guidance, could not compete in the British market with the 
bountied beet sugar. Although the United States offered a market, the American price was governed 
by the price of European beet sugar, and was not suflficient to maintain sugar production in the West 
Indies on a prosperous basis. Acute economic distress in the colonies led to the appointment of a series 
of royal commissions to investigate and to suggest remedies. The only recommendations they could malc&— 
the improvement of technique in cane growing and in sugar production, and the diversion of labor and 
capital to the ctdtivation of other products— required for their fulfillment the investment of new capital, 
and capital would not flow to the colonies without more assurance of profitable returns than the existing 
economic conditions gave. 

73 Canadian Sessional Papers, No. 89, 1883, pp. 38, 39. 

7' Quoted from a statement made by Mr. Foster in Barbados, by Eugene M. Aaron, Ph. D,, Caribbean 
Trade. A reply to the Hon. George E. Foster, in "The Gleaner," Kingston, Jamaica, Jan. 14, 1891, 

75 Under the agreements reached in 1892 between the United States and the British West Indies, certain 
tariff concessions were made by the West Indies to the United States, but both the United Kingdom and 
Canada shared in these. See U. S. Tariff Commission: Reciprocity and Commercial Treaties, p. 152. 



698 COLONIAL TARIFF POLICIES. 



British West Indies and to sugar refined in Great Britain from raw 
sugar produced in British colonies. He explained that a strict 
interpretation of the provisions of the preferential tariff ¥/ould not 
entitle the West Indies to the preference, since they levied import 
duties on aU the important articles of Canadian export, but that as 
a sign of Canada's willingness to share in imperial responsibilities 
and as an act of friendship to British colonies in distress, the pref- 
erence would be extended to them without demand upon them for 
return concessions. In order to make the concession of significance 
to the West Indies, raw sugar was transferred from the free to the 
dutiable list, and thus made subject to the preference. 

Until 1900 the preference amounted to 18 cents per 100 pounds 
for 96° polariscope sugar. But the United States in the Dingley 
Tariff Act of 1897 had changed the pjrovision for countervailing 
duties '^ on bountied sugar so as to provide for an additional import 
duty above the general rate equal in amount to the export bountj^, 
whereas Canada imposed no countervailing duties on bounty-fed 
sugar. From 1896 to 1903 the German export bounty on rav/ sugar 
amounted to 27 cents per 100 pounds. The New York price of raw 
sugar during this period was almost always on the basis of the cost 
of German sugar laid down in New York, general dut}- and counter- 
vailing duty paid. West Indian sugar, which was free from the coun- 
tervailing duty, therefore enjoyed a preference in the American 
market amounting to 27 cents per 100 pounds, or 9 cents per 100 
pounds greater than the preference it received in Canada. The 
Canadian preference, as long as these conditions remained un- 
changed, w^as of little value, therefore, to the British West Indies. 
Mr. Fielding, the Canadian minister of finance, in his budget speech 
of 1898, acknowledged this, and on the same grounds the West Indian 
committee, the representatives in London of the West Indian plant- 
ers, in correspondence with the colonial office, opposed any action 
leading toward reciprocal preference with Canada w^hich might 
endanger, through retaliation by the United States, the American 
market for West Indian sugar. 

In 1900 the Canadian preference was increased to 331 per cent 
of the general duties. On 96° raw sugar this amounted to a prefer- 
ence of approximately 24 cents per 100 pounds. The Canadian 
preference, even in its increased amount, thus continued to be less 
than the tariff advantage enjoyed by the West Indies over German 
sugar in the American m.arket. In this year Mr, Fielding attempted 

^6 Countervailing duties on bountied sugar. —In the tariff act of 1894 the United States reimposed duties 
on sugar and niol asses, and provided in addition for a countervailiiig duty amounting to one-tenth cent 
per pound on sugar receiving export boujitieg. This countervailing duty practically estabhshed a prefer- 
ence on West Indian cane sugar in its competition in the American market v/ ith the subsidized European 
beet sugar, but the amount of the coimtervailing duty was not sufflcient to check the economic depression 
in the West Indies. The distress became so general and so acute that in 1897 the imperial authorities 
appointed another royal commission to investigate conditions in the AVest Indies. The commission 
reported that some of the colonies v/ere threatened with extinction ov/ing to the downward trend of the 
price of sugar, and strongly recommended the cultivation of other crons. As a result of the comimission's 
findings, the Imperial Government voted substantial grants in aid to the colonies to alleviate the economic 
distress, but this measure was not a sufficient remedy. The report was followed in England by consider- 
able agitation on the part of friends of the West Indies in favor of the estabhshment of countervailing 
duties on bomitied sugar imported into Great Britain. They emphasized the complaints of the West 
Indies that they received better treatment from the United 'States than from (;reat Britain, and they 
predicted that a continuation of existing conditions would drive the colonies into union with the United 
States as the only solution for their economic problems. But countervailing duties were op])osed by 
extreme free traders as a contravention of free-trade principles, by consumers v^'ho benefited -from the 
cheap sugar and sugar products which resulted from the bounty competition on the continent, and by 
manufacturers of jam, biscuits, confectionery, and liquors, and by the refiners of sugar, who, under the 
stimulus of the artificially cheapened raw materials, had developed great industries producing for both the 
domestic and the export trades. 



CANADA. 699 

without success to negotiate reciprocal free interchange of products " 
with Trinidad, with an agreement upon minimum rates on imports 
from foreign countries. 

THE SITUATION CHANGES IN 1903. 

In 1903 three events greatly altered the conditions governing the 
sugar export trade of the British West Indies. The Brussels Sugar 
Convention led to the abolition of beet-sugar bounties; the United 
States and Cuba concluded a reciprocity treaty; and Canada imposed 
a surtax of 30 per cent ad valorem on all imports from Germany. 
In consequence of these events the Canadian preference became 
the saving factor for the British West Indian sugar industry after 
1903. The rapidly increasing consumption of sugar in Canada 
enabled the West Indies to market a large part of their crop in 
Canada. Even that portion of their exports which went to Great 
Britain consisted almost wholly of fancy muscovado sugars (for 
which a special but limited market existed in Great Britain) and of 
supplies of centrifugal sugar which were profitably purchased by 
British refiners only because the Canadian tariff extended the prefer- 
ence to reexports to Canada of British sugar refined from British 
colonial sugar.'^^ 

TJie Brussels Sugar Convention, 1903, — The Brussels Sugar Con- 
vention, which became effective in 1903, and to which Great Britain 
and all the European beet-sugar producing countries, except Russia,^* 
were parties, decreed the abolition of all bounties on the production 
and export of sugar. The price of sugar then rose in Europe, but 
the amount of the rise was not as great as the former bounties. The 
United States' countervailing duties lapsed with the disappearance 
of the bounties, and this made it possible to lay down European 
beet sugar in the American market at a lower price than had pre- 
viously prevailed, and, consequently, led to lower bids for West 
Indian cane sugar by American importers. The Brussels Sugar 
Convention thus brought serious injury to West Indian sugar in 
what had hitherto been its most important market. Great Britain 
and Canada had imposed no countervailing duties on bountied 
sugar.. The rise in price of beet sugar after the abolition of the 
bounties, therefore, improved the position of cane sugar in these 
markets, but in Great Britain the change in conditions was not suf- 
ficient to enable West Indian sugar to compete on a substantial 
scale and profitably with European beet sugar. In Canada, however, 
the rise in price, added to the Canadian preference, created a 
valuable market for British West Indian sugar. 

United States-Cuba reciprocity treaty, 1903.- — In December of the 
same year the United States-Cuba reciprocity treaty ^^ became efi^ec- 
tive, establishing a preference in the American market of 20 per cent 
of the American duties on imports of sugar from Cuba. On 96° 
polariscope sugar this amounted to 33.7 cents per 100 pounds. 

^f Except liaiiors and tobacco. 

'8 Canadian customs tariH act of 1S97 as amended in 1898, schedule D: ^'Provided, That the [preferential] 
reduction shall only apply to refined sugar when evidence satisfactory to the minister of customs is fur- 
nished that such refined sugar has been manufactured wholly from raw sugar produced in the British 
colonies or possessions." 

" Russia became a party to the convention in December, 1907. 

80 See the Tariff Commission's report on Reciprocity and Commercial Treaties. 

185766°— 22 45 



700 COLOISriAL TARIFF POLICIES. 

As a result of the Spanish- American War, Porto Rico and the Philip- 
pines had been annexed to the United States. Porto Rican sugar 
thereby secured free admission ^^ into the American market, and 
Philippine Sugar was admitted at a reduction of 25 per cent from the 
rates of the general tariff. British West Indian sugar came on the 
market each year at about the same period as the bulk of the Cuban 
and Porto Rican sugar. During these months of each year sufficient 
quantities of preferential sugar from Cuba and the American colonies 
were offered for sale to American importers to put full-duty sugar at 
a serious price disadvantage in the American market. This situation 
further enhanced the value to the British West Indies of the Cana- 
dian preference, 

Canadian surtax on German sugar, 1903. — In the same year Canada 
retaliated for the German penalization of Canadian imports ^^ by 
imposing a surtax equal to one-third of the general tariff rates upon 
the importation of all German products. In a very short time this 
surtax practically eliminated German beet sugar from the Canadian 
market. The American preferences to the sugar of Cuba and of 
the American colonies prevented supplies from these sources from 
competing in the Canadian market, so that Canada became for the 
first time dependent upon British West Indian sugar for a large 
fraction of its supplies. 

CHANGES IN CANADIAN TAEIFP, 1904 AND 1907, 

In 1904 Canada added still further to the value of the preference 
to the British West Indies by transferring to the free list molasses 
from British colonies when imported directly into Canada, molasses 
from other sources remaining subject under the Canadian general 
tariff to a duty of 1 f cents a gallon. Because of the relatively great 
extent to which the British West Indies still adhered to the old, 
muscovado process, yielding poorer sugar but richer molasses than 
the centrifugal process, molasses was a more important bj^-product 
of the cane-sugar industry in the British West Indies than in com- 
peting cane-sugar countries. In Canada, moreover, rich molasses 
was used in place of sugar to a much larger extent than in any other 
northern country, and, although consumers of molasses in Canada 
have in recent years been abandoning it for white sugar, the Canadian 
market is still important to the colonies which export molasses. 

In 1907 in the general revision of the Canadian tariff some changes 
were made in the sugar duties. The uniform percentage reductions 
of the preferential schedule were replaced by specified rates of duty 
lower than the general rates by varying amounts. Table 4 indicates 
the changes made in the sugar duties, as applied to raw sugar of 
96° polariscope and refined sugar of 100° polariscope. 

81 See p. 609. 

82 Becaase of Canada's grant of preferential treatment of British imports. See p. 672, 



CANADA, 701 

Table 4. — Canadian preferences on sugar in tariff acts of 1897 and 1907. 
[Per 100 pounds.] 



Tariff act 
of 1897. 



Tariff act 
of 1907. 



Duties on 96° raw sugar: 
General 



$0. 714 

Preferential i . 47| 

I 

Amount of preference , 



$0. 83i 
52| 



.23# 



1.26 

.84 



Duties on 100° refined sugar: 

General 

Preferential (refined from British colonial raw) 

Amount of preference ; .42 

Differential between rate on British refined from British colonial raw and rate on 

British colonial raw 

Differential between rate on British refined from British colonial raw and rate on 

foreign raw , 



As indicated in the table, the general rate on raw sugar was con- 
siderably increased, whereas the preferential rate was only slightly 
increased, with the result that for sugar of 96° polariscope test the 
preference was increased from approximately 24 cents per 100 pounds 
to 31 cents per 100 pounds. The duties on refined sugar remaining 
unchanged, the protection to the Canadian refiners, both against for- 
eign refined sugar and against British refined sugar from British 
colonial raw sugar, was decreased. As against the surtaxed German 
raw sugar, the preference to the West Indian sugar was from 80 to 
90 cents per 100 pounds of 96° polariscope test, the amount of surtax 
(30 per cent ad valorem) varying with the price of sugar. 

The Canadian tariff act of 1907 provided (sec, 135a) that raw sugar 
^^when imported to be refined in Canada by Canadian sugar refiners 
to the extent of twice the quantity of sugar refined during the cal- 
endar years 1906, 1907, and 1908 by such refiners from sugar pro- 
duced in Canada from Canadian beet root^' would be admitted at the 
preferential rate, regardless of its origin, until December 31, 1909. 
This continued in effect until 1912, and on a reduced scale until 1914. 
It was an impairment of the preference to West Indian sugar, but 
the small amount of sugar beets grown in Canada made the conces- 
sion to the refiners of little significance. The revision of 1907 m- 
creased the preference on molasses over 35° polariscope by retaining 
British colonial molasses on the free list and increasing the duty on 
foreign molasses from If to 3 cents a gallon. 

The tariff changes in 1907 resulted, on the whole, in increasing the 
value of the preference to the West Indies. The decreased protection 
to the Canadian refiner resulted in a diversion to the British refineries 
of some of the West Indian raw sugar. But as this was later reex- 
ported to Canada under the preferential tarift', the increased British 
demand for West Indian sugar was also to be attributed to the 
Canadian preference. The increase in the Canadian consumption of 
sugar, added to the efi'ects of the preference, forced the Canadian 
refiners to depend in great degree upon the British West Indies for 
their supplies of raw sugar. If the Canadian refiners should, even 
in combination, attempt to turn to foreign raw sugar, their protection 
against British refined sugar from British colonial raws would be 
reduced nominally to one-half cent a hundred pounds, and in reality 
there would actually be a premium on imports of refined sugar 



702 



COLONIAL TAEIFF POLICIES. 



because of the wastage of approximately 7 per cent involved in refin- 
ing. This situation, it appears from the evidence given at the royal 
commission hearings in 1909 and 1910,^^ enabled the West Indian 
producers to gain most, if not all, of the preference.^* 

CONCESSION IN 1903 TO CANADIAN REFINERS. 

In introducing the annual budget on April 20, 1909, IVIr. Fielding 
stated that the Canadian refiners alleged that they could not get 
sufficient quantities of British colonial sugar of the right grades and 
at the right time for their purposes; that through combination the 
West Indian planters, in order to decrease the amount to be sold in 
Canada and to keep the Canadian price up at a point where the West 
Indian planters would gain the full benefit of the preference, sold to 
the British refiners on a more favorable basis than to the Canadian 
refiners, and that the West Indian planters thus absorbed all of the 
preference. Mr. Fielding then announced that any Canadian refiner 
would be allowed to import foreign raw sugar at the preferential 
rates to the extent of one-fifth of the weight of sugar refined from raw 
sugar by such refiner in Canada during the calendar year in which 
such sugar was imported. 

Table 5. — Sugar production in the British West Indies and Canadian imports of sugars 

[Millions of pounds.] 





Produc- 
tion of 
sugar in 
British 
West 
Indies. 


Imports of sugar into Canada. 


Year. 


Total. 


From 
British 

West 
Indies. 


Foreign 
sugar at 
preferen- 
tial rates. 


1894 


640.7 
561.6 
623.0 
607.6 
583.3 
548.2 
525.0 
633.5 
674.0 
648. 9 
592.7 
570.6 
669.2 
566.1 
568.9 
505.3 
569.2 
499.4 
502. 7 
38.5.3 
565.4 
575. 6 


355. 3 
224. 3 

338.5 
240.7 
268.1 
307.3 
339.3 
373. 7 
390.2 
392. 2 
348.1 
451.0 
312. 8 
469.8 
■183. 5 
500. 2 
576.3 
587.4 
641.6 
704.6 
677.9 
599. 
737.2 


30.0 

26.0 

25.6 

11.1 

19.1 

5.6 

21.4 

42.9 

98.9 

279.7 

250.4 

324.9 

247.4 

347.9 

322.3 

271.3 

333. 5 

351.3 

280.8 

239. 1 

300. 5 

273. 6 

429.0 




1895 




1896 - - 




1897 




1898 




1899 




1900 




1901 




1902 




1903 


■ 


1904 




1905 





1906 . 




1907 


22 1 


1908 


37 6 


1909 


53 2 


1910 . 


85 9 


1911 


60.2 


1912 


39 3 


1913 


35.9 


1914 . . . 


18 1 


1915 




1916 











a Calendar years for production in British West Indies; following fiscal years for Canadian imports. 
Figures for 1894-1913 from Statistical Abstract for the British Empire; subsequent figuresf rom U. S. Dept. 
of Agiiculture Yearbook. 

^3 Royal Commission on Trade Relations Between Canada and the West Indies, Mnutes of Evidence 
Taken in Canada, Gt. Brit., Pari. Papers, Jan., 1910, Cd. 4991; Minutes of Evidence Taken in the West 
Indies, Cd. 5370; Minutes of Evidence Taken in London, Sept., 1910, Cd. 5371. 

84 There developed a keen controversy between the West Indian planters on the one hand and the Cana- 
dian refiners on the other, each side accusing the other of monopoUzing the benefits of the preference. 
According to the royal commission appointed later to investigate the situation, dming the three years, 
1907, 1908, and 1909, the Greenock refiners paid, for British West Indian sugars, prices which exceeded the 
current prices of Java sugars by amounts reaching a maximum of S2.04 per ton, and the yearly averages 
of this excess were, respectively, $1.01, $0.79, and ^.70. This demonstrates conclusively that because of 
the Canadian preference West Indian sugar was commanding a higher price in Great Britain than would 
otherwise have been the case. 



CANADA. 703 

The concession to the Canadian refiners was of serious importance 
to the British West Indian sugar trade. The Canadian preference 
resulted in a premium for their sugar over and above what they 
could get for it in the world market only if their total surplus for 
export of sugars suitable for Canadian refining was less than the 
amount required by Canada at the time of export. As shown by 
Table 5, the total Canadian importation of sugar was running close 
to the total British West Indian production in 1909 and 1910. But 
the supplies for the British Columbia refineries could not come con- 
veniently from -the British West Indies, and this was especially true 
before the opening of the Panama Canal' (August, 1914). In 1910 
this concession to the Canadian refiners became an even more serious 
impairment of the Canadian preference because of the suspension of 
the German surtax. Previous to that the supplies of foreign sugar 
available to the Canadian refiner were very limited. Cuban and 
Porto Rican sugar was enjoying a premium in the American market; 
American sugar was above the world-price basis; French West Indian 
sugar entered France at preferential rates; German sugar v/as kept 
out of Canada by the surtax; and Java sugar was too distant from 
the eastern and central Provinces. Practically the only foreign 
sugars available were the Brazilian and Dominican products, and 
shipping facilities were not always at hand at the right time to make 
these readily available. The permission to import a quantity of 
German sugar at the preferential rates greatly lessened the depend- 
ence of the Canadian refiners on the products of the British West 
Indies and made it probable that without close combination on their 
part the West Indian planters would gain only a small part of the 
preference. 

RENEWED NEGOTIATIONS FOR RECIPROCAL PREFERENCE. 

In Canada there was developing a movement in favor of making 
the grant of the Canadian preference conditional upon the receipt 
of return advantages. The controversy between refiners and planters 
also attracted attention to the commercial relations between Canada 
and the British West Indies. In 1907 the Boards of Trade of Toronto, 
Halifax, and St. John sent a commission to the West Indies to in- 
vestigate the trade relations of the colonies. This in turn led to the 
summoning of a general conference at Barbados in 1908, at which 
Canada and most of the British West Indian colonies were repre- 
sented by official delegates. The representatives had no power to 
bind their Governments, the purpose of the conference being to 
secure an exchange of views. Resolutions in favor of reciprocal 
preference and of improved means of communication and transporta- 
tion between Canada and the West Indies were adopted. 

ROYAL COMMISSION TO INVESTIGATE THE COMMERCIAL RELATIONS OF CANADA AND 
THE BRITISH WEST INDIES, 1909. 

In 1908 the Canadian Government, stimulated by the controversy 
between the Canadian refiners and the West Indian planters and by 
a reciprocity offer by Barb ados, ^^ and with a view to avoiding simul- 

8» In 1908, shortly after the termination of the conference, Barbados, with the consent of the imperial 
authorities, enacted a preferential tariff conceding to the products of any British country a reduction of 20 
per cent of the general rates of duty on bacon and hams, bran, butter, cheese, cordage, fish, horses, sulphate 
of ammonia, iron or steel hoops, bars and rods, oats, wood, boots and shoes, soap, beans, and flour. This 



704 COLOXIAL TAEIFF POLICIES. 

taneous negotiations with 16 different colonies, suggested to the 
imperial authorities, whose assent was necessary before any tariff 
legislation of the British Crown colonies could become effective, that 
a royal commission be appouited to investigate the situation and to 
find a basis for the establishment of reciprocal relations. In the 
same year the British Government appointed such a co mm ission, 
consisting of representatives of Great Britain. Canada, and the British 
West Indies. The commission was instructed to find a suitable 
basis for a reciprocal arrangement between Canada and the TVest 
Indies, and with that purpose in view to hold heariugs in England, 
Canada, and the West Indies. The imperial instructions to the 
commission stipulated that whatever basis of understanding was 
reached in the investigation, it must be understood that Great Britain 
must share in any privilege granted in the West Indies to Canada, 
and that due regard must be had to the interests of Newfoundland. 

Re'port of the commission. — In 1909 and 1910 the commission held 
hearings in Canada, England, and the West Indies. Particular atten- 
tion was directed to the controversy regarding the benefits to the 
West Indies of the existing Canadian preference and to the possi- 
bilities of developing the commerce and the means of communication 
and transportation between Canada and the West Indies. In its 
report ^® the commission declared that it appeared to be impossible 
to ascertain accurately the extent to which the Canadian preference 
on sugar inured to the benefit of the West Indian planters. It 
expressed its conviction, however, that the preference had been of 
great benefit to the West Indian producer of sugar, and that, averag- 
ing one year with another, the West Indian producers had received 
from a third to one-half of the preference, or from 10 to 15 cents per 
100 pounds of 96° sugar, above the price which they would have been 
able to obtain without the preference. In addition, the preference 
indirectly created a favored market on the Clyde for West Indian 
su^ar. Even more important than any increase in price, ia the 
opinion of the commission, was the security to the West Indian sugar 
industry which resulted from an assured market for its product in 
Canada. As an advantageous feature of the preference for Canada, 
they noted that the preferential admission of British refined sugar 
from British West Indian raw sugar resulted in competition from 
British refiners, which compelled the Canadian refiner to share with 
the consumer that portion of the preference which was not appro- 
priated by the producer of raw sugar. 

The commission drew attention to the serious impairment to the 
preference which resulted from the concession to the refiners of 
limited importation at preferential rates of foreign sugar, and quoted 
the following figures to support their argument: 

preference was to come into efiect conditioiially upon the reduction of the Canadian preferential rate on 
sugar not over 75" polarlseope to 20 cents per 100 pounds, the general and intermediate rates to remain 
unchanged. Such action \roiiid have raised the amount of rhe Canadian preference on 96" polariscope 
sugar from 31 cents to 42i- cents per 100 pounds. Antigua in the same year submitted to the secretary of 
state for the colonies for his approval a bill for the establishment of a tariff preference on British and Cana- 
dian products. 

86 Gt. Brit. Pari. Papers, Cd. 5359, Sept., 1910. For the publications containing the minutes of evi- 
dence taken by the commission, see footnote on p. 702. 



CANADA, 705 

Averages for five ij ears to March 31, 1909. 

Tons. 

West Indian exports 238, 300 

"Fancy " sugars to United Kingdom (estimated) 40, 000 

Available for Canada 198, 300 

Canadian imports for consumption 193, 210 

Deduct: 

Vancouver imports 28, 520 

Imports at preferential rates by beet refiners (average 1908-9). . . 13, 280 

41, 800 

Available market for West Indies in Canada 151, 410 

If the refiners used to the full their right to import foreign sugars 
at preferential rates to one-fifth of their output, the capacity of the 
Canadian market, the commission pointed out, would be reduced by 
about 31,000 tons to some 120,000 tons, or less than two-thirds of 
the available West Indian surplus. On the other hand, production 
in the West Indies and consumption in Canada were both increas- 
ing. Table 6 (p. 708) is interesting in relation to this aspect of the 
situation. 

Recommendations of the commission. — The commission pointed out 
that there were important political reasons which made it desirable 
that the commercial relations of the British West Indies with Canada 
should be strengthened, and recommended strongly that the West 
Indies grant reciprocal concessions to Canada : 

The geographical position of the West Indian colonies must always tend to throw 
them under the influence of the fiscal system either of the United States or of the 
Dominion of Canada. Attempts have been made from time to time to obtain for 
these colonies special advantages in the markets of the United States, whose proximity 
renders them of special importance to the West Indies. The colonial policy of the 
United States has now finally stopped advance in that direction; it would be unwise, 
except for the gravest reasons, now to appose the natural desire of the West Indian 
colonies for close connection with the northern Dominion.^'' 

The commission formulated a basis upon which Canada and the 
West Indies might reach a reciprocity agreement. Its proposal 
involved the concession by the West Indies of a uniform minimum 
amount of preference. It suggested 20 per cent as a suitable reduc- 
tion from the duties imposed on foreign imports, and that Canada 
in turn should assure to the chief products of the West Indies a 
preferential reduction of 20 per cent from the general tariff rates. 
As a solution of the differences between planters and refiners, it was 
suggested that the concession to the Canadian refiners be withdrawn 
and that the preference on sugar be reduced. The report included a 
list of the products of the West Indies and of Canada upon which 
preferences were recommended. 

The commission reported that Jamaica, Bermuda, the Bahamas, 
and British Honduras differed from the other colonies in respect to 
their relations with Canada, In Jamaica the products of the sugar 
cane had become relatively unimportant, and there appeared a dis- 
Dosition to deny that Canadian preference was of any value to the 
colony. The commercial interests in the colony had close relations 

« Gt. Brit"., Pari. Papers, Sept., 1910, Cd. 5369, p. 21. 



706 COLONIAL TAEIFF POLICIES. 

with the United States; the United States formed the principal, and 
geographically the natural, market for Jamaican products, and there 
was fear in the island that preference to Canada would lead to retalia- 
tion by the United States. Likewise, in the case of Bermuda, the 
Bahamas, and British Honduras, sugar production either was alto- 
gether absent or was unimportant,^^ and in each case the commercial 
relations of the colony were mainly with the United States. Of these 
colonies, Bermuda alone was in direct communication by steamship 
line with Canada, and the exports of Bermuda to Canada were small. 
In British Honduras, as in Jamaica, American commercial interests 
were prominent and influential. For these reasons, none of these 
colonies were sympathetic toward proposals for preferential relations 
with Canada. ^^ 

The commission recommended, however, that any concessions 
granted by Canada to the other colonies in any agreement which 
should be reached should be extended ^Iso to the colonies which 
refused to enter the agreement, the concessions to be withdrawn after 
a limited number of years if they had not then entered the agreement. 
The commission recognized that it was " a cardinal point in the policy 
of Your Majesty's Government that any concession which is made to 
imports from the Dominion should also be extended to like products 
of the United Kingdom." ^^ 

The hearings of the commission in the West Indies occurred shortly 
after the enactment of the Payne- Aldrich Tariff Act in the United 
States with its provision for the application of duties of 25 per cent 
ad valorem over and above the stated duties in the act to imports 
from countries '' unduly discriminating" against American commerce. 
The commission found some anxiety in the West Indies lest a prefer- 
ential arrangement v/ith Canada should lead to the application of 
the American maximum duties to West Indian products. The com- 
mission saw no cause for alarm, however, for — 

It may now be regarded as a settled principle that trade arrangements between 
parts of the British Empire are to be considered matters of a domestic character, which 
can not be regarded as discriminatory by any foreign power. * * * It is worthy 
of note, as appears from the report of the negotiations given to the Canadian Parlia- 
ment by the minister of finance, ^^ that the United States did not treat the Canadian 
preferential tariff as an undue discrimination. It follows that the granting of a 
preference by the West Indies to any part of the British Empire could not be so 
regarded. This is, indeed, the logical conclusion to be drawn from the fiscal arrange- 
ments of other powers, including the United States themselves, with different parts 
of their own possessions. ^- 

THE CANADA-WEST INDIES TRADE AGREEMENT, 1912. 

The recommendations of the royal commission were accepted in 
principle by the majority of the West Indian Legislatures, but not 
by those of Jamaica, Honduras, Bermuda, the Bahamas, and Gre- 
nada.^^ Early in 1912 a conference was held in Ottawa between 

83 The principal exports of Bermtida were vegetables; of the Bahamas, sponges and hemp; and of British 
Honduras,, mahogany and chicle. 

83 See last paragraph on following page. 

90 The commission stated that it had found that this principle received practically universal recognition 
in the West Indies and had never been disputed in Canada, but that in several of the West Indian colonies 
attempts had been made to minimize the benefits which the colonies derived from the Imperial connection. 

81 Arising out of the administration of the United States tariff act of 1909. Report of U, S. TarifT Com- 
mission on Reciprocity and Commercial Treaties, pn. 369 et seq. 

92 Gt. Brit., Pari. Papers. 1910, Cd. 5369, p. 29. 

S3 Grenada took no part in the negotiations of 1912, but ratified the agreement in 1913. 



CAISFADA. 707 

Canada and representatives of the colonies ^'^ favorable to* the policy 
of reciprocal preference to draft an agreement embodying this policy. 
The basis of the negotiations followed closely the recommendations 
of the commission. ^^ 

The chief consideration sought by the West Indian representatives 
was an adequate preference to sugar and the assurance of its continu- 
ance for a long enough period to give promise of stability to the cane- 
sugar industry. They demanded that the concession to the Cana- 
dian refiners of the importation of foreign sugar at preferential rates 
should not be renewed when the term of the concession expired in 1914. 
They agreed if tliis were done to accept a smaller preference on their 
sugar. Trinidad and St, Lucia insisted strongly on a preference on 
cocoa beans, which were then on the Canadian free list; St. Vincent 
requested a reduced duty on arrowroot ; and Dominica and Montserrat 
asked for preferences on limes and lime juice. A basis for mutual 
agreement v\^as soon reached. It was agreed that for a limited time 
the benefits of the agreement were to be enjoyed by Newfoundland 
and by those West Indian colonies which did not become parties to it. 

Ratification of tlie agreement. — Canada ratified the agreement 
reached at the Ottawa conference by the West Indian trade agreement 
act of May 24, 1913,^® which provided that the West Indian products 
specified in the agreement should be admitted into Canada in accord- 
ance with the terms of the agreement, or at the rates of the Canadian 
preferential tariff, w^hichever was lower, and v/iiich provided further 
that the West Indian colonies not parties to the agreement should 
enjoy the Canadian concessions for three years from the date of the 
coming into effect of the agreement. The Canadian law also provided 
that the concessions granted by Canada in the agreement should be 
extended to the United Kingdom and to such other British colonies 
or possessions as were receiving the Canadian preference. 

The trade agreement of 1912 was ratified in that year or in the 
following by all the West Indian colonies which had been represented 
at Ottawa, namely: Antigua, Barbados, British Guiana, Dominica, 
Montserrat, St. Kitts (St. Christopher-Nevis), St. Lucia, St. Vincent, 
and Trinidad. Grenada also became a party to the agreement on 
May 19, 1913, The provisions of the agreement were by proclama- 
tion made effective on June 2, 1913, in all the colonies parties thereto. 
The Bahamas, Bermuda, British Honduras, Jamaica, Turks and 
Caicos, and the Virgin Islands took no steps to enter the agreement. 

Differing trade rdations of ^Yest Indian colonies. — Table 6, which 
shows the imports and exports by countries of the various West 
Indian colonies for the year 1912, helps to explain why one group of 
the colonies assented to the agreement and the other did not. 

91 Trinidad, British Guiana, Barbados, St. Lucia, St. Vincent, Antigua, St. Christopher, Dominica, and 
Montserrat. 

9^ A detailed report of the negotiations and the text of the agreement are given in Canada: Sessional 
Paper, No. 55, 1913, Canada- West Indies conference, 

93 The act met with little objection. The value of the arrangement was minimized by some of the 
opposition members in the House of Commons, and the agreement to impose duties on cocoa beans and 
lime juice was particularly criticized. The critics of the agreement pointed out that the existing preference 
was greater in amount than that pledged to the West Indies in the agreement, and that upon nearly all 
the articles upon which the West Indies were to grant a preference Canada competed with Great Britain, 
which also was to receive the preference; they claimed that the superiority of the British shipping con- 
nections would enable Great Britain to gam the chief benefit from the West Indian preferences. Mr. 
Micah Clark, a Liberal free trader, declared that tmder the agreement, "preferential empire building means 
that West Indian horses will get hav more easily by Canadian human beings getting cocoa with more 
difficulty." (Canada, House of Comraons Debates, Jan. 23, 1913, p. 2099.) Mr. G. E. Foster, the Canadian 
minister of finance, who had played an important part in the negotiation of the agreement, declared that 
the competition which Canadian trade had to meet in the West Indies came chiefly from the United States, 
and that the agreement promised to bring substantial benefits to Canadian trade. 



708 



COLONIAL TARIFF POLICIES. 



Table 6. — Trade of the British West Indian Colonies, 1912.^ 



[In thousands of dollars. 
IMPORTS. 





From 

aU 
coun- 
tries. 

■ 


From Canada. 


From the United 
Kingdom. 


From the United 
States. 




Value. 


Per cent 
of total. 


Value. 


Per cent 
of total. 


Value. 


Per cent 
of total. 


Not parties to the Canada-Vv^est ImMes 
agreement: 2 
Jamaica 2 


S14,845 

3,497 

3,101 

1,743 

135 


3 SI, 615 

8 

466 

62 


3 10.9 

.2 

15.0 

3.6 


S6,489 

668 

831 

411 

30 


43.7 
19.1 
26.8 
23.6 
22.1 


4 $6, 741 

1,328 

1,721 

1,205 

76 


4 45 4 




38.0 


Bermuda. 


55.5 




69.1 




15 10.8 


56.4 










Total2 


23, 321 


2,166 


9.3 


8,429 


36.1 


11,071 


47.5 






Parties to the Canada-West Indies 
agreement: 
Trinidad and Tobago s 


12,624 
8,289 
7,132 
3,118 
1,535 
1,354 
618 


6 928 
547 
894 
6 318 
60 
59 
115 


6 7.4 
6.6 

12.5 

6 10.2 

3.9 

4.3 

18.7 


4,596 

4,372 

2, 723 

1,227 

348 

554 

256 


36.4 

52.8 
38.2 

22:7 
41.0 
41.5 


3,988 

2,064 

2,076 

1,071 

954 

456 

124 




31.6 


British Guiana 


24.9 




29.1 




34.3 


St. Lucia 


62.2 




33.7 


St. Vincent 


20.1 






Total.. 


34,670 
57, 991 


2,922 

5,088 


8.4 
8.8 


14,078 
22,507 


40.6 

38.8 


10,733 1 31.0 
21,804 1 37.6 


Grand total, aU British West In- 









EXPORTS. 





ToaU 
coun- 
tries. 


To Canada. 


To the United 
Kingdom. 


To the United 
States. 




Value. 


Per cent 
of total. 


Value. 


Per cent 
of total. 


Value. 


Per cent 
of total. 


Not parties to the Canada-West Indies 
agreement: 2 
Jamaica ^ 


$12, 518 
1,116 

478 
1,325 

124 


3S879 


37.0 


$1,703 

278 

8 

269 


13.6 

24.9 

1.6 

20.3 


4 $9, 936 

774 

463 

642 

96 


<79.4 


British Honduras 


69.4 




3 

6 
16 


.6 

.5 

13. 1 


97.0 


Bahamas 


48.5 


Turks and Caicos Islands 


77.6 










Total 2 


15, 561 


904 


5.8 


2,258 


14.5 


11,911 


76.6 






Parties to the Canada-West Indies 
agreement: 
Trinidad and Tobago ^ 


9,560 
7,674 
3,725 
2,579 

528 
1,350 

504 


6 1,047 

3,521 

2,557 

6 982 

41 


6 11.0 

45.9 

68.6 

6 38.1 

7.8 


2,474 
3,032 
280 
1,160 
330 
825 
371 


25.9 
39.5 
7.5 
45.0 
62.5 
61.1 
73.6 


3,652 
680 
326 
234 

11 
266 

13 


38.2 


British Guiana ... 


8.9 




8.8 


Leeward Islands . . 


9.1 


St. Lucia 


2.2 




19.7 


St Vincent 


15 


2.9 


2.6 






Total 


25,921 
41,482 


8,163 
9,067 


3L5 
21.9 


8,471 
10, 729 


32.7 
25.8 


5,183 
17,094 


20.0 


Grand total, all British West In- 


41.3 







1 Great Britain: Colonial Statistical Tables, 1912. 

2 Does not include the dependency, the Cayman Islands. Total imports year ending Sept. 30, 1912, 
£28,444; total exports, £12,323. Countries of origin and destination not stated. 

3 AU British possessions. 
* All foreign cotmtries. 

5 Imports for home consumption. 

6 British North America. 



I 



CANADA. 709 

A country is generally more concerned about the markets for its 
products than about the sources of its imports, and it was in the 
markets for their exports that there was the most striking contrast 
between the two groups. The United States was the market for 76.6 
per cent of the total exports of the colonies remaining outside the 
agreement, but took only 20 per cent of the exports from the other 
colonies. This difference in circumstances operated in two ways to 
keep the first group of colonies out of the agreement; it gave them 
more cause to fear serious injury from any possible American retalia- 
tion, and it freed them from dependence on a favored market in 
Canada or elsewhere in the British Empire for the marketing of the 
greater part of their produce. 

Terms of the agreement. — The agreement between Canada and the 
West Indian colonies contained the following provisions : 

1. On all goods enumerated in schedule A, ^^ being the produce or manufacture of 
Canada, imported into any of the above-mentioned colonies, the duties of customs 
shall not at any time be more than four-fifths of the duties imposed in the colony on 
similar goods when imported from any foreign country, provided that on flour the 
preference in favor of Canadashall not at any time be less than 12 cents per 100 pounds, 

2. On all goods enumerated in schedule B,^^ being the produce or manufacture of 
any of the above-mentioned colonies, imported into the Dominion of Canada the 
duties of customs shall not at an> time be more than four-fifths of the duties imposed 
on similar goods when imported from any foreign country, provided (a) that on raw 
sugar not above No. 16 Dutch sitandard in color, and molasses testing over 56° and 
not over 75° by the polariscope, the preference in favor of the colony shall not at 
any time be less than 4| cents per 100 pounds, and for each additional degree over 
75° the preference shall not be less than one-half cent per 100 pounds. 

(6) On all goods enumerated in schedule C ^^ hereto, being the produce or manu- 
facture of anj- of the above-mentioned colonies, imported into the Dominion of Canada 
there shall be no duties of customs; but on the like goods, when imported from any 
foreign country, the duties of customs shall not be less than those therein set out. 

(c) The act of the Parliament of Canada entitled ''An act respecting duties of 
customs," assented to on the 12th day of April, 1907, as amended by chapter 10 of 
the acts of the Parliament of Canada, 1909, shall, in addition to the amendments 
necessary to give effect to the foregoing provisions of this section, be amended as 
follows : 

(1) Tariff item 135c to be repealed. 

(2) Tariff item 137a to be repealed. 

(3) So as to provide that upon arrowroot the produce of any of the said colonies 
imported into the Dominion of Canada the duties of customs shall not exceed 50 cents 
per 100 pounds. 

{d) It is understood that the Canadian customs tariff item 135b ^ shall not be 
affected by section 2 of this agreement before the end of December, 1914, when the 
said tariff item expires, and that the said tariff item shall not be thereafter continued 

97 Schedule A, consisting of Canadian goods which were to enjoy the benefits of the customs preferential 
tariff when imported into the West Indian colonies, contained among other items the following: Fish, meats, 
cereals, bituminous coal, butter, cheese, lard, hay, live stock, brooms, boots and shoes, cordage, agricultural 
implements and certain other machinery, certain manufactures of iron and steel, vehicles, manufactures 
of India rubber, paints, paper, vegetables, soap, furnitin-e, lumber, pianos and organs, trunks and vahses, 
cement, giassv/are, nickel-plated ware, calcium carbide, Mnseed oil cake, fruits, and condensed milk. See 
p. 363 lor the reduction of duties made by certain West Indian colonies beyond the terms of the agreement. 

93 Schedule B, setting forth the West Indian products which were to enjoy the benefits of the customs 
preferential tariff when imported into Canada, contained, among other items, sugar, fresh fruits, coconuts, 
asphalt, coffee, cotton and cotton seed, rice, petroleiun and kerosene, copra and coconut oh, rubber, bulbs, 
logwood, annatto, turtle shell, spices, arrowroot, salt, sponges, fresh vegetables, tapioca, honey, essential 
oils, cattle food containing molasses, peanuts, uncut diamonds, timber and lumber, vanilla beans, bay 
leaves, papaine, and nonalcoholic fruit juices. 

99 The following goods were to enter Canada free from the West Indian colonies, but v.^hen imported 
from any foreign country were to pay duty at a rate not less than that indicated below: 

Duty when imported from any foreign 
Goods. country. 

Cocoa beans, not roasted, crushed, or ground Not less than 75 cents per 100 pomids. 

Lime juice, raw and concentrated, not refined Not less than 5 cents per gallon. 

Limes, fresh Not less than 10 per cent ad valorena. 

1 1, e., the concession to Canadian refiners regarding the importation of foreign sugar. See pp. 701, 704. 



710 



COLONIAL TAEIFF POLICIES. 



while this agTeement is in force. It is also understood that in determining the rates 
of duty payable on goods under said section 2 the rates proA-ided for in said tariff item 
]35b shall not apply. 

By amendatory acts of June 6, 1913, and August 22, 1914, the 
Canadian tariff was revised so as to make specific provision for such, 
changes in duties as were necessary to bring the stipulations of the 
agreement into effect both for the British West Indies and for all 
other British countries entitled to preferential treatment in Canada. 
Table 7 indicates the principal changes made in the Canadian tariff 
following upon the Canada-West Indies agreement. The table does 
not present those preferential rates which had previously been enjoyed 
by the British West Indies and which were affected by the agreement 
only in that it guaranteed their continuance through a term of 10^ 
years. 

Table 7. — Principal changes in Canadian tariff as result of Canada-West Indies agree- 

mentJ 



Tar- 
iff 
No. 



135 
134 

136a 

39b 

.77a 

101a 
153 



Article. 



Old rates, act of New rates, acts of 
1907. I 1913-14. 

I 



Preferen- 
tial. 



General. 



Preferen- 
tial. 



General. 



Sugar, n. o. p., not above No. 16 Dutch standard in 

color, testing 96° by the polariscope, per 100 pounds. 
All sugar above No. 16 Dutch standard in color, and all 

refined sugars, testing 100° by the polariscope, per 100 

pounds. 
Molasses of cane, testing by the polariscope under 35°, 

but not less than 20°, per gallon. 

Arrowroot, per pound 

Cocoa beans, not roasted, crushed, or ground, per 100 

pounds. 
Limes 



52^ cents 
84 cents 2 

Free 

1 cent . . . 
Free 

.-do 



Lime juice, ravv and concentrated, not refined, per gallon . I . . .do. 



83i cents 

$1.26.... 

Free 

1 J cents . 
Free 

..do 

...do 



$1.03i- 

$1,642. 

Free.. 

i cent . 
Free . . 

...do... 

...do... 



$1,371. 
$2.09. 

1§ cents. 

1 cent. 
75 cents. 

10 per 

cent. 
5 cents. 



1 Amending acts of Jime 6, 1913, and Aug. 22, 1914. 

2 Only when manufactured from raw sugar produced in the British colonies and possessions. 

The table shows that, though the Canada-West Indies agreement 
required Canada to grant a preference of only 15 cents per 100 pounds 
on sugar of 96°, the preference accorded was increased by legislation 
from 31 cents to 33 f cents per 100 pounds.^ 

Under the customs war revenue act of 1915 ^ the West Indies 
shared in the increased preferences established by imposing an addi- 
tional 7i per cent ad valorem upon foreign products and 5 per cent 
upon those entitled to preferential rates. The preferences upon 
West Indian molasses, rum, coconuts, grapefruit, and onions were 
thus increased, but sugar, cocoa beans, limes, lime juice, and arrow- 
root were not subjected to the special war duties. 



2 The agreement was to come into force upon a date to be agreed upon after its ratification by the Legis- 
latures of Canada and the West Indian colonies. It was then to remain in force for 10 years and thereafter 
unless denounced. One year's notice was required for denunciation. See arts. 7 and 8 of the agreement, 
which are practically identical with arts. 17 and 18 of the agreement of 1920. 

3 The extension on February 1, 1913 (see p. 695) of the Canadian preferential rates to Fiji and Mauritius 
Involved little or no diminution in the value of the Canadian preference to the British West Indies. Mauri- 
tius was too far distant from Canada. Fiji was already an important source of supply for the Canadian 
far west. But West Indian sugar did not compete beyond the eastern and central Canadian Provinces, 
and Fijian sugar could not bear the transportation costs necessary to bring it into competition with West 
Indian sugar. It was exoected in Canada that the extension of the preference to Fiji would enable its 
sugar largely to replace Javan and Peruvian sugar in British Colombia, but there was no expectation that 
it would be brought east of the Rocky Mountains. 

^ See p. 685. 



CANADA, 711 

THE CANADIAN-WEST INDIES TRADE AGREEMENT, 1920. 

At a conference of representatives of Canada and of West Indian 
Governments^ held in Ottawa in June, 1920, an agreement was drawn 
up looking to the extension of trade and communication between 
these colonies. It was laid down as a basic principle of the agree- 
ment that any preference decided upon should extend to all articles 
liable to customs duty in the various interested colonies subject to 
certain exceptions arranged to suit particular colonies. With the 
exception of the articles to transfer oranges, paddy, sisal hemp, and 
salt for the use of the fisheries from the free to the dutiable list, the 
representatives of the Canadian Government acquiesced in whole 
or in part in all of the requests of the West Indian delegates. 

The first nine articles of the agreement between Canada and the 
West Indian colonies relate to preferential tariffs. They are as 
follows : 

Article I. The Dominion of Canada affirms the principle of granting a preference 
on all goods being the produce or manufacture of any of the colonies aforesaid imported 
into Canada which are now subject to duty or which may be made subject to duty 
at any future time. 

Article II. Subject to the special provisions of Article III, the duties of customs 
on all goods (other than tobacco, cigars, cigarettes, and spirituous or alcoholic liquors) 
being the produce or manufacture of any of the colonies aforesaid imported into 
Canada, which are now subject to duty or which may be made subject to duty at 
any future time, shall not at any time be more than 50 per cent of the duties imposed 
on similar goods when imported from any foreign country. 

Article III. The Dominion of Canada will grant to the articles specified in 
schedule A,^ being the produce or manufacture of any of the colonies aforesaid im- 
ported into Canada, the preferential treatment indicated in respect of each such 
article in the said schedule A. _ 

Article IV. The colonies aforesaid severally affirm the principle of granting a 
preference on all goods being the produce or manufacture of Canada imported into 
such colonies which are now subject to dutj or which may be made subject to duty 
at any future time. 

Article V. Subject to the special provisions of Articles VI and VII, the duties of 
customs on all goods (other than tobacco, cigars, and cigarettes) being the produce 
or manufacture of Canada imported into the colonies aforesaid, w;hich are now subject 
to duty or which may be made subject to duty at any future time, shall not at any 
time be — 

(a) In the case of Barbados, British Guiana, and Trinidad more than 50 per 

cent; 
(&) In the case of British lionduras, the Leeward Islands, and the V/indward 

Islands, more than 66f per cent; 
(c) In the case of Bermuda and Jamaica, more than 75 per cent; and 
{d) In the case of the Bahamas more than 90 per cent [but see p, 364.] — 
of the duties imposed on similar goods when imported from any foreign country. 

Article VI. The colonies aforesaid will grant to thearticles specified in schedule 
B,^ being the produce or manufacture of Canada, im^ported into the said colonies, 
the preferential treatment indicated in respect of each such article in the said 
schedule B. 

Article VII. In the case of the Bahamas the provisions of Article V {d) shall not 
apply to wines, malt liquors, spirits,, spirituous liquors, liquid medicines, and articles 
containing alcohol. 

5 Delegates from all the West Indian colonies participated: The Bahamas, Barbados, Bennuda, British 
Guiana, Honduras, Jamaica, Leeward Islands, Trinidad, and the Windward Islands. 

« Schedule A specified the preferential treatment to be given on the importation of sugar, cocoa beans, 
lime juice, limes, arrowroot, and coconuts. For the amount of preference, see Table 8 on the next page. 

7 Schedule B. 

Flour. Preference of not less than 1 shilling per barrel or bag of 196 pounds. 

Spirits, i. e., brandy, gin, rum, whisky, unenumerated, potable if tested. Preference of not less than 
2s. 6d. per gallon of the strength of proof. 

Spirits, perfumes, unenumerated, potable, if not tested. Preference of not less than 2s. 6d. per liquid 
gallon. 

Wine, beer, and ale. Duty not to exceed four-fifths of full rate. 



712 



COLONIAL TARIFF POLICIES. 



Article VIII. The Governments of any_ of the colonies aforesaid on gi^ing six 
months' notice may pro^ide that to be entitled to the concessions granted in Arti- 
cles V and VI the products of Canada shall be conveyed by ship direct without trans- 
shipment from a Canadian port into the said colony or by wa\ of one of the other 
colonies entitled to the advantages of this agreement. 

The Government of Canada on giving six months' notice may pro\T.de that, to be 
entitled to the concessions granted in Articles II and III, the products of any of the 
colonies aforesaid shall be conveyed by ship direct without transshipment from the 
said colony or from one of the other colonies entitled to the advantages of this agree- 
ment into a Canadian port: Proiided, That, should the discretion recognized in this 
article be at any time exercised by the Government of Canada, provision shall be 
made, in all contracts entered into with steamships_ subsidized by the Dominion and 
the colonies aforesaid, and pljdng between ports in Canada and ports in the said 
colonies, for an effective control of rates of freight. 

Article IX. This agreement shall not interfere with any existing preference or 
with the granting of any future preference by the Dominion or by any of the colonies 
aforesaid to any other part of the British Empire or with any existing preference or the 
granting of any future preference by the said colonies among themselves. 

Increojsed 'preferences of the new agreement. — The principal West 
Indian products upon which Canada has granted increased prefer- 
ences in the new agreement are sho\^Ti in Table 8. 

Table 8. — Comparison of preferential rates of agreements of 1912 and 1920. 



Article. 



Preference under- 



1912 agreement. 



1920 agreement. 



Sugar, at 96° polarization,i per 100 pounds... j SO.lo (S0.33|)2... 

Rum, per proof gallon 

Cocoa beans, per 100 pounds 

Lime juice, ravv and concentrated, per gallon. 

Limes, fi-esh, ad valorem 

Arrowroot, per pound 

Coconuts (imported dii'ect), per hundred 

Coconuts, n. o. p., per hundred 

Grapefi-uit, per 100 poxinds 

Onions : 

other products Listed in the agi'eement 



AU other articles dutiable in Canada. 



$0.753. 

S0.05 3 

10 per cent 3. 

S0.005 

S0..504 

$0.504. 



15 per cent 

20 per cent reduction from 
general tariff rate. 



S0.837 

SO. 60 (S2) 2 

S1.50 

SO. 10 (S0.15) 3 

15 per cent ^ 

SO.Ol 

S0.75 3 . 

S0.50 

S0.50 

30 per cent » 



)0 per cent of the general tar- 
iff rate. 



^ The amount of preference pledged to West Indian raw sugar in the agreement of 192^ is as follows: 



Degrees of polarization. 




Not exceeding 76. 
Not exceedijig 77. 
Not exceeding 78. 
Not exceeding 79. 
Not exceeding 80. 
Not exceeding 81. 
Not exceeding 82. 
Not exceeding 83. 
Not exceeding 84. 
Not exceeding 85 . 
Not exceeding 86. 
Not exceeding 87. 



46.080 
47. 616 
49. 1.52 
50.688 
52. 224 
53.760 
55.296 
56.832 
58. .560 
60. 288 
62. 016 
•63.744 



Not exceeding 
Not exceeding 
Not exceeding 90. 
Not exceeding 91. 
Not exceeding 92. 
Not exceeding 93. 
Not exceeding 94. 
Not exceeding 95. 
Not exceeding 96. 
Not exceeding 97. 
Not exceeding 98. 
Exceeding 98 



72. 192 
74.496 
76.800 
79. 104 
81. 408 
83.712 
86.016 
88.320 
96.000 



The customs tariff of Canada shall be amended so as to provide that sugar above No. 16 Dutch standard 
in color, when imported by a recognized sugar refiner for refining pm'poses only, upon evidence satisfac- 
tory to the minister of customs, shaU not be subject to these duties — i. e., the duties on sugar over No. 16 
Dutch standard specified in item 134 of the Canadian tariff. 

The Canadian Government, faiUng the adoption of the polariscope standard for tariff classification, 
will use its best endeavors to estabhsh a more stable color standard than the present Dutch standard: 
Provided, That sugar as defined under item 134 shall receive a preference of not less than 25 per cent of the 
duty charged on foreign sugar. 

2 The rates in parentheses are those granted by legislation in cases in which the minimum preference 
pledged in the agreement was exceeded. 

3 Free admission for the West Indian product as weU as differentials of the amounts named was pledged 
for the articles indicated. 

* The amount of the preference on West Indian coconuts was the same whether imported direct or 
otherwise, but the rates on coconuts imported direct were lower than those imported otherwise. 
6 On the Canadian free list, not included In the agreement. 



CAI^ADA. 713 

A bill to approve the Canada- West Indies agreement was intro- 
duced on April 5, 1921, and on May 3 became law. The act, which 
incorporated the West Indian trade agreement without change or 
extension of the preferences was to come into force on a date to be 
proclaimed." But on May 10 the introduction of the annual budget, 
made provisionally effective, not only the rates agreed upon but 
two rates which gave to West Indian products greater preferences 
than those specified in the agreement, nam^ely, $2 per proof gallon 
upon rum and $0.15 per gallon on lime juice. ^ These changes 
became law on June 4, 1921, 

Increased preference on sugar. — Since the establishment of a 
preferential tariff in Great Britain in 1919 much of the West Indian 
sugar has gone to Great Britain. The preference there has been 
greater than that accorded by Canada prior to May 3, 1921. Owing 
to the greater preference granted in Great Britain, the representative 
of British Guiana at the Canada- West Indies conference of 1920 
urged that a large preference should be granted by Canada to West 
Indian sugar in order to attract West Indian sugar to Canada and 
thus aid in providing return freight for steamers trading between 
Canada and the West Indies. The agreement shows that Canada 
granted this increase, and, by raising the amount of the preference 
from $0.33i to $0,837, outbid the preference by Great Britain of 
$0.81 per hundred pounds.® In the revision of the rates which 
followed immediately after the ratification of the agreement the 
protection afforded to Canadian refiners, while increased as against 
non-British refiners, was materially reduced as against British 
refiners. Indeed, if the Canadian refiner uses foreign raw sugar and 
the British refiner uses colonial raw sugar the gross protection is now 
only about $0.10 per hundred pounds and the net tariff advantage 
lies with the British refiner to the extent of 1 or 2 cents per hundred 
pounds. Table 9 shows the Canadian rates on typical sugars since 
the establishment of the preferential policy and brings out the 
steady increase in the amount of the preference to the West Indian 
producer and to the British refiner of colonial raw sugar, together 
with the fluctuations in the amount of protection for Canadian 
refiners, particularly against British refiners of colonial raw sugar. 

a The proclamation was issued on Aug. 24 (Canada Gazette, Aug. 27) setting Sept. 1 as the date on 
which the agreement became effective. This proclamation omits Bermuda, which has not ratified the 
agreement. 

8 It may be noted that, with the exception of rum, the preferences which Canada has granted in 1920-21 
to the West Indies are much greater, if m.easuj:ed by the percentage of the general duties remitted, than 
those granted to Great Britain. This is due to the fact that the West Indies are interested in articles not 
produced in Canada and upon which comparatively lo%v revenue duties are levied, whereas Great Britain 
is interested primarily in reductions from Canadian protective duties on manufactured products. While 
the m.ost important of the exported products of the West Indies are included among the articles enumer- 
ated in the trade agreement, aU minor articles receive a 50 per cent preference, and therefore occasionally 
the same article may pay duty at a lower rate when produced in the West Indies than when produced in 
Great Britain. This is contrary to the principle long maintained by the British colonial office (see p. 661), 
but is an exception of no significance. 

9 Sir George Foster stated " Obviously a preference would be of little use to the British West Indies 
unless it came close to or a little bit in advance of the preference which was offered by the old country, and 
as a matter of fact, in schedule A, as regards the first item of sugar, the extended list of preference for each 
degree of polarization is a little shade higher than the preference which has been given by Great Britain 
for the same degree of polarization on the importation of West Indian sugars into the old country." The 
British preference is equal to $0.81 per 100 pounds at prewar rates of exchange. Since the preferences in 
Great Britain and Canada are specific amounts of their respective currencies, the greater depreciation of 
the pound sterling makes the present difference between the two preferences greater than that shown in 
the text. For example, when the Canadian dollar shows a depreciation from prewar exchange rates of 
10 per cent and the pound sterling of 20 per cent, the value of the two preferences in United States cur- 
rency is about $0.75 and $0.65 per 100 pounds, respectively. 



714 



COLONIAL TAEIFF POLICIES. 



Table 9. — Canadian preferences on sugar, 1897-1921. 
[Per 100 pounds.] 



Tariff 
No. 


• 
Kind of sugar. 


1897 


1907 


1914 


1921 


135 


Raw sugar of 96°:! 

(a) G eneral rate ; 


SO. 71| 


SO. 831 
.52J 


$1,371 
1.03f 


$1 68712 




(h) Preferential rate 


85 




Differential in favor of West Indian producers 

Refined sugar, 100°:- 

(c) General rate 






.231 


.31 


.331 


. 83712 


134 


1.26 

.84 


1.26 

.84 


2.09 
1.64 


2 39 




id) Preferential rate (for sugar refined from British 
colonial raw) 

Differential in favor of British as compared to 
foreign refiners 


1.79 




.42 


.42 


.45 


60 




Gross protection 3 against foreign refiners ^ in favor of 
Canadian refiners: 
(1) Using colonial sugar (c-&). 






.784 
.54i 

.361 
.12i 


.73^ 
.42J 




1 54 






.70288 




Gross protection 3 against British refiners using British 
colonial raw sugar in favor of Canadian refiners: 
C3) Using colonial raw (d-5) 


25 




(4) Using foreign raw (d-a) . . . 


10288 









1 Revenue duty, also protecting Canadian beet sugar. 

2 Par. 134 begins: "All sugar above No. 16 Dutch standard in color, and all refined sugar of whatever 
kinds, grades, or standards, not covered by tariff item No. 135, when not exceeding 88° of polarization 
per 100 poimds," $1.50 under the preferential schedule and S2 under the general tariff. The general rate 
rises by S0.02, $0.03, or $0.04 per degree, reaching $2.30 at 98° and ending with $2.39 for polarizations in excess 
of 98°. The preference in each case is one-fourth of the general rate, or a fraction of a cent more. The 
refined or partly refined sugars of the West Indies above No. 16 by the Dutch color test also enter Canada 
at these rates. Sir George Foster, in introducing the biU to make etfective in Canada the West Indian 
trade agreement, said: " On yellow crystals which are imported for general consumption and not as refin- 



ing sugars the preference [Is] to be not less than 25 per cent, and after going over the matter carefully 
felt that 25 per cent would be a fair preference to give them and that under that preference they coi 
possibly make some way in our market." But, as the preference accorded in the United Kingdom makes 



no distinction as regards color, the hghter West Indian sugars receive a greater preference in Great Britain 
than in Canada. On 93° sugar above No. 15 Dutch standard the British preference is, at prewar exchange 
rates, $0.81 per 100 pounds, while the Canadian preference is only $0.56, rates which at current amounts 
of depreciation approximate S9.65 and $0.50 in United States currency. (House of Commons Debates, 
Apr. 19, 1921, p. 2338.) 

3 Since the Canadian refiner must pay the duty upon about 107 pounds of raw sugar in order to produce 
100 pounds of refuied sugar, the subtraction of (a) or (6) from (c) or (d) gives only the gross protection to 
the Canadian refiner; the correction necessary to arriA'e at the net protection is approximately 7 per cent 
of the rate of duty on the raw material. The net protection against British refiners using colonial raw 
material is thus reduced for Canadian refiners using colonial raw material from 25 cents per hundred pounds 
to about 19 cents, while if the Canadian refiner uses foreign raw sugar the gross protection of about 10 cents 
per hundred pounds is found to disappear entirely. 

^ Or British refiners using foreign raw sugars. 

All of the delegates from the sugar-producing colonies in the West 
Indies advocated the abolition of the Dutch color standard as far as 
such standard affected the assessment of custom.s duty on West 
Indian sugars, asking that such duties should be charged according 
to the degrees of polarization. The Canadian Government found 
itself unable to accede to this request of the West Indian delegates, 
alleging that to do so would seriously affect the Canadian refining 
industry, which had been built up under the present tariff S3^stem 
"and which w^as now in a position to refine all sugar required for 
domestic consumption with a margin for export. Out of the dis- 
cussion resulted the agreement set forth in the footnote to Table 7.^^ 
The dissatisfaction which has been expressed in the West Indies with 
the agreement of 1920 has been due chiefly to the failure of Canada 
to abolish the Dutch color standard. 

Provision for improved steamship service. — The agreement provides 
for an extended steamship service, w^th a weekly service between 



10 J. Mcintosh Reid in the Daily Argosy, Georgetown, British Guiana, Aug. 6, 1920. 



CANADA. 715 

Canadian ports and the eastern group of the British West Indies and 
a fortnightly service between Canadian ports and the western group. 
The various colonies concerned will contribute toward the necessary- 
subsidies for the eastern service. Vessels for the western service are 
provided by Canada. If the service proves unremunerative, the 
three western colonies — the Bahamas, British Honduras, and Ja- 
maica — will contribute, within certain restrictions, 25 per cent of 
the loss.^^ 

VII. Other Preferential Provisions. . 

THE PROVISIONS FOR BRITISH PREFERENCE IN THE CANADIAN TARIFF 

LAW. 

The tariff now (October, 1921) in effect in Canada is the customs 
tariff of 1907 and subsequent amendments thereof. 

11 The provisions relative to steamship services are as follows: 

STEAMSHIP SERVICES— EASTERN GROUP. 

Article X. The Government of Canada will use its best endeavors to arrange for a mail, passenger 
and freight steamship service to come into effect as soon as possible, and in any case within three years, 
between Canada, Bermuda, the Leeward Islands, the Windward Islands, Barbados, Trinidad, and 
British Guiana, on the following hnes: 

(1) Steamers shall sail weekly from St. John or HaUfax, calhng one week on the outward passage at 
Bermuda, Barbados, Trinidad, and British Guiana, and on the homeward passage at Trinidad, Grenada, 
St. Vincent, Barbados, St. Lucia, Dominica, Montserrat, Antigua, Nevis, St. Kitts, and Bermuda; on 
alternate weeks calling on the outward passage at Bermuda, St. ICitts, Nevis, Antigua, Montserrat, 
Dominica, St. Lucia, Barbados, St. Vincent, Grenada, Trinidad, and British Guiana, and on the home- 
ward passage at Trinidad, Barbados, and Bermuda. 

(2) The steamers shall be from 5,000 to 6,000 tons gross, capable of maintaining an ocean speed of 12 
knots, and providing accommodation for 100 first-class, 30 second-class, and 100 steerage or deck passengers, 
and shall be provided with 'tween decks. 

Article XL The Government of Canada will stipulate in any contract entered into for such steamship 
service that — 

(1) There shall be reasonable proportionate allocation of passenger and cargo. accommodation between 
the colonies mentioned in Article X. 

(2) There shall be no unfair differentiation in rates of freight against the smaller colonies as compared 
with the rates to larger colonies situated at a similar distance from St. John or HaUfax. 

(3) The steamers shall be so constructed that, so far as the traffic warrants, cold storage shall be pro- 
vided if this can be secured without unreasonable additional cost. 

Article XII. If a subsidized steamship service is arranged for, the Government of Canada will en- 
deavor to secure the cooperation of the owners of such steamship service toward the provision of hotels- 
and bungalows in the colonies, the Governments of the colonies being prepared on their part to offer such 
facihties as may be practicable both as regards sites and financial assistance. 

Article XIII. The representatives of the colonies mentioned in Article X undertake to recommend 
to their Governments that these Governments shall contribute toward such subsidized steamship service, 
when established, in the following amounts annually: 

Barbados, not less than £5, 000 

Bermuda, not less than 2, 000 

British Guiana, not less than 7, 500 

Leeward Islands, not less than 2, 500 

Trinidad, not less than 7, 500 

Windward Islands, not less than 2, 500 

27, 000 
Article XIV. Pending the estabUshment of such service the Government of Canada will use its best 
endeavors to maintain a fortnightly service on the existing Unes and to supplement it with such addi- 
tional freight or passenger and freight vessels as the trade may require. 

STEAMsmp services — western group. 

Article XV. The Government of Canada, subject to the adoption by the Governments concerned 
of the recommendation embodied in Article XVI, undertakes to provide as soon as possible, and in any 
case not later than the 1st of January, 1921, a fortnightly freight, mail, and passenger steamship service 
between Canada, the Bahamas, Jamaica, and British Honduras, on the following lines: 

(1 ) The steamers shall not be less than 3,500 long tons dead- weight, shall have an ocean-going speed 
of not less than 10 knots, and shall have accommodation for from 15 to 20 first-class passengers, and shall 
be provided with 'tween decks, and, so far as the traffic warrants, with cold storage if this can be secured 
with reasonable cost. 

(2) The steamers shall sail from such Canadian ports as freight conditions require and shall proceed 
to Behze in British Honduras, calUng at Nassau in the Bahamas, and at such port or ports in Jamaica 
as may be necessary, and shall call on the return voyage at such port or ports in Jamaica as may be neces- 
sary and at Nassau. 

Article XVI. The representatives of the colonies mentioned in Article XV undertake to recommend 
to their Governments that these Governments shall, if the service proves unremunerative, contribute 25 
per cent of any loss: Provided, That the amounts contributed shall not exceed, in the case of the Bahamas, 
the sum of =€3,000 per annum; in the case of British Honduras, the sum of £5,000 per annum; and in the 
case of Jamaica, the sum of £5,000 per annum. 

185766°— 22 46 



716 colo:n'ial taeiff policies. 

The proYisions in tlie customs tariff of 1907 for a preference on 
imports from Great Britain and from British colonies are as follows: 

DUTIES OF CUSTOMS, SCHEDULE A. 

3. Subject to the provisions of this act and of the customs act, there shall be levied, 
collected, and paid upon all goods enumerated, _ or referred to as not enumerated, 
in schedule A to this act, when such goods are imported into Canada or taken out 
of warehouse for consumption therein, the several rates of duties of customs, if any, 
set opposite to each item, respectively, or charged on goods as not enumerated, in the 
column of the tariff applicable to the goods, subject to the following conditions, viz: 
(1) British preferential tariff.— The rates of customs duties, if any, set forth in column 
1, "British preferential tariff," shall apply to goods the produce or manufacture of 
the following British countries when imported direct from any British country: 

(a) The United Kingdom. 

(6) The British colony of Bermuda. 

(c) The British colonies commonly called the British West Indies, including 

the following: 
The Bahamas. 
Jamaica. 

Tm-ks and Caicos Islands. 
The Leeward Islands (Antigua, St. Chiistopher-Xevis, Dominica, 

Montserrat, and the Yii'gin Islands). 
The Windward Islands (Grenada, St. Vincent, and St. Lucia). 
Barbados. 
Trinidad and Tobago. 

(d) British Guiana. 

(e) British India. 
(/) Ceylon. 

(g) Straits Settlements. 

(h) New Zealand. 

(^) Cape of Good Hope. 

(/) Natal. 

(k) Orange River Colony, 

(l) Transvaal. 

(??i) Southern Rhodesia. 

(n) Any other colony or possession admitted to the benefit of the British prefer- 
ential tariff in Canada, ^^ in the manner hereinafter provided: 
. (2) Intermediate tariff'. — The rates of customs duties, if any, set forth in column 2, 
"Intermediate tariff," shall apply to goods the produce or manufacture of any British 
or foreign country to which the benefits of such intermediate taiiff shall have been 
**^ extended in the manner hereinafter provided, when imported direct from such foreign 
country or from a British country. 

(3) General tariff. — The rates of customs duties, if any, set forth in coliunn 3, "Gen- 
eral tariff," shall apply to all goods not entitled to admission under the intermediate 
tariff or under the British preferential tariff. 

(4) Proof of origin — Decision of rainister. — Proof of origin, as prescribed by the 
minister of customs, shall be furnished with the bill of entry at tie customhouse for 
goods admitted to entry under any of the tariffs in schedule A; and the decision 
of the minister of customs shall be final as to the tariff or surtax applicable in any 
case to imported goods by reason of their origin. 

(5) Bona fides under intermediate tariff. — Goods for which entry is claimed under the 
intermediate tariff must be bona fide the produce or manufacture of a country which 
has been admitted to the benefits of the intermediate tariff. 

(6) Bona fides under British preferential tariff. — Every manufactured article to be 
admitted under the preferential tariff must be bona fide the manufacture of a British 
country entitled to the benefits of the British preferential tariff, and a substantial 
portion of the value of the manufactured article must have been produced by labor 
in one or more of such countries. 

REGUL-WIONS. 

2. The governor in council may make such regulations as are deemed necessary for 

carrying out the provisions of the several tariffs mentioned in this section. !>r[T 

1-2 For th.6 exteasion. of tiie preferential tariii to colonies not naraed in the law see p. 695. 



CAIsTADA. 717 

POWERS OF GOVERNOR IN COUNCIL. 

4. The governor in council may, by order in council — 

(a) Extension of British preferential tariff'. — Extend the benefit of the British prefer- 
ential tariff to any British country not named in paragraph (1) of section 3, and from 
and after the publication of such order in council in the Canada Gazette the British 
preferential tariff shall apply to goods the produce of manufacture or such British 
country, subject to the provisions of this act; 

(6) Withdrawal thereof. — Withdraw the benefit of the British preferential tariff from 
any British country (other than the United Kingdom) which has received the said 
benefit; and from and after the publication of such order in the Canada Gazette the 
general tariff or the intermediate tariff, as mentioned in the said order, shall apply to 
goods the produce or manufacture of such British country, subject to the provisions 
of this act ; 

(c) Extension of intermediate tariff. — From time to time, in consideration of benefits 
satisfactory to the governor in council, extend the benefit of the intermediate tariff, 
in whole or in part, to any British or foreign country the produce or manufactures of 
which have previously been subject to the rates of customs duties set forth in the 
general tariff, and from and after the publication of such order in the Canada Gazette 
the rates of duty set forth in the intermediate tariff, so far as they are mentioned in 
the said order, shall apply to goods the produce or manufacture of such British or 
foreign country when imported direct, from such foreign country or from a British 
country, subject to the provisions of this act; and 

(d) Withdrawal thereof. — Withdraw the benefit of the intermediate tariS from any 
country to which it has been extended, and from and after the publication of such 
order in the Canada Gazette the rates of customs duties set forth in the general tariff 
shall apply to goods the produce or manufacture of such country, subject to the pro- 
visions of this act. 

Preference to Canadian ports. — On and after a date to be named by the governor in 
council, in a proclamation published in the Canada Gazette, the British preferential 
tariff shall apply only to goods brought into Canada by ship direct to a Canadian 
seaport. 

It is to be noted that the Governor in Council may withdraw the 
benefit of the preferential tariff from any British country except 
the United Kingdom. To withdraw the benefit from the United 
Kingdom it would be necessary for the Canadian Parliament to 
amend the tariff law. 

DIRECT SHIPMENT. 

The British preference, since November 29, 1906, applies only to 
products ^'imported direct from any British country." This pro- 
vision permits of importation in transit through a foreign port without 
loss of preferential privileges, but does not extend the privilege of 
the preferential rates to imports otherwise eligible if these imports 
were bought in a foreign couDtry. On the other hand, the products 
of a British country entitled to the preference are still subject to the 
preferential rates even though the Canadian importer purchases 
them in another British country not enjoying the preferential priv- 
ileges. West Indian sugar shipped in transit to Canada via New 
York is entitled to admission at preferential rates. West Indian 
sugar shipped to Newfoundland, and then sold by a Newfoundland 
broker to a Canadian importer, is entitled to the preference, although 
the products of Newfoundland are not. On the other hand, West 
Indian sugar sold hj the planter to a New York broker shipped to 
New York, and then sold by the New York broker to the Canadian 
importer, is not entitled to the preferential rates. ^^ 

The provision authorizing the Governor in Council to hmit the 
preference to goods brought into Canada by ship direct to a Canadian 

13 Seep. 720, 



718 COLONIAL TARIFF POLICIES. 

seaport (sec. 5) was introduced on March S, 1907, by motion of Sir 
Wilfrid Laurier; if put into effect, it would supersede the provisions 
concerning ^'direct" shipment examined above. When the measure 
was introduced in the House of Commons, Laurier stated that it would 
not be advantageous to apply it until the completion of the Grand 
Trunk Pacific Raihvay. The purpose of the measure was to stimu- 
late traffic through the Canadian ports, but the port facilities and the 
railroad connections with the ports were inadequate at that time to 
handle all the traffic. The provision has never been put into effect^* 
and a considerable proportion of the Canadian imports of articles 
entitled to the preferential rates continue to come via New York, 
Portland, Boston, and other American ports. 

''bona fide" BRITISH PRODUCTS. 

Until 1907 goods im^ported from Great Britain were admitted at the 
rates of the preferential tariff by the Canadian customs authorities if 
25 per cent of their value represented British labor expended upon 
them. In 1907 it was provided that British goods must embody at 
least 25 per cent of ''bona fide British labor without computing 
profits as a portion of that labor." It had been maintained by many 
people in Canada that under the old rule goods had been admitted 
into Canada at the preferential rates even though British labor 
entered into their production onl}" to a slight extent. 

PREFERENTIAL ASPECTS OF CANADIAN ANTIDUIMPTNG LEGISLATION. 

In 1904 Canada incorporated in its tariff an " antidumping" clause, 
which, as amended in 1907, reads as follows: 

U NDERVALUATION. 

"6. Special {or dumping) duty. — In the case of articles exported to 
Canada of a class or kind made or produced in Canada, if the export 
or actual selling price to an importer in Canada is less than the fair 
market value of the same article when sold for home consumption in 
the usual and ordinary course in the country whence exported to 
Canada at the time of its exportation to Canada, there shall, in ad- 
dition to the duties otherwise established, be levied, collected, and 
paid on such article, on its importation into Canada, a special duty 
(or dumping duty) equal to the difference between the said selling 
price of the article for export and the said fair market value thereof 
for home consumption; and such special duty (or dumping duty) 
shall be levied, collected, and paid on such article, although it is not 
otherwise dutiable. 

'^Limitation. — Provided that the said special duty shall not exceed 
15 per cent ad valorem in any case; 

''Exempted goods. — Provided also that the following goods shall be 
exempt from such special duty, viz : 

"(a) Goods whereon the duties otherwise established are equal 

to 50 per cent ad valorem; 
"(h) Goods of a class subject to excise duty in Canada; 

" The Canada- West Indies trade agreements of 1912 and 1920 provide that any of the parties may limit 
its preferences to imports by ship direct; the way is thus left open to Canada to put this policy into effect 
at any time on six months' notice. 



CANADA. 719 

^'{c) Sugar refined in the United Kingdom; 
^'(d) Binder twine. or twine for harvest binders manufactured 
from New Zealand hemp, istle or tampico fiber^ sisal 
grass, or sunn, or a mixture of any two or more of them, 
of single ply and measuring not exceeding 600 feet to 
the pound. 
" When excise duties disregarded. — Provided, further, that excise 
duties shall be disregarded in estimating the market value of goods 
for the purposes of special duty when the goods are entitled to entry 
under the British preferential tariff. 

"2. 'Export price' — 'selling priceJ — ^Export price' or ^selling price' 
in this section shall be held to mean and include the exporter's price 
for the goods, exclusive of all charges thereon after their shipment 
from the place whence exported directly to Canada." 

While in general this provision applies without discrimination to 
all imports, two provisions of the ^^antidumping" clause are specifi- 
cally favorable to British imports. The provision exempting sugar 
refin^ed in the United Kingdom from the extra duty enables British 
sugar refiners to sell refined sugar on the basis of duty-free raw sugar 
in the United Kingdom, whereas American exporters of refined sugar 
must pay the dumping duty if they sell on the basis of the American 
market price minus the American drawback on the dutiable imported 
refined sugar used in its manufacture. The provision stipulating 
that excise duties shall be disregarded in estimating the market 
value of goods for the purposes of special duty when the goods are 
entitled to entry under the British preferential tariff also favors the 
British exporter, although there do not appear to have been any 
instances where its application was of commercial importance before 
the establishment by the customs war-revenue act of 1915 of a pref- 
erence on British alcoholic liquors and tobacco. 

PREFERENTIAL ASPECTS OF THE CANADIAN CUSTOMS ADMINISTRATION 

LAWS. 

The administration of the Canadian tariff is governed by the 
provisions of the Canada customs act of 1886 and subsequent amend- 
ments thereof. Several provisions of this act, especially those 
relating to the valuation of imports for duty purposes, operate in a 
manner especially favorable to British imports and create what is in 
fact an indirect preference to British imports over and above the 
direct preference established by the customs tariff law. 

"fair market value for home consumption." 

Section 58 of the customs act of 1886 provides that whenever any 
ad valorem duty is imposed on goods imported into Canada the 
value used as a basis for levying the duty shall be ^'ihe fair market 
value thereof, when sold for home consumption, in the principal 
markets of the country whence and at the time when the same were 
exported directly to Canada." ^^ 

1 ' Sec. 40, of eh. 48 of the revised statutes of Canada, 1906. An amendment enacted on June 4, 1921, adds: 
"Such vahieiii no case to be lower than the wholesale price thereof at such time and place. 

" (2) Provided that the vaue for duty of new or unused goods shall in no case be less than the actual cost 
of production of similar goods at date of shipment direct to Canada, plus a reasonable profit thereon, and 
the Minister of Customs and Excise shall be the sole judge of what shall constitute a reasonable profit in 
the circumstances." 



720 COLONIAL TARIFF POLICIES. 

This provision operates in several ways to tke advantage of British 
imports and to the disadvantage of imports from the United States. 
In many countries which have ad valorem import duties, these duties 
are based on estimated or on declared c. i. f. values; i. e,, on values at 
the frontier, with cost of shipment, insurance, and other charges 
added to the f . o. b. prices at point of export. The Canadian method 
was introduced by &alt in 1859 w^ith the express purpose of con- 
ferring advantages upon British imports in their competition with 
imports from the United States. ^^ It undoubtedly accomplishes 
this purpose, especially when supported by the provisions of the 
an tidumping cl ause . 

in most cases the transportation costs to Canada for similar articles 
are greater from a British point of production than from a point in the 
United States, if Canada were to follow the usual practice in using 
values at the Canadian frontier as a basis for ad valorem duties, the 
values of British imports would be higher relative to the values of 
competing American imports than they are under the method of 
valuation in operation, and the duties on British imports would be 
increased relative to the duties on similar American products. If a 
com^modity subject to ad Valorem duties upon importation into 
Canada is produced both in England an.d in the United States^ and 
can be laid down at the same price c. L f. at a Canadian port by both 
the British and the American exporters, the import from the United 
States will pay a higher duty than the import from Great Britain^ 
aside from any direct preference to British products provided for in 
the tariff law, wherever the transportation costs from the Eno'lish 
point of export are greater than the similar costs from the American 
point of export. This provision is of special importance to British 
trade v/ith western Canada in its competition with the trade of the 
naanufacturing Middle Western States. 

The provision in the same section that the value taken for duty 
purposes shall be the ^^fair value when sold for home consumption" 
operates to check the American export to Canada of articles manu- 
factured from dutiable materials imported into the United States. 
Taken together with the provision in section 64 that any drawback 
must be included in the ''fair market price" in valuing imports for 
duty and with the antidumping clause which provides for the 
imposition of an additional duty where goods are sold by the United 
States at the domestic price minus a drawback on the duty paid on 
imported materials used in their manufacture, this f)TO vision checks 
exports from the United States to Canada of articles in whose manu- 
facture dutiable imported materials are used. As England has few 
duties on imports the advantage of this legislation to British trade is 
apparent. 

EFPEGT aF DIRECT SHIPMENT ON ENTREPOT TRADE. 

The provision in section 58 that the value of goods imported into 
Canada shall for duty purposes be the fair m.arket value for home 
consumption in the country whence ''exported directly to Canada" 
creates special advantages for the entrepot trade of great Britain as 
against the entrepot trade of the United States, and tends also to dis- 
courage the importation into Canada through New York brokers of 

"Seep. 661. 



CANADA. 721 

the products of Great Britain. An article of German production pur- 
chased from London by a Canadian importer is subject to duty in 
Canada at its London value; i. e., the German value plus transporta- 
tion costs to England and broker's profits. The same article if pur- 
chased from New York by the Canadian purchaser is subject to duty 
in Canada at its New York value; i. e., the German value plus the 
transportation costs from Germany to New York (generally higher 
than to England) plus the American broker's profits plus the Amer- 
ican import duty (even though the article remains in bond and does 
not actually pay a duty in the United States) . An article of British 
manufacture purchased by the Canadian importer from the British 
exporter pays duty on its value in England. The same article, if 
purchased from a New York merchant, pays duty on its New York 
value, which is its value in England plus transportation costs, broker's 
profits, and the American duty. This would be the case even though 
it was landed in Nevf York in bond and paid no duty in the United 
States. 

The term '^when imported directly," as used in Canadian tariff 
legislation, requires explanation. Section 68 authorizes the governor 
in council, in the cases and on the conditions to be mentioned in 
the order in council, to permit goods bona fide exported to Canada 
from any country but passing in transitu through another country 
to be valued for duty as if they were imported directly from such 
first-mentioned country. An order in council is in effect in Canada 
which instructs the customs officials to treat as direct imports in bond 
through the United States from another country, whose bulk is not 
broken in the United States, which remain in the United States for 
only a short time, and which were consigned from the country of 
primary export, not to an American importer or broker but to a 
Canadian importer via the American route. This concession is of 
practical significance. It permits the use of American ports by 
Canadian importers without subjecting their imports to higher taxa- 
tion than that imposed on imports via a Canadian port. The follow- 
ing may be taken as an illustration of the working of these provisions: 
Tin plate from Great Britain shipped to a New York broker and by 
him reexported to Canada pays duty in Canada on the basis of its 
value in New York, including the American duty, even though it has 
been kept in bond in New York and has not actually paid the Ameri- 
can duty. It also loses the benefit of the preferential rates in the 
Canadian tariff,^^ and if invoiced to Canada at its value in bond in 
New York (i. e.. New York market value minus the United States 
duty) , it becomes subject to the Canadian antidumping tax. This 
applies also to Canadian imports of British tin plate from New York 
when the American duty upon the tin plate has been paid but recov- 
ered by a drawback upon reexportation. On the other hand, tin 
plate from England consigned by the English exporter to a Canadian 
importer, whether it is shipped via a Canadian port or via an Ameri- 
can port in bond is valued for duty in Canada at its English market 
value and is admitted at the preferential rates.^ 

17 See p. 717, under Direct shipment. 

a Other preferential features of Canadian legislation are that shipments from non-British countries of a 
value of over $100 (Canadian) require certificates from certain Canadian or British officers (act of June 4, 
1921, Ch. 26, sec. 6); that only British subjects may be customs house broliers (ib., sec. 10); and that after 
Dec. 31, 1921, all goods imported into Canada shall bear, in English or French, the name of the country of 
origin (act of June 4, 1921, Ch, 27, sec. 5; order in council, Aug. 13, 1921). 



722 ~ COLONIAL TARIFF POLICIES. 

SECTIOXS OF THE CUSTOMS ACT ESTABLISHIXG A PREFERENCE OX IMPORTS FROM GREAT 

BRITAIN. 

The sections in the customs act of 1886 examined above are as 
follows : 

58. Whenever any duty ad valorem is imposed on any goods imported into Canada, 
the value for duty shall be the fair m^arket value thereof, when sold for home con- 
sumption, in the principal markets of the country whence and at the time when the 
same were exported directly to Canada. (46 Victoria, Ch. 12. s. 68.) 

64. The fair market value of goods shall be taken to include the amount of any 
drawback which has been allowed by the Government of any other country, also the 
amount of consideration or money value of any special arrangement between the 
exporter and the importer or between any persons interested therein because of the 
exportation or intended exportation of such goods, or the right to territorial limits 
for the sale or use thereof, and also the amount or money value of any so-called royalty, 
rent, or charge for use of any machine or goods of any description which the seller 
or proprietor does or would usually charge thereon when the same are sold or leased 
or rented for use in the country whence they ha^'e been exported to Canada. When 
the amount of such drawback, consideration, money value, royalty, rent, or charge 
for use has been deducted from the A'alue of such goods on the face of the invoice 
under which entry is to be made, or is not shown thereon, the collector of customs 
or proper officer shall add the amount of such deduction, drawback, consideration, 
monev value, royaltv, rent, or charge for use and cause to be paid the lawful dutv 
thereon. (52 Victoria, Ch. 14, s. 6.) _ _ - ' 

68. The governor in council may provide that in the cases and on the conditions 
to be mentioned in the order in council goods bona fide exported to Canada from 
any country, but passing in transitu through another country, shall be valued for 
dutv as if thev were imported directlv from such first-mentioned countrv. (46 Vic- 
toria, Ch. 12, s. 74.) 

(2) Goods that have been entered for consumption or for warehouse, or that have 
been permitted to remain unclaimed, or that have been permitted to remain for any 
purpose, in any country intermediate between the country of export and Canada 
shall not be considered as in transitu through such intermediate country but shall 
be treated as goods imported from such intermediate country and be valued and 
rated for duty accordingly. (52 Victoria, Ch. 14, s. 7.) 

VIII. Most-Fayored-Nation Treaties axd Canadian Tariff 

Relations. 

the position of canada with respect to british treaties. 

Canada, as a British dependency, is bound to observe the stipula- 
tions of ail treaties entered into by Great Britain ^vhich apj)ly to her. ^^ 
Before confederation, and on several subsequent occasions, Great 
Britain entered into commercial treaties with foreign countries to 
which the British colonies v^^ere made subject without consultation. 

THE RIGHT OF SEPARATE ADHEREXCE. 

But in response to a request from the Canadian Government on 
March 21, 1881, that thereafter Canada be informed ^'of the inception 
of any new treaty, and that in future no stipulation binding upon the 
commerce of Canada should be introduced into any treaty without 
reserving to the Canadian Government the option of acceptance or 
refusal," Lord Carnarvon, the colonial secretary, agreed that a new 
clause should be inserted in all treaties thereafter concluded, to the 

18 There is some difference of opinion among authorities regarding the question of the application of general 
treaties of Great Britain with foreign countries to the British colonies in cases where such apphcatioh is not 
expressly provided for in the treaties. For two divergent opinions, see Keith, Responsible Government 
in the Dominions, p. 226, and Todd, Parhamentary Government in the British Colonies, p. 265. The usual 
interpretation is that British treaties in general do not apply to the British colonies unless they contain 
express provision for such application. 



CAN- ADA. 723 

effect that no colony was included except at its own option.^*^ The 
practice was then introduced by Great Britain of making treaties with 
the provision that they should only become applicable to the self- 
governing Dominions on notice being given within a period of one or 
two years of their assent to the treaty. 

The first treaty so concluded seems to have been that of January 21, 
1882, with Montenegro, and in general such a clause was included in 
all subsequent commercial treaties of Great Britain. The Anglo- 
French treaty of 1882 was an exception, however. The French 
Government was unwilling to allow the British colonies to participate 
in the advantages of the new tariff arrangements because of the high 
duties imposed by them on French products and because of ''the 
customs autonomy of some of the colonies and the inability of Her 
Majesty's Government to bind them." There was, therefore, no 
mention of the British colonies in this treaty. Canada used her new 
power, as a rule, to withhold adherence, but in several cases she 
assented to British treaties. 

THE RIGHT TO CLAIM RELEASE FROM TREATY OBLIGATIONS. 

The treaties which had been concluded by Great Britain before 
1881, and to which Canada had been made a party without con- 
sultation, continued to be binding upon her. Some of these treaties 
dated back to the seventeenth century, and their status and scope 
were uncertain. In general, in so far as they concerned the colonies, 
the treaties obliged them to grant most-favored-nation treatment to 
the signatory countries; i. e., as favorable treatment as was granted 
to any other foreign country. Two of them, however, imposed a 
further obligation on the colonies; the treaties of 1862 with Belgium 
and of 1865 with the German Zollverein obliged the colonies to grant 
not only most-favored-nation treatment, but as favorable treatment 
as they accorded to Great Britain herself. As has been related else- 
w^hercj^*^ the colonies repeatedly requested of Great Britain that she 
secure their release from the stipulations of these treaties. In 1897 
Great Britain practically acknowledged the right of the colonies to 
claim release from British commercial treaties with regard to which 
they had not been consulted. Upon the refusal of Belgium and 
Germany to release the British colonies from their obligations, Great 
Britain denounced the tw^o treaties in question. 

THE RIGHT OF SEPARATE WITHDRAWAL. 

The diplomatic difficulties which followed the attempt of Great 
Britain to secure the consent of Belgium and Germany to the with- 
drawal of the colonies suggested the desirability of supplementing the 
older practice, by which treaties were concluded with provision for 
separate adherence in respect of the colonies, by including in sub- 
sequent treaties provision for separate withdrawal on the part of the 
colonies. From 1899 on, old treaties were revised and new treaties 
were drafted with provisions for separate withdrawal herefrom by 
the colonies. Impetus was given to this movement by a resolution 
of the imperial conference of 1911 urging the Imperial Government 
t6 obtain for the colonies the right of separate withdrawal from all 
the existing treaties which did not already make provision for such 

19 Todd: Op. cit., p. 267. 20 see pp. 640, 645. 



72.4 COLONIAL TARIFF POLICIES. 

withdrawal. The only treaties remaining at the outbreak of the war 
which applied to Canada and which did not make provision for 
separate withdrawal if desired were the treaties wdth Austria, Eussia, 
Bolivia, Spain, and Venezuela. The treaty with Austria was brought 
to a termination by the operation of the war, and the treaty with 
Russia w^as denounced by that country shortly after the revolution 
in 1917. There remain only three unimportant treaties with regard 
to which Canada does not have the right of separate withdrawal. 

TREATIES ESPECIALLY OX CANADA' S BEHALF. 

Canada does not possess independent treaty-making powers, but 
has gradually gained considerable privileges with regard to the 
carrying on of negotiations wdth foreign countries. Of recent years 
negotiations on behalf of Canada have been conducted mainly by the 
Canadian representatives themselves, and except where a formal 
treaty w^as necessary to consummate the negotiations the imperial 
authorities did not participate. 

In 1893 Canada negotiated with France, through the mediation of 
the British ambassador to France, a treaty which pledged Canada 
to grant France most-favored-nation treatment. This treaty was 
terminated by the treaty of 1909 with France, w^hich conceded to 
France most-favored-nation treatment in Canada with regard to 
tariff matters only for the articles and classes of articles enumerated 
in the treaty. This treaty, denounced by France on vSeptember 10, 
1919, but extended provisionally, was terminated by Canada on 
eJune 19, 1920. Italy, by the provisional agreement of 1910, enjoys 
the rates of the Canadian iQtermediate tariff with regard to certain 
items, and Belgium and the Netherlands, as the result of inform.ai 
negotiations, were granted the rates of the Canadian intermediate 
tariff on those items enumerated in the French treaty of 1909. These 
thre« last-named countries have no claim to most-favored-nation 
treatment in Canada even for the items with regard to w^hich they 
enjoy the intermediate rates of the Canadian tariff.^^ 

COUNTRIES ENTITLED TO MOST-FAVORED-NATION TREATMENT IN 

CANADA. 

The countries which are entitled (May 4, 1921) by treaty to most- 
favored-nation treatment in Canada are:^^ Argentine RepubKc, 
Colombia, Denmark, France, Japan, Norway, Russia, Spain, vSweden, 
Switzerland, and Venezuela. 

IX, Summary. 

In 1897 Canada iaaugurated a hew period in the tariff history of 
the British Empire by her iutroduction of a preferential tariff policy. 
The preference originally granted w^as one-eighth of the full duty, 
but in the following year, when Gjeat Britain, by denouncing her 
treaties with Belgium and the ZoUverein, had reheved Canada from 
the necessit^i^sof extending her preference to them and to other most- 
favored-nation countries, the amount of the preference was increased 

21 The tariff treatment which these three countries received from Canada was not affetted by the'tieTr 
FreBch-Cana<iian trade agreement concluded Jan. 29, 1921. 

22 Before the war Austria-Hungary and Portugal were entitled by treaty to most-favored-nation treat- 
ment in Canada. The treaty between Great Britain and Austria-Hungary v/as terminated by the war, 
and Canada v>-ithdrew from the Anglo-Portugal treaty on Dec. 1, 1917. All these treaties are subject to 
separate withdrawal by Canada except the treaties with Spain and Venezuela. 



CANADA. 725 

to 25 per cent of the full duty. In 1900 the reduction was made 
one-third of the full duty. One-third continues to be the normal 
reduction, but by changes made for the most part in 1904 and 1907 
the single- tariff schedule subject to a uniform percentage of reduction 
has been replaced by a three-column tariff which specifies the 
preferential, the intermediate, and the general rate upon each item. 

In Canada, as in the other British Dominions, the preferential 
policy has been subordinate to the policy of protection, but, unlike 
the other Dominions, Canada has made her preferential policy also 
subordinate to the promotion of her export trade and has not 
hesitated, when concessions to foreign countries seemed advantageous, 
to cut into the preference already granted to Great Britain. This 
willingness of the Canadian Government to reduce a preference even 
of some years' standing was seen in 1904 and later when the amount 
of preference upon woolens, cordage, and other products was reduced; 
in 1907, when the intermediate tariff was established; in 1910^ 
when agreements were made with France, Italy, Belgium, the Nether- 
lands, and the United States for various reductions of rates, some of 
which became applicable to all most-favored countries; in 1911, when 
a reciprocity treaty was negotiated with the United States; and in 
1920, when the war surtax was swept from the intermediate and 
general schedules. On the other hand, both in 1904 and 1907, 
while the preference was reduced upon some articles to%fford greater 
protection to the Canadian producer, upon other articles the preference 
was increased; the war surtax of 1915 operated to produce a general 
increase in the preference, and this was further increased in 1919, 
when the war surtax was removed, through the greater part of the 
tariff, only from the preferential schedule. 

Canada extended its preference to Great Britain without bargaining 
for any reciprocal concessions. Indeed, the idea underlying the 
'^reciproca,! tariff" of 1897 was that the free- trade policy of the 
United Kingdom in itself constituted favorable treatment of Canadian 
products. Upon the like basis the Canadian preference was freely 
extended in 1898 or later to practically all of the British Crown 
colonies on the ground that their low revenue duties made them 
favorable markets for Canadian products. To New Zealand, Canada 
freely extended her preferential tariff in 1904, but only after New ' 
Zealand had extended hers to Canada. Canada bargainee! successfully 
with South Africa in 1904 for the mutual concession of the preferential 
rates; and repeatedly but unsuccessfully Canada has bargained with 
Australia, This difference in attitude toward the mother country 
and the Crown colonies on the one hand and toward the other 
Dominions on the other hand is not an arbitrary one nor is it due to 
sentiment, but rests upon the fact that the Dominions pursue pro- 
tective policies. The desire of Canada and Australia to foster the 
same industries hinders a reciprocity agreement between them. The 
tariff schedules of the British West Indies have been more extensive 
and have contained higher rates than those of the other colonies to 
which Canada freely granted her preferences, but reasons of policy 
and of geography led Canada from the first to show these colonies 
special consideration even to the extent of imposing duties for the 
sake of establishing a preference upon their products. Later, in the 
period when trade agreements with foreign countries were impairing 
the value of the preference to Great Britain, the preferential rates in 
which the West Indies were especially interested were increased and 



726 COLONIAL TARIFF POLICIES. 

extended, but only in return for concessions on the part of some of 
the West Indies ^912-13). The West Indian colonies which re- 
mained outside of this agreement were included in its benefits for a 
period which was allowed to run on during the war until, in 1920-21, 
all the West Indian colonies except Bermuda ratified a new agreement 
hj which greater tariff favoi^ were extended on both sides. 

The administrative regulations connected with the Canadian tariff 
operate to increase the British preference in three respects. Since 
1859 the Canadian ad valorem duties have been assessed on the value 
in the port of shipment rather than on the value at the port of entry 
into Canada. The effect is to free from duty the costs of direct 
transportation from any part of the world, and to that extent to 
deprive the countries which lie closer to Canada of the advantage of 
their position. Since the chief competitors for the Canadian import 
trade are the United States and Great Britain, the latter derives the 
main benefit from the regulation. The Canadian antidumping law 
(1904-7) operates to the advantage of free -trade countries, so that 
Great Britain derives the main benefit; and special features of the 
law applicable to Great Britain alone extend the same advantages 
in respect to certain articles upon which duties or excises are levied 
in Great Britain. In 1920 the rule in regard to the conversion of 
valuations expressed in depreciated currencies was changed so that 
the ad valorem duties upon imports from countries with depreciated 
currencies were in effect reduced in proportion to that depreciation" 
(but, according to legislation proposed in May, 1921, not beyond a 
reduction of 50 per cent) . Once again the legislation benefits coun- 
tries other than Great Britain, but its significance lies chiefly in its 
favorable effect upon British as compared to American trade with 
Canada. 

It was the Liberal Party which introduced and extended the 
Canadian preferential system in 1897-1900. When, after several 
years, Great Britain had granted no preference in return, the 
Canadian Government sought the expansion of trade in other direc- 
tions, and the period from 1904 to 1911 impaired, to a considerable 
degree, the value of the preference accorded to Great Britain. This 
period ended with the rejection b}^ the Canadian voters of the recip- 
rocal agreement with the United States (1911) and the return of the 
Conservatives to power. The Conservatives extended the preference 
enjoyed by the British West Indies (1912), and, by the war customs 
act of 1915, made a general increase in the differentials between the 
rates of the preferential and the other schedules. After the war, when 
the reduction of taxation became possible, the Coalition or Unionist 
Government removed the surtax first from British products so that 
temporarily the preference was further increased. The programs of 
the Liberal and of the Farmers' Parties now calls for an extension of 
the free list and for an all-around reduction of duties, but both would 
accompany these measures with a general increase in the percentage 
of reduction accorded under the preferential schedule, and the 
Farmers' Party even advocates free trade with Great Britain. Thus 
the leading parties in Canada have given their support to the preferen- 
tial policy — a policy which is receiving renewed consideration as 
Canadians reflect upon the probable effect upon their trade of the 
tariff revision now in progress in the United States. 

{Bihliograpliy on page 832.) 



Chapter XIV. 
THE PREFERENTIAL POLICY IN NEWFOUNDLAND, 



CONTENTS. 



ir'age. 

I. Population, trade, and Government 727 

Table l.— Imports and exports 1900- 

1920 727 

II. General features of the tariff 728 

Table 2.— Total imports and duties 

paid thereon 729 

III. No general preference to British trade. . . 729 

The tariff as a revenue producer 730 

Characteristics of Newfoundland's 

trade 730 

Table 3. — Imports and exports, 
by principal countries, 1914 

and 1919 730 

Table 4. — Distribution of exports 
of dried codfish. 1914 and 1919.. 731 



III. No general preference to British trade- 

Continued. 

Relations with Great Britain 

Relations with Canada 

Relations with British West Indies. 
Relations with the United States 

IV. Minor preferential provisions 

Bargaining provisions in the Nev/- 

foundland tariff 

Surtaxes as possible penalty on nonre- 

ciprocal treatment inUnited States. 
Table 5. — Newfoundland's penalty 

duties 

Table 6. — Exports to Newfoundland 

of articles named in the penalty 

tariff provision 



731 
731 
732 
732 
734 

735 

735 



7SQ 



I. Population, Trade, and Government. 

The Dominion of Newfoundland includes the island of that name, 
42j700 square miles in area, and that strip of the eastern coast of the 
continent called Labrador, with an area of about 120,000 square 
miles. Labrador is practically uninhabited, containing only about 
4,000 people. The population of the island is about 250,000 or 6 to 
the square mile. Newfoundland, for the greater part of her history, 
has been a country of one industry — fishing. Even to-day, although 
in recent years the mining and wood-pulp industries have undergone 
considerable development, over 70 per cent of her exports consist of 
products of the fisheries and over 60 per cent consist of dried cod 
alone. The small population and the lack of economic development 
make Newfoundland much the least important of the Dominions, 
and its commerce is only about one-fourth of that of New Zealand, 
the next larger of the Dominions. Table 1 shows the values of im- 
ports and exports, and their growth since 1900. 



Tablf 1. 



■Value of the imports and exports of Newfoundland for selected years, 1900- 
IB'^O.^ 



[In millions of dollars. 



Year. 


Imports. 


Exports. 


Total. 


1900 


7.5 
12.8 
16.0 
12.3 
16.4 
21.3 
26.9 
33.3 


8.6 
11.8 
14.7 
13.1 
19.0 
22.4 
30.2 
36.8 


16.1 


1910 


23.6 


1913 


30.7 


1915 . . 


1 25. 4 


1916 


35.4 


1917 


43.7 


1^18. H,. • 

1919 


67.1 
70.1 


1920 . . 













1 Yearbook of Newfoundland, 1920, p. 366. 



727 



728 COLO^^IAL TARIFF POLICIES, 

Of all tlie self-governing Dominions, Newfoundland enjoys the least 
control over its own legislation and in other respects possesses less 
autonomy than the other Dominions. This limitation is partly the 
result of its small population and of its comparatively backward 
economic development, but it is primarily due to the danger of the 
disturbance of international amity arising from competition in the 
fisheries. The claims of France and the United States to privileges 
in the Newfoundland fisheries and the objections raised against 
these claims hj Newfoundland have repeatedly involved Great 
Britain in diplomatic controversies^ have at times even endangered 
the continuance of friendly relations with France and the United 
States, and have resulted, therefore, in Great Britain's retaining a 
greater measure of control over Nevvfoundland legislation. 

II. General Features of the Tariff. 

The tariff schedules of 1898 and 1905 show that Newfoundland has 
long pursued the policy of levying high duties, partly for the pro- 
tection of her agriculture and her few industries, but chiefly for 
securing revenue. Many of the rates, especially on foodstuffs, are 
specific, but ad valorem rates up to 40 per cent, and even higher, 
are levied on many classes of manufactured articles.^ 

A surtax of 10 per cent of the rate was added to all import duties in 
December, 1914. In a few instances the rates are protective of local 
industries, but the manufactures of New^fomidland are comparatively 
unimportant, so that the rates are chiefly for revenue. In noiTnal 
prewar years duties on imports yielded over 80 per cent of the 
colony's revenue. Before the w^ar the free list included agricultural 
and coal-mining machinery; books, paper, and printing supplies; 
whole wheat and uncleaned rice, and fertilizers; but these articles 
and others have been made dutiable at 10 per cent.^ The free 
list still includes sugar, kerosene, salt for curing fish, machinery 
for making nets and other fishing gear, and various raw materials. 
The free list in 1913-14 covered 47.5 per cent of the total importations, 
but in 1918-19 only 16.1 per cent. The transfer to the dutiable list 
of many articles which, however, were subjected to comparatively 
low rates has decreased the average rate collected upon all dutiable 
articles, while the presence of numerous specific rates has served 
during a period of rising prices, to prevent an increase in the average 
rate collected upon all imports, free and dutiable. Table 2 shows 
the average rate collected upon all imports for selected years before 
•— 

1 Examples of these duties, vvithout the surtax, may be given. The general terms used include in many- 
cases articles dutiable at other rates under more precise descriptions contained elsewhere in the tariff 
schedule. Eggs are dutiable at 5 cents a dozen; tea and coffee at 5 cents a pound; potatoes at 10 cents a 
bushel; other vegetables at 20 cents a bushel, or at 30 per cent ad valorem; fruits, 15 per cent; dried fruit, 
3 cents a pound; herring barrels, 25 cents each; lumber, SI to So per thousand feet; gasoline, 6 cents a gallon; 
cigarettes, S5 a pound; beer, 80 cents a gallon; wines, other than champagne, SO. 40 to S2.60 a gallon, and 
other alcohohc beverages S3. 40 to 84.50 a gallon. Lard, glassware, and paint pay 30 per cent ad valorem, 
and common brick 30 per cent plus 52.50 per thousand. Thirtj^-flve per cent ad valorem is levied upon 

Eractically all textiles; many kinds of groceries, hardvrare, and machinery; boats and launches; acids, 
sh, and timepieces. Forty per cent ad valorem is levied upon all goods not enuxaerated in the tariff 
schedules, upon china and porcelain, leather ware, trunks and valises, hats and caps, brushes, bicycles, 
manufactures of wood, matches, fancy wares, fireworks, perfumery, musical instruments, and jewelry. 
Forty-five per cent ad valorem is levied upon ready-made clothing, manufactures of fur, and tinware. 
Alcohohc perfumes, and advertising and printed matter are among the articles dutiable at 50 per cent ad 
valorem; casks, n. e. s., i>av 60 per cent, and wheelbarrows 75 per cent. i ci : 

2 The surtax of December, 1914, is appheable and makes this rate 11 per cent. Tea was free, andis.no'w 
dutiable at 5 cents a pound; beef and pork in barrels have been made dutiatrle at SI and S1.50 per barrel, 
respectively. Acts of Aug. 12, 1921 increase the surtax to 25 per cent of the duty, with some exceptions, 
and impose upon imports a sales tax of 5 per cent ad valorem. Commeree Reports, Oct. 10, 1921, pp. 
359, 362. 



NEWrOUN^DLAND. 



729 



and after the tariffs of 1898 and 1905, for the last fiscal year before 
the war, and for the latest year available. 

Table 2. — Total imports and duties paid thereon, in selected fiscal years.°' 
[In thousands of dollars.] 



Year. 


Imports. 


Duty 
paid. 


Average 1 ate 
collected upon — 


All 

imports. 


Dutiable 
imports. 


1896 


$5,987 
7,497 
10,414 
15, 194 
33,297 


$1,387 
1,874 
2,308 
2,955 
6,588 


Per cent. 
23.2 
25.0 
22.2 
19.5 
19.8 


Per cent. 


1900 




1906 1 . 




1914 


36.8 


1919.. ...- 


23.6 







Ended June 30. 



III. No General Preference to British Trade. 

Newfoundland alone of the Dominions has not adopted a general 
scheme of preference to British trade. The explanation of this 
isolation in policy is to be found partly in her policy of raising revenue 
from imports, but mainly in the character of her export trade and of 
her commercial relations with other countries. Briefly, Newfound- 
land finds her most important markets, actual and potential, outside 
of the British Empire, and the British countries which do afford a 
limited market for her products either already grant to Ne^vfoundland 
a one-sided preference for reasons of their own, or are not likely to 
adopt preferential duties which would benefit Newfoundland's trade. 
Newfoundland, therefore, has not been drawn toward a preferential 
policy by the same hopes which have influenced the other Dominions, 
and, on the other hand, her fears of retaliation by other countries 
have been stronger. 

Newfoundland representatives have taken little part in the dis- 
cussions of preference at the colonial conferences. Newfoundland 
failed to send representatives to the Ottawa conference of 1894. At 
the conference in London in 1902, and again in 1907, her representa- 
tives supported the resolutions for preferential trade. Sir Robert 
Bond, the prime minister of Newfoundland, stated at the colonial 
conference of 1907 that the establishment of a preference to British 
products was under consideration, but the budget speeches ^ made 
in the Newfoundland Legislature during this period do not disclose 
any indications of it. On the contrary, year after year, emphasis 
was laid, first, on the necessity of Newfoundland's retaining complete 
fiscal autonomy and determining her commercial policy with a view 
single to her own interests, and, second, on the fact that the important 
markets for Newfoundland's exports were in foreign countries.* 

3 Jebb, R.: The Imperial Conference, Vol. II, p. 218. 

< Cf. for example, budget speeches of Mr. E. M. Jackman, minister of finance and customs, Mar. 15, 1907, 
and Feb. 11. 1908. 



730 



COLONIAL TAEIFF POLICIES. 



THE TARIFF AS A REVENUE PRODUCER. 

The Newfoundland tariff is relied upon to produce a great part of 
the State's revenue. Through many years prior to and including 
1916-17 customs yielded 80 to 85 per cent of the total revenue, and 
in 1917-18 above 75 per cent of the colony's revenue. Moreover, 
in normal prewar years over 60 per cent of the colony's imports came 
from British countries. A general reduction upon these imports, 
therefore, would have resulted in losses of revenue, while a general 
increase upon foreign imports was not considered desirable. 

CHARACTERISTICS OF NEWFOUNDLAND'S TRADE. 



The distribution of Nev/foundland's trade is shown in Tables 3 
and 4. Table 3 shows the predominance of the United States, 
Canada, and Great Britain in supplying the diverse wants of New- 
foundland and the relatively unimportant market which they afford 
for her products. Table 4 shows more specifically the markets for 
Newfoundland's chief export, dried cod. It exhibits the significant 
fact that the Roman and Greek Catholic countries of Europe and 
South America absorb 90 per cent of Newfoundland's export of dried 
fish. In these countries the warm climate, the low standard of 
living, and the religious observances of the people all combine to 
create a market for cheap salt fish, whereas there never has been and 
can not be any special demand for it in Great Britain. This is one 
of the principal factors which has obstructed the development of the 
preferential policy in Newfoundland. 

Table 3. — Total value of imports and exports of Neufoundland by principal countries 
for fiscal years 1914 and 1919.^ 

[In millions of dollars.] 





Imports. 


Exports. 


Country. 


1913-14 


1918-19 


1913-14 


1918-19 




Value. 


Per 
cent of 
total. 


Value. 


Per 
cent of 
total. 


Value. 


Per 

cent of 
total. 


Value. 


Per 
cent of 
total. 


United Ivingdom 


3.8 

4.9 

.2 

5.8 


25.2 

32.0 

1.5 

38.2 

•1 


2.4 
12.8 

.9 
16.6 

.1 


7.2 
38.4 

2.8 

49.8 

.3 


3.3 
2.0 
. 5 
1.7 
1.0 
3.2 


21.5 
13.0 

3.5 
11.1 

6.5 
21.4 


2.7 
2.5 
1.2 
6.5 
7.8 
5.2 
1.0 
3.1 
2.1 
3.9 
.8 


7.4 


Canada 


6.9 


British West Indies 


3.2 


United States 


17.7 




21.3 


Brazil . 


14.1 




.1 






2.9 


Italy L. 






1. 1 
.4 

1.3 
.6 


7.2 
2.7 


8.4 


Greece 


.2 

.7 

2.0 






5.7 


Spain 


.1 
.2 


2 


.7 
.9 


10.6 


All others 


1.9 


Total 


15.2 


100.0 


33.3 


100.0 


15.1 


100.0 


36.8 


100.0 



1 Newfoundland customs returns for 1913-14 and 1918-19. 



NEWFOUNDLAND. 



731 



Table 4. — Distribution of exports of dried codfish by principal countries, 1913-14 and 

1918-19.^ 



[Quantity in thousands of quintals and value in thousands 


of dollars.] 




Country. 


Quantity. 


Value. 


1913-14 


1918-19 


1913-14 


1918-19 


Portugal 


153 

462 

201 

171 

70 

67 

18 

80 

12 

13 


560 

310 

271 

213 

140 

73 

51 

30 

6 

28 


972 

3,218 

1,214 

1,082 

396 

422 

122 

479 

65 

102 


7,816 
5,019 
3,861 
3,080 
2,090 
907 


Brazil 


Spain 


Italy. 


Greece 


British West Indies 


United States 


707 


Canada . . 


309 


United Kingdom 


93 


All other countries . . 


435 






Total 


1, 247 


1,682 


8,072 


24,317 





1 Newfoundland customs returns, 1913-14 and 1918-19. 

Note. — A Newfoundland "quintal" of fish is 112 pounds avoirdupois. 

The export of pickled herring for 1919 amounted to $2,379,000 in 
value and refined cod oil to $2,244,000. 

This distribution of trade, in addition to the points made below in 
discussing the relations of Newfoundland to Great Britain, Canada, 
the West Indies, and the United States, produced in Newfoundland 
a fear that if Newfoundland should adopt preference the foreign 
countries, which provided a market in prewar years for almost 60 per 
cent and in 1918-19 for over 80 per cent of her exports, would retal- 
iate, and that the grant of preferential treatment to British products 
would make impossible the securing of reciprocity with the United 
States. 

RELATIONS WITH GREAT BRITAIN. 

The introduction of a preferential policy in Great Britain presents 
no attraction to Newfoundland. Her chief export, dried cod, can not 
be expected, for various reasons, to be absorbed in any significant 
quantity in the United Kingdom. Of her minor exports, she sends to 
Great Britain lobsters, fish oil, copper and iron ore, and paper and 
wood pulp.^ Because of the limited importance of these articles to 
her trade, the improbability that their production in Newfoundland 
and their market in Great Britain could be greatly expanded, and the 
unlikelihood that Great Britain would impose upon them any prefer- 
ential duties, Newfoundland has had little to expec|^ from preferential 
tariff relations with Great Britain. 



RELATIONS WITH CANADA. 

Newfoundland's commercial relations with Canada closely resemble 
those with Great Britain. The chief article of export to Canada is 
iron ore, which is free of duty in the Canadian tariff and is essential 
to the maintenance of the iron and steel industry in Nova Scotia. 
There are important exports to Canada, it is true, of products of the 
fisheries, but to a large extent they are not intended for Canadian 

' Produced by British newspaper interests for their own use. 
185766°— 22 47 



732 COLOXIAL TARIFF POLICIES. 

consumption but are sent to Canada for reexport to other countries. 
Moreover, Canada enjoys like privileges with Newfoundland in the 
Canadian fisheries, and it is in return for this, as well as a matter of 
general policy, arising perhaps from the fear that Newfoundland 
otherwise would retaliate in her tariff legislation, that the products 
of the Newfoundland fisheries have alwa3^s received, with the excep- 
tion of the period from 1885 to 1892, preferential free admission into 
Canada.^ There are no exports to Canada from Newfoundland in 
significant amount with the exception of iron ore and the products 
of the fisheries. Ne\\^oundland has had nothing further to gain, 
therefore, from a preferential agreement with Canada, and has not 
attempted to negotiate any such arrangement. 

RELATIOXS TV^ITH BRITISH WEST INDIES. 

In 1912 Newfoundland was included in the Canadian arrangement 
for preferential treatment in the British West Indies, although not a 
party to the negotiations. The concession was of real advantage to 
her as she exported substantial quantities of fish to the islands and 
could develop her market there still further under preference. This 
privilege, though extended for a minimum of three years, will in all 
probability not be withdrawn nor be made to apply to Canada alone, 
for the policy of the Imperial Government has always opposed dis- 
crimination by Crown colonies, such as the West Indies, between two 
parts of the Empire. Ne"\,\^oundland has, for example, a valuable 
precedent to cite in the refusal of the imperial authorities to give 
their assent to the Bond-Blaine convention of 1890,^ on the ground 
that its terms involved discrimination against Canada. The Canada- 
West Indies agreement of 1920 does not mention Ne\\^oundland, 
but provides in Article IX that it ''shall not interfere with any 
existing preference." 

Certain other special considerations warrant the inclusion of the 
Dominion in the Canadian agreement. Newfoundland exports 
nothing but fish to the British West Indies, and much of this goes by 
way of Canada. The free admission of NcTv-foundland fish into 
Canada would make the restriction of the preference to Canadian 
fish by the British West Indies difficult of administration. Moreover, 
the admission of Newfoundland fish at the preferential rates gives to 
the British West Indies the assurance that there will be full competi- 
tion and that the Canadian fishermen will not be able to monopolize 
the full benefit of the reduction in duties. For these reasons the 
Canada- West Indies agreement offers no inducement to Newfound- 
land herself to establish a separate preferential arrangement. 

RELATIOXS W^TH THE UNITED STATES. 

Fishermen of Great Britain, Canada, the United States, and France 
as well as those of Newfoundlnd engage in fisheries off the shores of 
the Dominion. Ne^v^oundland's policy has been as far as possible to 

6 " The Canadians, in their own interests, to enable them to secnre supplies of our fish for markets which 
they can not satisfy from their own industry^ aUow Newfoundland fish free entry into their markets." 
Dominions Royal Commission. Gt. Brit. I'arl. Papers. Minutes of Evidence Taken in Newfoundland 
in 1914. Cd. 7898 (1915), p. 40. 

7 See next page. 



HEWFOUISTDLAND. 733 

exclude the French and to permit full privileges to Americans only 
in return for the concession by the United States of equal treatment 
for Newfoundland fish, whether caught by Newfoundlanders or by 
Americans. The exports of fisheries products to the United States 
from Newfoundland have never been of great importance, but it has 
always been the belief in Newfoundland that the American market 
is potentially the most valuable and that the greatest benefit 
Newfoundland could receive would be free admission of its fish into 
the United States. In pursuance of this policy, Newfoundland 
endeavored, throughout a long period, to negotiate with the United 
States a reciprocal agreement which would, in return for compensa- 
tory concessions, secure the opening of the American market to fish 
caught by Newfoundland fishermen. Concentration upon the nego- 
tiations with the United States and fear that the grant of preference 
to British imports would endanger the success of these negotiations 
operated to check the growth of any sentiment in favor of preferential 
trade. 

Newfoundland was a party to the reciprocity treaty of 1854 be- 
tween the United States and the British North American colonies, 
which provided, among other things, for the grant to American fisher- 
men of full fishing privileges and for the mutual free exchange of 
natural products, including the products of the fisheries. The reci- 
procity treaty of 1854 was terminated by the United States on March 
17, 1866, and its termination reopened the fisheries question. A new 
settlement was consummated by the treaty of Washington of 1871, 
in which provision was made, in Articles XVI and XXXII, for the 
reciprocal free admission of the products of the fisheries. In 1883 
the United States gave notice of termination of the fisheries articles 
in the treaty of Washington, and these provisions ceased to operate 
in 1885. In 1888 there was negotiated a new arrangement, embodied 
in the Bayard-Chamberlain treaty, by which the executive depart- 
ment of the United States undertook to recommend to Congress the 
enactment of legislation to remove the duties on the fisheries products 
of Canada and Newfoundland. The Senate, however, refused to 
ratify the treaty. 

In 1890 a new agreement, the Bond-Blaine convention, negotiated 
independently by Newfoundland, provided for the free admission of 
various fisheries products of Newfoundland into the United States in 
return for remissions or reductions of duty in Newfoundland on a 
number of natural and manufactured products of the United States 
and the extension to American fishermen of certain fishing and bait 
privileges in Newfoundland waters. Canada, which was not included 
in the convention, protested against it on the ground that, as ail 
British subjects had common pro|)erty rights in the fisheries, no one 
group could barter the fisheries privileges away for concessions to be 
enjoyed by that group alone; that in this instance, while the Cana- 
dian fishermen would pay the regular high duties of the American 
tariff, the Newfoundland fishermen would pay lower duties. Yield- 
ing to the insistent representations of the Canadian Government, the 
British Government let it be understood that it would not ratify the 
convention. Twelve years later, however, in 1902, Canada withdrew 
her objections to a reciprocal arrangement between Newfoundland 
and the United States and there was negotiated the Bond-Hay con- 
vention, similar in its terms to the Bond-Blaine convention of 1890. 



734 COLONIAL TARIFF POLICIES. 

This agreement was ratified by the British Government, but was 
nullified by amendments in the United States Senate. 

Throughout this period of negotiations fishing and bait privileges 
had been extended by Newfoundland to American fishermen by 
repeatedly renewing the modus vivendi. Upon the failure of the 
Senate to ratify the Bond-Hay convention, the Dominion enforced 
old provisions and enacted new legislation to restrict the use of New- 
foundland territory and fishing facilities by American fishermen, but 
the imperial authorities, upon protest by the United States, prevented 
the enforcement of this legislation. In 1910 the dispute was finally 
settled by arbitration proceedings between the United States and 
Great Britain but without securing to Newfoundland the entry of its 
fish into the American market on equal terms with fish caught in 
Newfoundland waters by American fishermen. Finally the United 
States tarift' act of 1913 provided for the free admission of fish. 

IV. Minor Preferential Provisions.^ 

Although Newfoundland has not established a general measure of 
preference to British imports, the Newfoundland tariff is not alto- 
gether devoid of preferential features. Two provisions, both of minor 
importance, favor British imports. Fish x)f British catch and cure, 
and oil, the product of such fish,^ have been free of duty since 1900 
at least, whereas similar imports from foreign countries pay duties 
of 35 per cent ad valorem. This provision is of little significance, 
however, as Newfoundland imports virtually no fish or fish oil. 

Another preferential provision, of greater importance, enacted 
while the policy of preferential trade was a question of practical 
politics throughout the British Empire, is found in an amendment 
of March 26, 1907, to the custom.s act of 1898, which governs the 
application of the duties on imports. For the section governing the 
valuation of imports for duty the amendmient substitutes the fol- 
lowing : 

Sec. 2. In determining the dutiable value of goods, except when imported from 
Great Britain, Ireland, and Canada, there shall be added to the cost, or the actual 
wholesale price, or fair market value, at the time of exportation, in the principal 
markets of the country fi'om whence the same have been imported into this colony, 
the cost of inland transportation, shipment, and transshipment, with all the expenses 
included, from the place of growth, production, or manufacture, whether by land or 
water, to the vessel in which shipment is made, either in transit or direct to this 
colony * * *. 

This provision is equivalent to a direct tariff preference to Canadian, 
and to a less extent to British products, in their competition with 
American products. Many articles in which there is competition 
between Canada and the United States are subject to duties of from 
30 to 45 per cent ad valorem upon importation into Newfoundland. 
Where the American products are manufactured in the Middle West 

8 Attention may be called to certain other provisions of the Newfoundland tariff, of even less importance 
than those mentioned in the text, which do not operate equally upon articles of all origins. The free hst 
includes " apparel, wearing and other personal and household effects, not merchandise, of British subjects 
dying abroad, but domiciled in Newfoundland." Formerly on the free hst, now dutiable at 10 per cent, 
are "works of art, viz: Paintings in oil or water colors by artists of well-known merit, or copies of the old 
masters by such artists; and paintings in oil and water colors, the production of Newfoundland artists, 
under regulations prescribed by the Governor in Council, and engravings, when produced by the Art 
Union Society of London." On the free list in 1904-1915, now dutiable at 5 cents a gallon, is "molasses 
produced in the West India Islands iu the process of the manufacture of sugar from the juice of the sugar 
cane, including duty on the package in which it is imported." It should be observed that this discrimina- 
tion (molasses of other origin being dutiable under the head of groceries at 35 per cent ad valorem) operates 
in favor of all the West Indies and not simply of the British islands. 

^ Not to include preparations of cod-liver oil. 



NEWFOUNDLAND. 735 

and the Canadian products in Ontario, as is often the case, the extra 
duty levied on the cost of shipping the American article from its 
point of production to New York or Portland may be a substantial 
preference to the Canadian manufacturer upon whose products this 
extra duty is not levied. 

An act of August 12, 1921, raises the export duty on preserved fish 
exported in sailing vessels of non-British registry from 20 to 40 cents 
per quint al.^*^ 

BARGAINING PROVISIONS IN THE NEWFOUNDLAND TARIFF. 

There are a number of provisions in the Newfoundland tariff, 
intended to secure favorable tariff treatment in other countries for 
the products of the Newfoundland fisheries, which authorize under 
certain circumstances special concessionary duties and under other 
circumstances the imposition of special penalty duties. 

Section 12 of the tariff act of 1905 authorizes the Governor in 
Council to remit the whole or any portion of the duties upon wines, 
currants, and raisins imported from any country producing these 
articles in return for the reduction by such country of its duty on 
codfish imported from Newfoundland. By agreement with Greece, 
negotiated in 1905, currants and vSultana raisins imported from that 
country are admitted into Newfoundland free of duty in return for 
the reduction by Greece of its duty on codfish imported from New- 
foundland. Imports into Newfoundland of currants and raisins from 
all other countries, British or foreign, are subject to duty at 3 cents 
a pound. ^^ But no British country except Australia produces any 
considerable quantity of raisins for export. 

vSection 17 authorizes the imposition of an export duty on herring 
when exported to a country which admits Newfoundland herring 
free of duty if imported in vessels belonging to that country, but 
subjects such imports to duty when imported in Newfoundland 
vessels. There is no indication that this provision has ever been 
brought into operation. 

Section 15 of the tariff act authorizes the remission or reduction of 
duties on fish imported into Newfoundland from any country which 
makes a corresponding reduction in its duties on fish imported from 
Newfoundland. No instance has been found of this provision's 
being put into operation. 

SURTAXES AS POSSIBLE PENALTY ON NONRECIPROCAL TREATMENT IN 

UNITED STATES. 

Section 16 of the tariff act requires that, in addition to the duties 
provided for in the general tariff, certain specified surtaxes shall be 
imposed on a number of specified articles, when imported '^from 
countries the fishermen of which have the privilege of taking codfish 
upon all parts of the coast of Newfoundland and its dependencies, 
and in which country duties are or hereafter shall be levied upon fish, 
or the produce of the fisheries, exported from this colony or its 

10 Commerce Reports, Oct. 10, 1921, p. 360. 

" Plus (since Aug. 12, 1921) a surtax of 25 per cent of the duty, and a sales tax of 5 per cent ad valorem. 
Greek products are exempt from the sales tax. 

'2 The proviso is made, however, that the governor in council may, "at any time when it shall be made 
to appear to him to be for the interest of the colony," suspend the operation of this clause for a limited 
period in respect of all or any of the above-mentioned articles. 



736 



COLONIAL TARIFF POLICIES. 



dependencies to such countries."^- The general duties and the sur- 
taxes on the articles named in this clause are shown in Table 5. 

Table 5. — Newfoundland' s jyenalty duties. 



ArticJe. 


Unit. 


General 
duty. 


Surtax 

under 

section 

16. 


Flour .... 


Barrel 

do 


Free. 

$1.50 

3. .50 

40. 00-50. 00 

.05 

35 per cent. 

3.00 

.05 

.10 

.20 

} '■> 


$0. 75 


Pork 


.75 


Butter .' 


100 pounds 

do 


.75 


Tobacco 


5.00 




Gallon 


.05 


Com meal 

Hay 


Barrel 

Short ton 


.25 
5.00 


Oats 


Bushel 

do 


.10 




.25 


Turnips . 


.do 


25 


Cabbages 

Unenumerated vegetables ... 


Dozen heads 


f .40 
\30perct. 









1 Canned, 35 per cent ad valorem; fresh, 30 per cent ad valorem. 

Canada, Great Britain, France, and the United States all enjoy 
fishing privileges in Newfoundland. Canada and Great Britain admit 
the products of the Newfoundland fisheries free of duty, while Nev/- 
foundland does not import from France any of the items enumerated. 
The provision is directed, therefore, against the United States and 
would establish, if put into effect, an important preference to Cana- 
dian and in less degree to British trade. Since 1913 fish have been 
admitted into the United States free of duty. There is no evidence 
that this provision had ever been brought into operation before that 
date. It can not be assumed, however, that it will not be put in 
force if the American general tariff bill which has already passed the 
House, and which makes fish dutiable, becomes law. Table 6 shows 
the importance of the articles mentioned in the trade of the United 
States with Newfoundland and the extent of Canadian competition 
for this trade. 



Table 6. — Exports to Newfoundland of the articles named in the penalty tariff provision. 

[Average values of exports of domestic products, in thousands of dollars, from, the United States for the 
three calendar years, 1918-1920, and. from Canada for the three fiscal years ended Mar, 31, 1921.] 



Article. 



Wheat flour 

Corn meal 

Oats 

Beans 

Peas 

Potatoes 

Turnips 

Onions 

All other vegetables 
Butter 



From 


i! 

From ii 


United 


Canada i \ 


States 


(Cana- ll 


(U.S. 


dian ' 


cur- 


cur- 


rency). 


rency). 


.53 


3,879 ! 


135 


28 


38 


530 Ij 


6 


6 


2 


42 i 


7 


133 il 


0) 


11 i^ 


20 


(1) ' 


103 


58 il 


4 


233 1 



Article. 



Pork 

Hay 

Kerosene 

Tobacco and manufactures of. 



Total of selected articles. 



Total exports 
land 



to Mewfound- 



From 
United 
States 
(U.S. 
cur- 
rency). 



342 

321 



13, 433 



From 
Canada 
(Cana- 
dian 
cur- 
rency). 



68 
190 
50 

22 



14, 732 



1 Not shown separatelv. 

- Information available only for 1919. 



(BihliograpTiy on page 8S2.) 



Chapter XV. 

PEEFERENTIAL TARIFFS IN BRITISH SOUTH 

AFRICA. 



CONTENTS. 



Introduction 

I. Tariff history, 1795-1903: 

Preferential system, 1795-1855 

The tariff pohcy of Cajxe Colony, 



Page. 

737 



1855- 



II 



739 



740 
741 
742 



42 



744 



Early tariffs of other South African terri- 
tories 

First customs union, 1889 

Customsunion conventions, 1896 and 1898. 
Establishment and growth of British pref- 
erence, 1903-1910: 
British preference estabUshed by customs 

convention of 1903 

The preferential provision in the cus- 
toms convention of 1903 

Table 1.— Articles on which a pref- 
erence of 25 per cent of the 
duties was granted and the 
gener-el rates of duty thereon. . 
The customs convention of 1903 pro- 
tective in character 

Increase of preference by customs conven- 
tion of 1908 

Opposition to preference in the colonies- 
Protocol of 1908 to customs convention of 

1906 

III. Developments in the tariff since 1910: 
Formation of the Union of South Africa, 

1910 .,... 

Revision of the tariff, 1914-15 

Tariff legislation, 1915-1920 750 

Present position of preferential pohey in 

South Africa 751 

Preferences to British trade in addition to 
tariff rebates 751 



44 



45 



745 
74& 



747 



748 
749 



Page. 

IV. Other trade arrangements of British col- 

onies in South Africa: 

Preference extended ta Canada, 1904 752 

Extension of preference to Australia, 

1906 752 

Extension of preference to New Zealand, 

1908 753 

Reciprocal trade arrangements made by 

the Transvaal and Swaziland with 

Mozambique 754 

V. Preferences in Rhodesia and South- West 

Africa 754 

Preferential tariffs in Rhodesia— 

CecQ Rhodes and British preference 

in Rhodesia 755 

"Clause 47" 756 

Additional preference in Rhodesia in 

1906 .- 757 

Preferential provisions of the Rho- 

desian tariffs 757 

Table 2.— Sample rates illustrat- 
ing the manner in which Clause 

47 operates 758 

Clause 47 results in substantial in- 
crease of preference 758 

Table 3.— Rates under Rhode- 
sian preference compared with 
those under Union of South 

Africa preference 759 

Northeastern Rhodesia included in the 
" Conventional Basin of the Congo" . . 759 

Walvis Bay 760 

The South-West Africa Protectorate 
(mandated territory) 760 

VI. Summary 760 



Introduction, 



The term '^ British South Africa '' is generally understood, and is 
here used, to include (1) the four Provinces of the Union of South 
Africa, namely, Cape Colony, the Transvaal, the Orange Free State, 
and Natal, (2) the British Crown territories of Basutoland and 
Swaziland, and the British protectorate of Bechuanaland, (S) the 
territories under the administration of the British South Africa Co., 
namely, Southern Rhodesia and Northern Rhodesia, (4) since 1915 
German Southwest Africa, now known as the South-West Africa Protec- 
torate and administered by the Union of South Africa under mandate 
from the League of Nations. All of these colonies and territories, 
except part of Northern Rhodesia, are in the South African Customs 
Union. 

The first European settlement in what is now known as British 
South Africa w^as made by the Netherlands East India Co., which 
occupied the Cape of Good Hope from 1652 to 1795. In 1795 the 
Cape was seized by the British, and it was occupied by them until 

737 



738 COLONIAL TAEIFF POLICIES. 

1803, when it was restored to Dutch rule. In January, 1806, the 
Cape was once more surrendered to the British, and from this date 
has remained uninterruptedly a British possession. Until 1854 Cape 
Colony was governed as a Crown colony. In that year it was granted 
representative government and in 1872 responsible governm.ent. 
Natal was made a separate colony with representative government 
in 1856 and was given responsible government in 1893. The Trans- 
vaal and the Orange Free State, which were settled by Dutch colonists 
who had moved north at various times were independent or semi- 
independent republics from their organization in 1852 and 1854, 
respectively, until their conquest in the Boer War, except for an 
interval, of four years (1877-1881), when they were under British 
sovereignty. During the period of reconstruction after the Boer War, 
they were governed as Crown colonies, but in 1906 responsible gov- 
ernment was granted to the Transvaal and in 1907 to the Orange 
Free State. In 1910 Cape Colony, the Transvaal, the Orange Free 
State, and Natal entered into political union, forming the ''Union 
of South Africa." To this union as mandatory the conquered German 
territory of Southwest Africa has been entrusted. 

Rhodesia was founded by Cecil Rhodes in 1889, while premier of 
Ca{)e Colony, under a British charter entrusting the British South 
Africa Co. with the administration of the territory. In Southern 
Rhodesia the company is assisted by a partially elective legislative 
council. 

Basiitoland, Swaziland, and the Bechuanaland Protectorate are 
territories inhabited almost exclusively by natives and are governed 
by their chiefs under the supervision of an administrator responsible 
to the Imperial Government. 

I. Tariff History, 1795-1903. 

PREFERENTIAL SYSTEM, 1795-1855. 

Up to 1795 the Dutch East India Co. enjoyed a monopoly of the 
trade of the Cape and exercised strict and narrow control. Between 
1795 and 1806 the British and the Dutch followed a more liberal 
policy, but many restrictions remained. Throughout the period 
of British occupation and government of the Cape as a Crown 
colony. Imperial ordinances enforced preferential treatment of 
British imports into the colony. From 1795 to 1855 the rates of 
duty on foreign goods ranged from 10 to 15 per cent ad valorem,^ 
whereas from 1807 to 1813 British goods entered free and in the other 
years paid duties rarely exceeding 3 or 3i per cent and never exceeding 
5 per cent. 

During the whole of this period (1795-1855) the products of the 
colony enjoyed a tariff preference in Great Britain. This was 
especially true of wines, which were an important export of the Cape 
during the first half of the nineteenth century. The Imperial Govern- 
ment did its utmost to foster the industry in the colony and in 1813 
granted to Cape wines a preference of two-thirds of the duties payable 
on the competing wines of Spain and Portugal. The preference was 
reduced from time to time, but while it continued in substantial 

1 But as low as 5 per cent when imported in British ships. 



BRITISH SOUTH AFRICA. 739 

amount the wine industry flourished in the Cape. The successive 
reductions in the preference gave rise to considerable protest and to 
prolonged and bitter agitation in the colony. 

The preferences in the colony to British goods were abolished in 
1855 by the Cape upon its acquiring authority to enact its own 
tariffs. In 1860 Great Britain, in accordance with the stipulations 
of the Cobden ireaty with France, reduced the duties on foreign 
wines, thus extinguishing the preference to colonial wines. Most of 
the other preferences on colonial products had been abolished by 
previous legislation. The arrangement of the new wine duties in 
1861 and 1862 without preference to colonial wines and on the basis 
of proof strength had an extremely adverse effect, because of the 
relatively high ajcoholic content of South African wines, on the 
Cape wine industry and practically excluded its products from the 
English market.^ 



In the second half of the nineteenth century the discovery of rich 
mine fields in the Cape resulted in a decline in the relative importance 
of agriculture and in the development of a South African market for 
agricultural products. South Africa changed gradually from an ex- 
porter to an importer of wheat and flour, meat, dairy products, and 
other foodstuffs. The wool and ostrich feather farmers who depended 
on the export trade to market their products were favorable to a 
policy of free trade, and, in the absence of domestic manufacturing 
industries, support for protective duties came only from the producers 
of foodstuffs. The ability to levy duties on goods passing through 
the ports of the Cape but destined for the inland Republics provided 
an additional factor, however, in support of moderately high customs 
duties. The tariff, therefore, was retained mainly as a means of 
collecting revenue but to some extent also because of the protection 
it afforded to domestic producers of foodstuffs.^ 

The wine growers of the Cape did not forget the advantages they 
had enjoyed under the British preferential policy prior to 1860, and 
what sentiment there was in the Cape in favor of the policy of im- 
perial preference was found in these years chiefly amongst them and 
the politicians who spoke for them. These were largely Dutch, and 
the Afrikander Bond, under the leadership of Mr. Jan Hofmeyr, 
spoke for them in urging upon Great Britain the policy of preferen- 
tial treatment of colonial products. Mr. Hofmeyr, at the imperial 
conference in 1887, at London, made a strong plea for the establish- 
ment of intra-imperial preference. In the Cape, Mr. Hofmeyr had 
already gained, for his program of protection at home and preference 
in England to the agricultural products of the Cape, the support of 
Mr. Cecil Rhodes, a power in Cape politics, and soon afterwards 
premier of the Cape. Mr. Rhodes later explained the origin of his 
political partnership with the Bond, the Dutch political organiza- 
tion, as follows : 

In these days (the eighties) Hofmeyr was chiefly interested in withstandino- free 
trade and upholding protection on behalf of the Dutch, who were agriculturists and 

2Cf . for the tariff history of this earlj' period, Sarauel Evans, Preference and Protection in British South 
Africa, Ch. XII, in The Burden of Protection, London, 1912, pubhshed for The International Free Trade 
League. 

3Cf. Sir Lewis Michell, Life of the Right Hon. Cecil J. Rhodes, 1910, vol. 1, p. 95, and James Bryce, 
Impressions of South Africa, 1897 ed., p. 462. 



740 coLo:^riAL taeiff policies. 

wine growers. I had a policy of my own, which I never disguised from Hofmeyr. 
It was to keep open the road to the north, to secure for British South Africa room for 
expansion, and to leave time and circumstances to bring about an inevitable federation. 
I therefore struck a bargain with him by which I undertook to defend the protective 
system of €ape Colony and he pledged himself in the name of the Bond not to throw 
any obstacles in the way of northern expansion. * * * 4 

Mr. Rhodes became an ardent advocate of imperial preference, and 
urged it upon the imperial authorities at every opportunity. In 
1891^ reporting a conversation with Lord Salisbury, then premier of 
England, on this subject, he said: 

, I adopted the suggestions I had had from Mr, Hofmeyr about a differential rate, 
and said the greatest tie England could make with the Cape Colony was to return to 
the system of 1858 [i. e. , preference to colonial products]. * * * The right course 
for the English people is to offer this colony some preferential tariff in regard to their 
wines over the wines of France and Spain and so give them a practical commercial 
advantage.^ 

On June 29, 1893, in the Cape Parliament, Mr. Rhodes read a letter 
he had written to Sir William Harcourt, showing that the Cobden 
treaty had ruined the Cape wine industry, and urging closer commer- 
cial union between the mother country and her colonies, based on a 
system of reciprocal preferences. 

EARLY TARIFFS OF OTHER SOUTH AFRICAN TERRITORIES. 

The Transvaal and the Orange Free State were not possessed of 
seaports. Their chief industry was mining and as most of their 
foodstuffs and other necessaries were imported from overseas, their 
imports had to pass through the coast colonies. The tariff history 
of the Cape and of Natal up to 1898 is largely a story of competition 
with each other and with Portuguese East Africa for the transit 
trade to and from the inland Republics and for the opportunity of 
taxing the imports of these Republics as they passed through the 
ports of coast colonies. Until 1888 the Cape and Natal insisted on 
retaining all the revenue thus obtained from the taxation of imports 
from overseas into the Transvaal and the Orange Free State. Until 
1898 Natal, partly in order to retain as mucn as possible of this 
transit trade for her own ports, maintained her tariff on a low level. 
This exploitation by the coast colonies of their advantageous geo- 
graphical position was a source of constant friction and ill-feeling 
in the relations of the RepubKcs with the British colonies. 

In the Orange Free State and the Transvaal the tariffs were 
low and with respect to many items were merely nominal. There 
were no domestic industries to protect and other sources of revenue 
were more conveniently available. In 1875 the Transvaal succeeded in 
negotiating a treaty with Portugal ^ which freed her from the customs 
exactions of the British coast colonies. This treaty provided for the 
free interchange of the products of the Transvaal and of Portuguese 
East Africa and limited to 3 per cent ad valorem the duties which 
Portuguese East Africa could impose on goods imported from overseas 
to enter the Transvaal via Louren^o Marques on Delagoa Bay. The 

4 Micbell, Sir Lewis: Op. cit.^ vol. 1^ pp. 230, 231. 

6 Evans, Samuel: Op. cit., p. 94. 

6 Brit, and For. State Papers, vol. 67, pp. 1256-1^5. 



BRITISH SOUTH AFRICA. 741 

completion of the railway from Delagoa Bay to the Transvaal further 
reduced its dependence on the British colonial ports. In order to 
divert traffic to this railway from the British, the Transvaal attempted 
to close the ^'drifts/' or fords, over the rivers separating her from the 
British colonies to the south, and this added to the friction between 
them. 

The discovery of the gold mines in the eighties brought an inrush 
of foreign population into the Transvaal, and in order to shift more 
of the burden of revenue to these newcomers (^^Uitlanders"), who 
consumed imported products more largely than did the settled pop- 
ulation, she substantially raised customs duties in the nineties, 

FIRST CUSTOMS UNION, 1889. 

As a result of a conference held at Bloemfontein in 1889, Cape 
Colony and the Orange Free State agreed to enter into a customs 
union to take effect in July, 1889. The convention provided for free 
trade in South African products between the two countries and for a 
uniform tariff on imports from outside the union. The Orange Free 
State was to secure on her own imports from overseas 75 per cent of 
the duties collected in the Cape. 

An interesting point concerning this customs union is that it marks 
a divergence from the position taken by Great Britain with regard to 
colonial tariffs since her adoption of the policy of free trade. The 
convention, which received the sanction of the imperial authorities, 
permitted Cape Colony to differentiate in her tariff in favor of a 
foreign country, the Orange Free State, as against all other coun- 
tries, British and foreign. The only other similar instance in the 
history of the British Empire, the reciprocity treaty of Canada with 
the United States, of 1854, came before the complete victory of free 
trade in England.^ On the other hand, it is to be noted that Cape 
Colony had been given representative government and a large measure 
of fiscal autonomy by the imperial authorities. Moreover, the com- 
mercial dependence of the Orange Free State on the ports of Cape 
Colony and the absence of any important exports from the Orange 
Free State which could compete in Cape Colony with the products of 
other countries were factors appearing to justify special treatment. 
Of even greater significance, however, was the inclusion later of the 
British Crown territories in the union, for with respect to them there 
were no local legislatures to whose wishes policy might require con- 
sideration to be given. 

In the preamble to the convention it was stated that it was the 
wish of all parties that a general customs union should be established 
between all the colonies and States of South Africa. Natal and the 
Transvaal had been invited to join, but both had refused. Natal 
was unwilling to join because the Cape refused to admit Natal sugar 
free of duty under the union. The Transvaal refused because hsr 
treaty with Portuguese East Africa gave her relief outside of the union 
from the levy by the coast colonies of customs duties on her imports 
in transit from overseas, and because she had few exports for which 
a free market in the remainder of South Africa was of substantial 
advantage. 

^ See p. 661. Newfoundland's concession on Greek currants and raisins (p. 735) is similar, but so lim- 
ited as to be negligible. 



742 COLONIAL TAEIFF POLICIES. 

In 1890, 1891, and 1892 protocols were added to tlie convention 
of 1889,^ admitting the British Crown territories of Bechuanaland,® 
Basutoland,^° and the Bechuanaland Protectorate ^^ into the customs 
union. In 1889 a treaty was conchided between the Transvaal and 
the Orange Free State establishmg reciprocal free trade. 

CUSTOMS UXIOX CONVEXTIOXS, 1896 AND 1898. 

The convention of 1889 remained substantial!}^ unchanged until 
1896. In that 3^ear a customs conference was held at Bloemfontein 
to consider the establishment of a general South African customs 
union. The Transvaal was not represented, while Mozambique 
decided that it could not be represented unless the Transvaal took 
part in the conference. Natal eventually withdrew, and the confer- 
ence led only to an amendment of the convention of 1889, providing 
for a complete revision of the tariff. 

In 1898 another conference was held at which Cape Colony, the 
Orange Free State, and Natal were represented with the result that 
Natal agreed to enter the customs union. 

II. Establishment and Growth of BraTisn Preference, 1903- 

1910. 

BRITISH PREFERENCE ESTABLISHED BY CUSTOMS CONVENTION 

OF 1903. 

In May, 1903, another customs conference was held. In the 
period between the conference of 1898 and that of 1903 the South 
African War had been fought and the Transvaal and Orange Free 
State, now Orange River Colony, had become British Cro^vn colonies 
with Lord Milner as governor of both. The conference was presided 
over by Milner and was attended by delegates from Cape Colony, 
Natal, Orange River Colony, the Transvaal, wSouthern Rhodesia, and 
the British Cro^^Ti territories. All of the colonies represented agreed 
to enter into a customs union providing for the free interchange of 
each other's products and for a common tariff on foreign imports. 

The conference agreed to incorporate in the customs union tariff 
the principle of preference to imports from Great Britain and from 
reciprocating British colonies. Milner's was the outstanding influ- 
ence in securing the assent of the delegates to the principle of British 
preference, and it was only through earnest and persistent efforts that 
he was finally successful. In Cape Colony there was strong opposi- 
tion both from the Dutch party and from those who feared that the 
establishment of British preference in South Africa would result in 
retaliation by Germany against Cape wools, of which she was an im- 
portant purchaser. It was pointed out in opposition to the proposals 
that the bulk of the imports into South Africa was already British, 
and that tariff discrimination in favor of Great Britain could not 
therefore appreciably change the direction of trade. The preferential 
reduction of duties, on the other hand, so it was argued, would in- 
volve a serious loss to the colonial revenues without a compensatory 
benefit to the consumers. 

8 Brit, and For. State Papers, vol. SO, p. 1054. i" Ibid., a-o1. S3, pp. 357-360. 

9 Ibid., vol. 82, pp. 640-644. " Ibid., vol. 90 (1897-8), pp. 1069-1071. 



BRITISH SOUTH AFRICA. 



743 



Of the authorities in London, only Joseph Chamberlain gave active 
support to Milner, and many were in open or tacit opposition. Cham- 
berlain, indeed, suggested that the acceptance of preference by the 
Dutch at the Cape would be a test of their loyalty to the Empire,** 
but Milner found reason to complain of inadequate support for his 
project from London. On March 17, 1903, just after Chamberlain's 
return from South Africa, Milner sent him a telegram to enlist his 
further support in inducing the British Government to support the 
project: 

I am rather alarmed at the apparent complete indifference at home to the proposed 
adoption by South Africa of preference to British goods. Our difficulty was the Cape, 
which feared German reprisals against its large wool export to Germany. Now our 
telegrams from Europe speak only of dissatisfaction and threats in Germany. Eng- 
land seems absolutely indiiferent. It is, I know, too much to expect that England 
should protect her colonies against being punished by foreign nations for going out 
of the way to do Great Britain a good turn. But they do expect some decided marks 
of appreciation. Any reciprocal advantage, however small, or even the hope of it 
some day would encourage the sentiment here which is very strong but will not live 
permanently on nothing. At present there are no South African_ exports to Great 
Britain which are taxed, therefore reciprocity is impossible. But 1 believe it would 
be quite sufficient if something, however slight, w^as done for Canada.^^ This would 
recognize the principle of reciprocity, and South Africa might hope to benefit from 
that some day. But it is not really the small and hj-pothetical advantages which 
anybody worries about but proof that England cares. ^* 

At the conference itself there was considerable opposition to the 
policy, chiefly from the Gape delegates. Natal was favorably inclined 
toward the proposals. Milner, as administrator of the Transvaal and 
the Orange River Colony, controlled the appointment of their dele- 
gates. The British officials governing Rhodesia on behalf of the 
British South Africa Co. supported the policy. The Crown territories, 
Basutoiand, Swaziland, and the Bechuanaland Protectorate were 
committed to it by their administrator. Lord Milner. The colonies 
represented at the conference. Cape Colony, the Transvaal, the Orange 
Free State, Natal, and Southern Rhodesia, each had one vote, 
although Cape Colony had a white population of 580,000, Natal of 
only 95,000, and Southern Rhodesia of only 12,000. Only the Cape 
and Natal had responsible government at the time, and the Cape 
delegates, representing more than half of the total white population 
of British South Africa, came to the conference publicly pledged to 
their Parliament not to agree to any proposals for a preferential tariff .^^ 



12 The Economist (London) , July 4, 1903, p. 1169. . 

13 Canada had granted a preference to British products in 1897. 

n Worsfold, W. B.; The Reconstruction of the New Colonies under Lord Milner, 1913, Vol. II, pp. 314, 315. 

15 Evans, Samuel: Op. cit., p. 96. A majority of the white population of British South Africa were of 
Dutch origin and were generally opposed to one-sided preference to British imports. The list of delegates 
at the conference, given below, shows the extent to which the Dutch were underrepresented. 

SOUTH AFRICAN CONFEEENCE, 1903. 



President, Viscount Milner, High Commissioner. 



Cape Colony delegates: 

Sir Gordon Sprigg. 

T. B. King. 

J. C. Molteno. 

W. Macintosh. 

L. Wiener. 
Orange River Colony delegates: 

H. F. WUson. 

A. Brown. 

J. G. Eraser. 

W. Ehrlich. 

P. BUgnaut. 



Natal delegates: 

Sir. Albert Himer. 

F. R. Moor. 
J. Hyslop. 

Sir James Hulett. 

G. Payne. 
Transvaal delegates: 

Sir Godfrey Lagden. 

P. Duncan. 

Sir George Farrar. 

W. Hosken. 

N.J. Breytenbach. 



Rhodesia delegates: 
W. H. Milton. 
F.J. Newton. 
W. Dempster. 
Lieut. Col. Heyman. 
Sir Lewis Michell. 



744 COLOIJ^IAL TARIFF POLICIES. 

T\Tieii tlie customs convention vras debated in the Gape Parliament 
in June, 1903, the delegates declared that they were forced to accept 
the proposal for British preference, as otherwise the Cape would have 
been '^isolated and shut out of her main market, the Transvaal." 
Nevertheless the preference proposals were carried in the Cape House 
of Assembly only by the casting vote of the speaker, and in the Legis- 
lative Council only by the casting vote of the president. ^^ 

THE PREFERENTIAL PROVISION IN THE CUSTOMS CONVENTION OF 1903. 

The provision of the convention relating to British preference 
stipulated that a rebate of custom-s duties should be granted to 
imports from the United Kingdom of British products to the extent 
of 25 per cent of the general duties sj)ecified in the convention on 
articles made subject to ad valorem duties, unless the duties specified 
were 2^ per cent ad valorem, when the entire duty was to be remitted 
on British goods. No preference was granted on articles subject 
to specific duties or enumerated in the free list. But the committee 
appointed to draft the new tariff was instructed to give special 
attention, in reviewing the free list and the list of articles subject 
to specific duties in the customs convention then in force, to the 
exj)ediency of transferring items from these lists to the lists of 
articles subject to ad valorem rates, '^with a view to giving a benefit 
to British trade. "^^ 

The conference also passed the following resolution supporting the 
Chamberlain policy of intra-imperial preference : 

That this conference recognizes that in the present circumstances it is not practi- 
cable to adopt a general system of free trade as between the mother country and the 
oversea British Dominions, but recommends that if, in the course of time, an export 
trade from South Africa should be developed, the governments of the various colonies 
of South Africa should respectfully urge on His Majesty's Government the expediency 
of granting in the United Kingdom preferential treatment to the products and manu- 
factures of the colonies either by exemption from or reduction of duties now or 
hereafter imposed. ^^ 

Table 1. — Articles on which a preference of 25 per cent of the duties was granted and the 
general rates of duty thereon}^ 

Per cent 
ad valorem. 

Motor vehicles, and parts of, but not including traction engines and power 
lorries 5 

Bicycles and parts 12^ 

Carriages, carts, wagons, etc. , and parts of 12i 

Coats made of blanketing or baize, of cotton or wool 

Shawls 

Fireworks 

Plajiing cards 

Fancy confectionery 

Flavoring extracts and extracts for perfumery 

Medicines, patent or proprietary 

Oils, essential or perfumed 

Perfumery, cosmetics, dyes, powders, soap, and other toilet preparations, and 
soap powders and extracts 

All other articles, not charged with duty elsewhere in the con^'ention and not 
enumerated in the free list 10 

laPulsford, E.: Commerce and The Empire, 1914 and After, 1917, pp. 147,148. 

1' Minutes of the Customs Conference, Gt. Brit. Pari. Papers, Cd., 1640, 1903, Vol. XLV, p. 8- 

i« Ibid., P. 5. 

19 Gt. Brit., Pari. Papers, 1903. Vol. XLV, Cd., 1599. 



25 



BRITISH SOUTH AFRICA. 745 

The articles on which the general duty of 2 J per cent ad valorem 
was entirely rebated when of British origin comprised 27 tariff items 
of considerable importance, consisting largely of machinery and 
supplies for industrial use. 

The decision as to whether any manufactured goods were entitled 
to the preference as ^'bona fide the manufacture of the United 
Kingdom" was entrusted to the minister of customs of the party to 
the convention immediately concerned. 

The establishment of preference to British imports by the conven- 
tion of 1903 marked the first instance, since the abolition in 1855 of 
the old colonial preferences to British products, of the sanction by 
the imperial authorities of the grant by colonies of tariff preference 
to British trade. -° It was a distinct and important departure by 
Great Britain from the policy otherwise uniformly followed since 
her adoption of free trade, not to permit British possessions under 
direct imperial control to differentiate in their tariff treatment 
between British and foreign products. 

THE CUSTOMS CONVENTION OF 1903 PROTECTIVE IN CHARACTER. 

The new tariff was for the first time distinctly and avowedly pro- 
tective in character. The committee appointed by the conference 
had been instructed to draw up a tariff that would afford ^'a due 
measure of protection * * * to the products and industries of 
South Africa," and the tariff agreed upon was in accordance with 
this principle. In general it was a compromise between the tariff 
of the existing customs union and that of the Transvaal. It had been 
the practice in Cape Colony to levy higher through railway rates on 
the Cape railwaj^s on imports from overseas to the inland colonies 
than on Cape products, and this practice was maintained by the new 
convention, although in modified form. But the transit duties 
hitherto charged by the coast colonies on goods destined for the 
inland colonies were abolished. The former policy (followed during 
the period when Rhodes was dominant in Cape politics) of withholding 
tariff protection from_ manufacturing industries was definitely 
abandoned. Lord Milner was a protectionist and his views were 
decisive in shaping the policy of the Crown colonies, whose influence 
was thus thrown on the side of protection. 

INCREASE OF PREFERENCE BY CUSTOMS CONVENTION OF 1906. 

Another customs conference, held in 1906 at Pietermaritzburg, 
agreed upon a new convention which was later ratified by the several 
colonies. This provided for schedules of duties substantially higher 
than those imposed under the previous convention. The general ad 
valorem rate on goods not specially rated and not enumerated on the 
free list was raised from 10 per cent to 15 per cent. 

The preference to British products was extended to many articles 
subject to specific duties and on these articles the rebate was made 
specific and varied from item to item. The principal preferential 
rebates on items in this schedule were 3 cents (lid.) a gallon on ale 
and beer, 1 cent a pound on blasting powder, 30 cents a short ton 

20 For a minor preference of the same date in the Federated Malay States, see p. 337. 



746 coLo:s'iAL taeiff policies. 

on cement, 1 cent a pound on manufactured, unsweetened cocoa, 
4 cents a hundred pounds on wheat, and 6 cents a hundred pounds 
on wheat flour, 4 cents a hundred pounds on hay, and 14 cents a 
hundred pounds on soap and soap powder. 

On items subject to ad valorem duties the preference was made 
uniform at 3 per cent ad valorem, and on items subject to a general 
duty of 3 per cent ad valorem ^^ the entire duty was remitted on 
imports entitled to the preference. 

For several items which had been subject to a preference of 25 per 
cent of the general duty and on which the general duty had exceeded 
12 per cent ad valorem the new convention involved a reduction in 
the amount of the preference. As a whole, however, the convention 
of 1906, by extending the preference to a number of articles subject 
to specific duties and by increasing the preferential rebate on articles 
subject to ad valorem rates to 3 per cent ad valorem from 2| per 
cent ad valorem, made a substantial increase in the extent of the 
preference granted to British imports. There was no important 
instance of the withdrawal of the preference from an item previously 
enjoying it. Of the 129 items enumerated in the tariff as subject 
to duty preference was withheld on only 16. In addition a preference 
of 3 per cent ad valorem was granted on the important class of articles 
not specially enumerated as subject to a specified duty and not 
enumerated in the free list, the general duty upon these articles being 
15 per cent ad valorem and the preferential duty 12 per cent ad 
valorem. 

This new convention, which came into effect July 1, 1906, carried 
the policy of tariff protection to domestic industries still further, and 
embodied in general an all-round increase in duties. With regard to 
the increase in the preference granted to British goods, it is again to 
be noted that of the colonies represented at the conference only 
Cape Colony and Natal had responsible governm.ent, and that the 
British Government through its officials in the Crown colonies had a 
majority of the votes in the conference. Although it continued and 
even extended the policy of granting preference to British imports, 
the conference unanimously passed a resolution indicating that the 
people of South Africa were not wholly in sympathy with the policy, 
at least in its one-sided form. The resolution was as follows: 

That while the preference accorded to goods and articles the growth, produce, or 
manufacture of the United Kingdom in the tariff now agreed upon is accorded fully 
and without any condition as to reciprocal treatment on the part of the United King- 
dom, the conference desires to record its opinion that the policy of preferential trade 
would be more acceptable to the people of South Africa if a reciprocal preference 
were accorded to their products in the tariff of the United Kingdom; and that, if such 
reciprocity were accorded, it is the opinion of this conference that the preference now 
accorded would be considerably increased. ^2 

OPPOSITION TO PREFERENCE IN THE COLONIES. 

There was considerable opposition in the South African colonies 
to the new convention, due to dissatisfaction both with the customs 
rates and with the continuance of the preference. The convention 
was eventually ratified, apparently because the only alternative was 

*i 2^ per cent ad valorem was the rate for this class in the convention of 1903. 
" Jebb, R.: The Imperial Conference, 1911, Vol. II, p. 63. 



BEITISH SOUTH AFRICA. 747 

the break-up of the customs union. Lord Selborne, who, upon the 
retirement of Lord Milner in 1905, became high commissioner for 
South Africa and governor of the Transvaal, wrote in his Federation 
Dispatch of January 7, 1907, that ^Hhe present customs convention 
does not represent a South African customs policy; it is a compro- 
mise between five colonial custom policies almost universally dis- 
liked, tolerated only because men shrink aghast from the conse- 
quences of a disruption of the convention.'' 

^ ''The tariff agreed upon," writes a student of South African tariff 
history, ''was generally condemned by public bodies in the Transvaal 
and in the Orange Free State. It was im.posed on the Transvaal by 
the vote of the official members of the nominated legislative council 
who argued that the tariff was of a temporary character, could be 
altered at the end of two years, and that the Transvaal had to accept 
it in order to avoid disruption of the customs union on the eve of the 
establishment of responsible government. All the unofficial members 
except one voted against the Government in the matter. "^^ 

In the Cape House of Assembly, in the course of the debate on the 
new convention, a motion proposing that the Government give notice 
of abolition of all preferences or discriminating duties was defeated 
by 49 votes to 38, the votes for the motion coming almost wholly 
from Dutch members and the votes against from English members.^^ 
In the legislative council an amendment adding to the motion approv- 
ing the convention, the reservation " though it regrets the inclusion 
in the said convention of the principle of preferential duties," was 
carried by 14 votes to 11.^^ Mr, Jo W. Sauer, at that time a member 
of the opposition party in the Cape Assembly, declared in a speech 
on April 10, 1907, that the majority of the electors were opposed to 
a policy of preference whereby they "gave a good deal and got noth- 
ing in return," and would vote it down if they were free from the 
entanglement of the customs union.^® 

PROTOCOL OF 1908 TO CUSTOMS CONVENTION OF 1906., 

There was considerable dissatisfaction in the Transvaal with the 
customs convention, owing chiefly to the import duties on foodstuffs 
imposed as protection to the Cape farmers. Early in 1908 the 
Transvaal, which hj this time had been granted responsible govern- 
ment, threatened to withdraw from the customs union. An investi- 
gation of the tariff situation was made by a Transvaal commission 
in that year and in its report it made the following comment on the 
preference to British products : 

In the course of the evidence the question of preferential treatment of Great Britain 
and reciprocating colonies was brought forward, and although the commission do not 
feel called upon to express any opinion upon the subject, yet they desire to point 
out that in most instances the benefit of the lower duty does not accrue to the manu- 
facturer or seller on the other side but to the importer or the consumer here; so that 
it does not really constitute a grant to the former so much as a lower rate of duty to 
the' taxpayer in this country and the abolition of the preference without a corre- 
sponding reduction of duties would mean increased taxation. The system perhaps 
would be better described as a surtax upon foreign goods rather than a preference 
in favor of British goods. ^^ 

23 Evans, Samuel: Op. cit., p. 100. 

24 Pulsford, E.: Cominerce and the Empire, 1914 and After, p. 149. 
^ Ibid. 

as Jebb, R.: Op. cit., Vol. U, p. 64. 

£' Transvaal, Report of the Customs and Industries Commission, Pretoria, 1908, p. 8. 

185766°— 22 48 



748 COLONIAL TARIFF POLICIES. 

This statement indicates clearly enough the attitude of the Trans- 
vaal toward British preference. The Transvaal, in general, favored 
low duties, and the preference was welcomed, not so much, or per- 
haps not at ail, as a favor to other parts of the Empire, but rather 
as in effect a reduction of the South African customs tariff. 

The customs union also appointed a commission in this year to 
consider the tariff situation, and its report likewise made reference 
to British preference. In the opinion of the customs union com- 
mission the preference was ineffective. The commissioners found 
general opinion to be in favor of an increase of the preference from 
3 per cent ad valorem to 5 per cent ad valorem. They suggested, 
however, that preference should be more scientifically allotted to 
the various commodities, and as a tariff revision board would be 
necessary to make the essential study upon which such revision 
should be based, they recommended that no all-round increase be 
made at that time. ^'Whether the preference be increased or not," 
the report went on to say, '^the effect upon local industries will, of 
course, depend upon whether the duty, less the preference, is suffi- 
cient to afford protection, according to the requirements of each 
individual industry. "^^ 

In May, 1908, another customs conference was held in Pretoria, as 
a preliminary to poHtical union, and later in the same year it was 
continued in Cape Town, As a result of the conference certain 
minor amendments and additions were embodied in a protocol to 
the customs convention of 1906 and the Transvaal was persuaded 
to remain in the customs union. The representatives of the Cape 
and the Orange River Colony opposed the continuance of preferential 
treatment to Great Britain, but the influence of Gen. Botha, and 
the general reluctance to interfere with existing arrangements 
pending the consideration of the question of closer union, saved 
the preferential pro visions. ^^ 

The changes which were made affected the policy only to a slight 
degree. The preferences were canceled on saddles and on glucose; 
and cups, medals and trophies, and vegetable oils for manufacturing 
purposes, which were formerly free of duty from all sources, were 
made dutiable mth a preferential rebate of 3 per cent ad valorem. 
On several other items the rates of duty were changed, but the 
amount of preferential rebate was maintained unaltered. This v/as 
the last customs union conference. 

III. Developmexts in the Tariff Since 1910. 

FORMATION OF THE UNION OF SOUTH AFRICA, 1910. 

In 1909, a national convention was held to outline a plan for polit- 
ical union of the British South African colonies, and as a result of 
this convention on May 31, 1910, Cape Colony, Natal, the Transvaal, 
and the Orange Free State ^^ were united to form one Dominion, the 
Union of South Africa. The Imperial South Africa Act, 1909, which 
laid down the conditions of union, stipulated that there should be 

28 Natal, Report of the Customs Union Tariff Commission, Pietermaritzburg, 1908, pp. 41, 42. 

S9 British Empire Review, June, 1908, pp. 199,200; and Pulsford, E.: Commerce and the Empire, 1914 
and After, 1917, p. 150. 

30 Upon the formation of the Union the designation of the Orange Elver Colony was changed to tho 
Province of the Orange Free State. 



BRITISH SOUTH AFRICA. 749 

free trade throughout the Union, but that until the South Afriean 
Parhament provided otherwise the tariffs in force at the estabhshment 
of the Union should stand. The convention appears to have given 
little time to the discussion of tariff' matters. ''With trade generally 
the convention was little concerned. 'Trade will look after itself if 
you let it alone/ seemed to be the feeling of those members experi- 
enced in commercial matters, and trade at any rate needed no special 
protection in the constitution."^^ There was no discussion of British 
preference at the convention, and the only change in existing tariff 
arrangements which resulted from the establishment of political union 
was that subsequent commercial relations with Rhodesia and the 
native territories were determined by commercial agreements between 
the Union of South Africa and the governments of the colonies con- 
cerned. The territories of Basutoland and Swaziland and the Bechu- 
analand Protectorate remain by agreement in customs union with the 
Union of South Africa. The relations with Rhodesia are discussed 
elsewhere."^^ 

Prior to the meeting of the national convention to establish the 
political union of British South Africa in 1909, the Transvaal had 
completed negotiations for a 10 years' treaty with Portugal similar to 
the old arrangement. At the convention, Gen, Botha, on behalf of 
the Transvaal, insisted that the treaty was essential to the prosperity 
of the Transvaal and succeeded, although with difficulty, in securing 
the sanction of the representatives of the other colonies to the treaty, 
which became binding on the Union as a part of its constitution. 

A further subsidiary agreement between the Transvaal and Mozam- 
bique, providing for the division of the Transvaal traffic between the 
ports of Delagoa Bay, Natal, and Cape Colony in specified proportions, 
also received formal recognition from the national convention. This 
agreement has been the source of continuous bickering and contro- 
versy in South Africa, but it is closely bound up with difficult ques- 
tions of local and provincial politics, and is strongly supported by 
the Transvaal in spite of the protests by the Cape and Natal that 
it discriminates unfairly to the advantage of a foreign port and to 
the disadvantage of their own ports. Both the main agreement and 
the subsidiary agreement were to continue in effect until April 1, 1919, 
and thereafter subject to one year's notice of termination by either 
party, 

REVISION OF THE TARIFF, 1914-15. 

Until the establishment of the political union a change in the 
tariff required the consent of all the parties to the customs union, 
and because of the differing economic conditions in the several 
colonies this was difficult to obtain. After the Union was estab- 
lished tiie tariff could be revised by a simple act of the Union Parlia- 
ment. Agitation for a revision of the tariff with a view to securing 
greater tariff protection for domestic industries developed, especially 
in the Cape, soon after the promulgation of the Union. The Gov- 
ernment in 1912 appointed a "trade and industries commission" to 
investigate the tariff situation, and in its report the commission 
presented a draft proposal for a revision of the tariff providing in 

81 Walton, Sir E.H.: The Inner History of the National Convention of South Africa, 1912, pp. 261,263. 
ss See p. 755- 



750 COLONIAL TARIFF POLICIES. 

general for higher duties. The commission took no definite stand 
with regard to the poHcy of British preference, but such itemized 
changes as it recommended were all for abolition, and the report 
was generally interpreted as being adverse to preference. In the 
following year a bill was drawn embodying the increased customs 
duties recommended by the Commission, but it met determined 
opposition, especially from chambers of commerce representing the 
mercantile interests and from the Transvaal representatives, and 
it was tabled. In 1914 some minor changes were made in the tariff 
schedules, including both reduction and increase of rates. 

In 1915 a measure was introduced making a more extensive 
revision of duties and providing for higher rates. The most impor- 
tant change was the increase in the duties on articles not specially 
enumerated as subject to specified rates and not enumerated in the 
free list. In the customs convention of 1903 the rate of duty on 
articles in this class (tariff item No. 193 in the tariff law) had been 
10 per cent ad valorem and in 1906 it had been raised to 15 per cent 
ad valorem. The revision of 1915 increased the rate to 20 per cent 
ad valorem. As comparatively few articles are specifically men- 
tioned — there are only 193 items in the tariff law, including 47 items 
on the free list — this change in the rate was equivalent to a round 
increase of the tariff duties on a very wide range of commodities. 

No substantial change was made in the provision for preference. 
In the case of goods liable to ad valorem rates the preferential 
rebate continued at 3 per cent ad valorem; the amount varied in 
the case of articles subject to specific duties, but the average of 3 
per cent ad valorem fairly represents the general amount of prefer- 
ence granted on dutiable goods imported from Great Britain and 
subject to preferential rebate. 

TARIFF LEGISLATIOX, 1915-1920. 

Since the extensive revision of the whole schedule of 1915, when 
the general rate for all unenumerated articles was raised from 15 
to 20 per cent, only minor changes have been made in the annual 
reenactments of the tariff law. In 1918 the Government committed 
itself to the policy of protection to domestic industries, especially 
to those which were developed under pressure of the war emergency. 
The announcement of the Government's plans was followed, how- 
ever, by critical comments from those who were opposed to any 
upward revision of the existing tariff, and no important tariff 
changes have been made. In fact in the tariff act of 1920 (No 44), 
the most noteworthy changes are the decrease in the ^^war'^ duty of 
20 per cent on cloth and on cotton and woolen piece goods to the 
15 per cent prewar duty of 1914, and the decrease on blankets, 
quilts, and clothing made of blanketing or baize from 25 to 20 per 
cent. Boots and shoes, and the whole class of unenumerated 
articles, remain dutiable at 20 per cent ad valorem, thus maintaining 
the war-time level. In 1921 the only important increases of duty are 
on beer, spirits, and tobacco ; and the only important protective meas- 
ure is the prohibition in May, 1921, of the importation of such leather 
footwear as competes with products of South African factories. ^^ 

»3 Cf. editorials in the Cape Argus, Cape Town, Nov. 29, 1918, and the Cape Times, Cape Town, Nov. 30, 
1918. 



BEITISH SOUTH AFRICA. 751 

PRESENT POSITION OF PREFERENTIAL POLICY IN SOUTH AFRICA. 

The intensified agitation for intra-imperial preference which was 
carried on in Great Britain during the war, and which finally cul- 
minated in the enactment by the British Parliament, in June, 1919, 
of tariff preferences on colonial products, met with little response in 
South Africa. The resolution of the imperial war conference in 1917 
in favor of intra-imperial tariff and other commercial preferences 
was opposed by many persons, and there were indications that South 
Africa aligned herself with Premier Borden of Canada in his dissocia- 
tion therefrom. Persons of British origin are in a minority in the 
European population of South Africa, and a campaign for extension 
of the preferential policy would excite the opposition of the Nation- 
alist Part}^. This party, composed almost entirely of persons of 
Dutch descent but not by any means including all such persons, has 
opposed the existing British preference and has even advocated the 
entire separation of South Africa from the British Empire; and so 
much the more would an extension of the British preference excite 
their opposition. Even those who otherwise would favor British 
preference are disinclined, therefore, to bring the matter to the fore. 
At the same time it is to be noted that the Association of Chambers of 
Commerce of South Africa at their annual meeting in August, 1919, 
unanimously passed a resolution urging that the preferential rate to 
the United Kingdom be increased to a minimum of 5 per cent.^'^ 

PREFERENCES TO BRITISH TRADE IN ADDITION TO TARIFF REBATES. 

The Customs Management Act of 1913 superseded the numerous 
lavvs previously in force in the various Provinces. It introduced two 
features novel to South Africa but modeled on existing Canadian 
legislation. These are, first, a provision that ad valorem duties on 
imports should be based on the fair market value for home consump- 
tion in the exporting country instead of on the invoice value, and 
second, a provision for extra duties on imports invoiced to the South 
African importer at less than their fair market value for home con- 
sumption in the exporting country. Although both of these provi- 
sions vfere intended primarily to safeguard domestic industries 
against dumping, it was expected that they would also operate in- 
cidentally as an advantage to the commerce of free trade countries, 
and especially of Great Britain. The president of the Association 
of Chambers of Commerce of South Africa in his opening address at 
the Congress held in September, 1913, at Kimberley, voiced this 
expectation, in referring to the ''fair value for home consumption 
clause"": '^It will divert trade,'' he stated, ''from protectionist 
countries, where only [i. e. alone] considerable differences between 
export and home consumption prices can exist, to countries having 
low tariffs or none, such as Great Britain, Holland, and Belgium.^^ 

There have been some striking instances in British South Africa 
of the grant of preference to British trade at material cost to them- 
selves by colonial and municipal official purchasing agencies. Cape 

8< Association of Chambers of Commerce of South Africa, Proceedings of the 22(i Annual Congress, Johan- 
nesburg, 1919, p. 12. 

85 For a discussion of the similar provisions in Canadian customs legislation see Chapter on Preferential 
Tarifis In Canada, p. 719. 



752 coLoiv^iAL TAEirr policies. 

Colony in 1907, for example, deliberately paid a premium of $625,000 
to enable British manufacturers to secure an order for $7,500,000 
of railway rolling stock, which but for this action would have gone 
to a foreign country. Mr. T. W. Smartt, then commissioner of 
public works of Cape Colony, at the colonial conference of 1907 at 
London, stated that the agent general of the Colony had instruc- 
tions to allow British manufacturers an advantage in their bids of 
10 per cent in respect to tenders for railway materiaL^^ 

The Durban (Natal) municipal corporation in April, 1917^ author- 
ized the municipal storekeeper to give preference up to 10 per cent 
to goods produced and manufactured in the United Kingdom as 
against goods which might be procurable from the United States. 
On the initiative of this corporation many Natal municipalities 
and local boards made returns to the Durban body of those goods 
which in the past they had been accustomed to purchase from foreign 
countries. Wide publicity was given to these returns for the benefit 
of British manufacturers. ''In any event," states the British and 
South African Export Gazette for March, 1917 (British), ''manu- 
facturers are assured after the war of the substantial preference 
indicated above, which should place them in an exceedingly favorable 
position with competing countries." ^^ 

IV. Other Trade Arrangements of British Colonies in South 

Africa. 

* preference extended to CANADA, 1904. 

Article IV of the customs convention of 1903, under which prefer- 
ence to Great Britain was granted, provided that the preference 
could be extended to any British colony, protectorate, or possession 
granting ''equivalent reciprocal privileges" to the colonies included 
in the South African Customs Union. 

In 1904 Canada applied for admission of her goods at the prefer- 
ential rates accorded to similar products from the United Kingdom 
and offered in exchange to extend the benefits of the Canadian 
preference to British South African products. As there were few 
commodities of South African origin for which there was an impor- 
tant market in Canada, South Africa did not consent to grant recipro- 
cal preference until Canada agreed to admit South African wines 
below 26 per cent alcoholic content at the special rates accorded 
to French wines of such strength in the Franco-Canadian conven- 
tion of 1894 and in addition to grant the same concession, namety, 
the remission of the 30 per cent ad valorem surtax above the specific 
duties, to South African wines of over 26 per cent alcoholic content. 
The arrangement came into effect in both countries on July 1, 1904, 

extension of PREFERENCE TO AUSTRALIA, 1906. 

The imports of South Africa from Australia were in 1906 sub- 
stantial in amount. The main items were butter, wheat, flour, 
leather, frozen and canned meat. Most of these were items subject 

86 Gt. Brit., Pari. Papers, 1907. Cd., 3523, p. 348. 

*^ British and South African Export Gazette, March, 1917; cf., also Cape Town Chamber of Commerce 
Journal, April, 1917, p. 21. 



BRITISH SOUTH AFRICA. 753 

to specific duties in the South African tariff, and to them the con- 
vention of 1903 did not extend preference. But the customs con- 
vention of 1906 did extend it to articles subject to specific duties, 
including* most of the articles important in Australia's exports to 
South Africa, and this made the South African offer of the pref- 
erential rebates attractive to Australia. At this time Australia 
had not enacted any preferential legislation. But as a result of 
negotiations initiated by Australia an agreement was reached with 
the customs union, whereby Australia received the privilege of pref- 
erential treatm.ent of her products upon importation into South 
Africa in exchange for the grant to South African products, including 
timber, fruits, feathers, maize, spirits, wines, sugar, and tobacco, 
of substantially lower rates of duty than those imposed by the 
Australian tariff' on similar importations from any other source. 
The agreement came into effect in both countries on October 1, 
1906. 

The South African exports to Australia were few and unimportant 
both before and after the conclusion of the agreement, which was 
criticized in South Africa as being unduly favorable to Australia. 
In the Transvaal, however, the extension of the preference to Aus- 
tralian foodstuffs was received with approval, as a result of the hope 
that it would mitigate the effects of the import duties on wheat and 
flour inserted in the customs convention in order to safeguard the 
Transvaal market for the Cape farmers. 

EXTENSION OF PREFERENCE TO NEW ZEALAND, 1906. 

In 1906 South Africa and New Zealand negotiated an agreement 
whereby New Zealand granted South Africa special rates not ex- 
tended to any other country on a number of its principal products 
m return for the extension of the South African preferential rates to 
imports from New Zealand. The arrangement stipulated that 
certain of the principal export products of South Africa should 
pay, upon their importation into New Zealand, specified rates 
lower than those in the New Zealand preferential tariff; and that 
all other South African products should pay rates lower by 25 per 
cent than those specified in the New Zealand preferential tariff. 
In 1909 this rebate on products not specially enumerated in the 
treaty was by mutual agreement changed from 25 per cent of the 
New Zealand preferential duty to 3 per cent ad valorem. In most 
instances this modification reduced the amount of preference en- 
joyed by South African products. 

The amount of trade affected by the agreement was very small. 
The exports from South Africa to New Zealand in the years pre- 
ceding the war never reached £10,000. The imports into South 
Africa from New Zealand were of greater importance, and in ordi- 
nary years generally exceeded £40,000. 

The South African preference has been extended to no British 
colony or possession other than the three Dominions enumerated 
above.^^ In each case South Africa would not consent to the exten- 
sion of her preference until she had received special concessions not 
already provided for in the preferential legislation of the other 

88 For a qualification of this statement with regard to Rhodesia, see p. 757. 



754 COLOiS^IAL TARIFF POLICIES. 

Dominions. With respect to both New Zealand and Austraha the 
special concessions granted were retained as exclusive concessions to 
South African products, and in the case of Australia, South Africa 
was the first part of the British Empire to receive preferential treat- 
ment. The only special concession granted by Canada was ex- 
tended, however, to the other British countries entitled to preferen- 
tial treatment in Canada. 

The success of South Africa in securing special concessions is the 
outstanding feature of these agreements. It is to be attributed 
mainly to two factors — the smallness both actual and potential of 
the South African exports to the other British self-governing Do- 
minions, and the fact that both in Canada and in New Zealand the 
existing preferential schedules offered no concessions on products 
which South Africa exported in significant amount. Australia at 
the moment of her entrance into reciprocal tariff relations with 
South Africa had not yet incorporated preference in her tariff legis- 
lation. Her concessions to South Africa were therefore newly 
established and as a matter of general policy were withheld from all 
other British countries. 

RECIPROCAL TRADE ARRANGEMENTS MADE BY THE TRANSVAAL AND 
SWAZILAND WITH MOZAMBIQUE. 

The Transvaal in 1875 entered into a treaty with Portugal, acting 
on behalf of the Portuguese colony of Mozambique, whereby recip- 
rocal free trade, with some minor exceptions, was established between 
the two countries and whereby the Transvaal was authorized to re- 
cruit native labor in Portuguese territory in return for an agreement 
to route a large portion of her external trade through the Portuguese 
port of Delagoa Bay. ^'The agreement had always excited violent 
opposition in South Africa, for it was felt that the Transvaal trade 
was being improperly diverted from the ports which had hitherto 
served it.^'^^ Nevertheless when the British secured control of the 
Transvaal, it was found that native labor from Mozambique was 
essential to the Transvaal mining industry, and Lord Milner, the 
administrator of the Transvaal, on June 18, 1901, reluctantly entered 
into a modus vivendi with Portugal, reviving the agreement tempo- 
rarily.^^ In 1904 and 1908 the agreement was modified in some 
details. In the latter year Swaziland was made a party to the 
reciprocal free-trade arrangement.*^ 

V. Preferences in Rhodesia and South- West Africa. 

Prior to the establishment of the political union in 1910 the South 
African Customs Union included all the territories in British South 
Africa, except Northeastern Rhodesia. ^^ The customs union was 
terminated on June 30, 1910, but it was arranged under various 
agreements that the customs union tariff provided for in the con- 
vention of 1906, as amended in 1908,'^-^ should, until altered by legis- 
lation enacted by the Union Government or by the administrations 

S9 Walton, Sir E. H.: The Inner History of the National Convention of South Africa, 1912, p. 257. 

« See chapter on the Colonial Tariff Policy of Portugal, p. 487. 

" Board of Trade Journal, Dec. 31, 190S, p. 465. 

« Northeastern Rhodesia lies in the "Conventional Basin of the Congo." 

«8 See p. 748. 



BRITISH SOUTH AFRICA. 755 

of the various South African territories, continue in force through 
these territories. Basutoland, the Bechuanaland Protectorate, and 
Swaziland have remained in customs union with the Union of vSouth 
Africa, the British preference having effect in these territories in hke 
manner as in the Union of South Africa. These territories are peopled 
mainly by native Africans. It is to be noted that, although they are 
colonies under the direct government of officials appointed by 
imperial authorities, the preference nevertheless receives the official 
sanction of the British Government. 

PREFERENTIAL TARIFFS IN RHODESIA. 

The territories now knov/n as the Khodesias were secured to British 
sovereignty, through the efforts of Cecil Rhodes, by treaties with 
native chiefs. In 1889 Rhodes obtained charters from the British 
Government, on behalf of the British vSouth Africa Co., of which he 
was president, intrusting the company with the administration of 
the territories and granting it all railroad and mining concessions. 
The term '^Rhodesia" originally covered the region in Central Africa 
immediately south of the Zambezi River, now known as Southern 
Rhodesia, and two territories north of the Zambezi, known as North- 
western Rhodesia (Barotseland) and Northeastern Rhodesia. In 
1911, by an imperial order in council, Northeastern and North- 
western Rhodesia were united to form one territory, Northern 
Rhodesia. In Northern Rhodesia the population is almost wholly 
native African, but in Southern Rhodesia there are European settlers 
in some number. ^^ 

CECIL RHODES AND BRITISH PREFERENCE IN RHODESIA. 

Cecil Rhodes was an ardent Imperialist, and strongly supported 
intra-imperial preference as a means of bringing the various portions 
of the Empire into closer union. In 1894, when a revision of the 
order in council under which the British South Africa Co. exercised 
jurisdiction in Rhodesia was under consideration, the imperial au- 
thorities suggested that there be inserted in the order in council a 
clause to the effect that the duty on imported goods should not exceed 
the Cape Colony tariff then in effect. Cecil Rhodes dem.anded that 
the restriction be placed only on the duties to be imposed on British 
imports. The Marquess of Ripon, then colonial secretary, rejected 
his proposal on the ground that it would be a violation of the prin- 
ciples governing the fiscal policy of the Empire. Rhodes, on January 
18, 1895, w^hile still prime minister of Cape Colony, protested vigor- 
ously against the action of the imperial authorities. In explanation 
of his desire that the words ''imported goods" should be replaced by 
''British goods" in the clause limiting the maximum duties to be 
imposed in Rhodesia, he stated that the clause in the form proposed 
by the imperial authorities would be an obstacle to the policy of 
imperial preference if England should decide to adopt it any time in 
the future.*^ It would also render it difficult for Rhodesia to secure 
entrance to a South African federation, such as Rhodes was contem- 

44 Estimated at 38,000 in 1919 out of a total population of about 810,000. Statesman's Year-Book, 1921, 
p. 204. 
« Iwan-Miiller, E. B.: Lord Milner and South Africa, 1902, p. 352. 



756 COLOIN-IAL TARIFF POLICIES. 

plating at the time/^ if Cape Colony or tlie federation should decide 
upon higher duties than those in force in Cape Colony in 1894. 

"clause 47." 

Orders in council of October 20, 1898, for Southern Rhodesia and 
November 28, 1899, for Northwestern Rhodesia (Barotseland), pro- 
vided for the administration of Rhodesia. At this time the Boer War 
was being fought, and ^^ unnoted in the turmoil and excitement of the 
war,"*^ clauses, drafted by Rhodes, were inserted in the orders in 
council, limiting the maximum duties to be imposed in these terri- 
tories upon goods of British origin. The clauses were identical in 
both orders in council. The clause in the Southern Rhodesia order in 
council, often referred to simply as '' Clause 47," was as follows: 

47. No customs duties levied on any articles produced or manufactured in 
any part of Her Majesty's Dominions or in any British protectorate and im- 
ported into Southern Rhodesia shall exceed in amount the duties levied on such 
articles according to the tariff in force in the South African Customs Union at 
the commencement of this order, or the tariff contained in the customs union 
convention concluded between the [Cape] Colony, the Orange Free State, and 
Natal, in May, 1898, whichever are the higher. 

Mr. Rhodes, on July 20, 1899, speaking of his success in obtaining 
imperial sanction for his wording of the clause, declared that " the 
politics of the next hundred years are going to be tariffs and nothing 
else," and added, ^^ Great Britain will have a perpetual market for her 
goods until the constitution of Rhodesia is changed, and you must 
remember there is one thing which human beings never change, and 
that is the sacred constitution on which their country is founded. 
* * * I feel sure that when federation in South Africa is arrived at, 
this idea of an upper limit for British goods will remain in the consti- 
tution of the federated States, and will be their return to the mother 
country for the blood and treasure she has spent in their behalf." ^^ 

The customs convention of 1896 was in effect in Cape Colony on 
the date of commencement of the Southern Rhodesia order in council 
of 1898.^^ Rhodesia charged no import duties until 1899, but in that 
year both Southern and Northwestern Rhodesia adopted the Cape 
Colony tariff then in force. This was the customs convention of 1898, 
the rates of which on all imports were lower than those in effect under 
the convention of 1896. The maximum rates which could be im- 
posed on British imports into Rhodesia were therefore those specified 
in the customs convention of 1896, and as the rates actually in force 
were not as high, there was no occasion during the continuance of the 
convention of 1898 for the invocation of Clause 47. 

In 1903 Southern and Northwestern Rhodesia joined the South 
African Customs Union, and undertook to apply the new tariff drawn 
up at the customs conference of 1903. This tariff provided for prefer- 
ence to products imported from the United Kingdom into any portion 
of the Customs Union. The new tariff provided in general for lower 
rates than those previously in effect, and during the continuance of 
this tariff there was again no occasion for the application to imports 
of British goods of the limitation of duties stipulated in Clause 47. 

« Hensman, H.: History of Rhodesia, 1900, pp. 120, 121. 

« Twan-Miiller: Op. cit., p. 352. 

«3 Evans, Samuel: Op. cit., p. 95. 

« The convention of 1S98 did not come into eflect until Jan. 1, 1899. 



BEITISH SOUTH AFRICA. 757 

ADDITIONAL PREFERENCE IN RHODESIA IN 1906. , 

In 1906 a new customs convention raised the rates of the customs 
union tariff sufficiently to make them higher on many items than the 
Cape tariff of 1896. The new convention continued the preference 
to imports from the United Kingdom and also to Canadian goods, 
but even the preferential rates were higher in many instances than 
the maximum rates permissible in Rhodesia, under Clause 47, on 
imports of British goods. Moreover Clause 47 limited the rates 
which could be imposed on goods coming not only from the United 
Kingdom or from reciprocating colonies, but from any portion of the 
British Empire. Customs ordinances were, therefore, issued granting 
rebates to all articles imported from British sources which came 
under the provisions of Clause 47. These rebates were made equal 
to the amount necessary to bring the rates on goods of the British 
Empire imported into Southern or Northwestern Rhodesia down 
to the level of the rates in the Cape tariff of 1896.'^^ 

Under later customs agreements, namely, in 1910 and in 1914, 
between Rhodesia and the Union of South Africa, the provision for 
additional rebates to British goods imported into Rhodesia was con- 
tinued.^^ As the rates of the customs union tariff were increased at 
each revision, the amount of additional rebate necessary to bring the 
Rhodesian tariff' into harmony with Clause 47 likewise increased. 

In 1914, in order to protect the revenue productivity of the tariff, 
Clause 47 of the ordinance of 1898 was amended to exempt certain 
liquor and tobacco products from the limitation of duties stipulated 
in the original clause. In the customs agreement of January 1, 1915, 
with the Union of South Africa, it was stipulated that the Union 
should pay each year £58,000 ^^ to Southern Rhodesia and £5,000 to 
Northern Rhodesia, from the duties collected in South Africa on raw 
materials imported into the Union, manufactured, and then exported 
to Rhodesia, and on articles imported into South Africa from over- 
seas and subsequently reexported from open stock to Rhodesia. 
Permission was also granted to Rhodesia to make suspensions of duty, 
within specified limits, on a list of specified articles. ^^ 

PREFERENTIAL PROVISIONS OF THE RHODESIAN TARIFFS. 

Southern and Northwestern Rhodesia have identical tariffs. The 
tariff in force is that of the Union of South Africa, except for the 
modifications necessary to bring it into harmony with Clause 47, or 
resulting from the authorized suspensions of duty. The South African 
Customs Union has a tariff of two schedules, but Clause 47 necessi- 
tates in Rhodesia a tariff of three schedules. Schedule A is appli- 
cable to foreign goods and consists of the general rates of the South 
African Customs Union as modified by any suspensions of duty which 
may be in force in Rhodesia. Schedule C is applicable to products of 
any nonreciprocating British possessions and contains the same rates 
as Schedule A, except as lower rates may be in force by virtue of 
Clause 47. Schedule B is applicable to products of Great Britain and 

5° For Northeastern Rhodesia, see p. 759. 

51 By protocols to the agreement the amount payable has been increased, in the case of Southern Rhodesia, 
to £100,000, and in the case of Northern Rhodesia, to £10,000. The protocols also provide for increases in 
the duties that may be charged on imports into Rhodesia of spirits distilled in the Union of South Africa. 

62 British South Africa Co, Government Gazette, 1915, Government Notice No. 12. 



758 



COLONIAL TARIFF POLICIES. 



of reciprocating colonies '^^ and contains the preferential rates of the 
South African Customs Union, except as lower rates may be in force 
by virtue of clause 47.^* In no case is a preference granted to im- 
ports from any nonreciprocating colonies unless necessary to comply 
with Clause 47, and it follows from the applicability of that clause to 
the whole Empire that the rates of Schedule C can never be lower 
than those of Schedule B. In many cases, on the other hand, prod- 
ucts imported from the United Kingdom or a reciprocating British 
colony enjoy a preference which is not extended even in part to 
imports from the rest of the Empire. 

Table 2. — Sample rates taken from the present tariff as illustrations of the manner in 

which Clause 47 operates} 



Tariff item. 


Schedule A (foreign 
goods). 


Schedule B (goods 
of United King- 
dom or of recipro- 
cating colonies). 


Schedule C (goods 
of nonreciprocating 
colonies). 


No. 


Article. 


4 


Beads, per pound 


ejd. or 25 per cent, 
whichever is 
greater. 

25 per cent ad valo- 
rem. 

is. 3d. 


3d 


3d. 


63 3 


Catalogues and advertising 

material. 
-Cement for building purposes, 

per 400 pounds. 
Bicycles, tricycles, and parts.. 


Free 


Free. 


10 


Is. . 


is. 3d. 


54(e) 


20 per cent ad valo- 
rem.3 


12i per cent ad valo- 
rem. ^ 


12.^ per cent ad valo- 
rem. 



1 British South Africa Co., Southern Rhodesia, Customs and Excise Handbooks, 1915, Pt. II, pp. 15, 
et seq . It should be remembered that in addition to these rates imports from other portions of the South 
African Customs Union, with some minor exceptions, enter free of duty. 

» Part. 

» Ordinance No. 6, 1916, of July 31, 1916, to amend- ordinance of 1915. 

CLAUSE 47 RESULTS IN SUBSTANTIAL INCREASE OF PREFERENCE. 



In those cases in which since 1896 there have been substantial 
increases in the customs union tariffs. Clause 47 results in a sub- 
stantial increase in the British preference. The principal instances 
of items in which the rate on British imports is considerably reduced 
because of Clause 47 are presented in the following table. The 
difference between the South African and the Rhodesian preferential 
rates measures the increase in preference resulting from Clause 47. 
In addition, it should be noted, the Rhodesian preferences cited in 
the table apply alike to all portions of the British Empire, whereas 
the South African preference is granted only to the United Kingdom 
and to reciprocating colonies. 

(-3 At present Canada, Australia, and New Zealand. 
''* And except for suspensions of duty in Rhodesia. 



BRITISH SOUTH AFRICA. 



759 



Table 3. — Rat(^s under Rhodesian preference (Clause 

South African preference. 



7) compared with those under 



Tariff 
item. 



Article. 



62 

53 

55(a) 

65(b) 

56 

57 

58(b) 

59(a) 

69(b) 

60 

63 

64 

65 

66 

67 

71 

Class VI 



Beads, per pound 

Boots and shoes 

Printed matter, not including ruled paper 

Fruit juices, cordials, and sirups, not elsewhere enumerated.. 

All other kinds not exceeding 3 per cent of proof spirit 

Moving-picture machines, phonographs, records, etc 

Biscuits, cakes, puddings , and pastry 

Padded quilts 

Fire bricks c , , . . 

Other bricks, except bath 

Clothing, bespoke 

Glycerine, distilled, not in bulk 

Gold and silver plate and gold and silver plated ware 

Harness and saddlery 

Jewelry (entire schedule), including watches, watchcases, etc., 
precious stones, etc 

Leather maniiiactures: Leggings, bags, trunks, portman- 
teaux, holdalls, belts, and gun cases 

Tobacconist's wares, including pipes, pouches, trays, jars, 
lighters, etc 

All goods nor elsewhere charged with duty and not enumerated 
in the free list ." 



On 

foreign 

goods, 

both 

countries. 



On British goods. 



South 
Africa. 



6id. 
Per cent 
ad valo- 
rem. 
20 
25 
25 
25 
25 
25 
20 
25 
25 
15 
25 
25 
25 

25 

25 

25 
20 



6d. 
Per cent 
ad valo- 
rem. 
17 
22 
22 
22 
22 
22 
17 
22 
22 
12 
22 
22 
22 

22 

22 
22 

17 



Rhodesia. 



3d. 
Per cent 
ad valo- 
rem . 



Free. 
9 



' Free to 9 per cent ad valorem. 

The usual preference in the Union tariff is oni}^ 3 per cent ad 
valorem. In the Cape ta^riff of 1896 few of the rates exceeded 9 per 
cent acl valorem and this was the rate for the important class of duti- 
able articles not separately enumerated. In the present Union tariff 
there are many rates as high as 25 per cent ad valorem and the rate 
on articles dutiable but not separately enumerated is 20 per cent ad 
valorem. The limitation by Clause 47 of the duties which may be 
imposed on products of the Empire imported into Rhodesia to the 
rates of the tariff' of 1896 thus brings about a substantial increase in 
the Rhodesian preference. The Rhodesian preference, taken as a 
whole, appears to be the greatest preference granted to British trade 
anywhere in the Empire. 



NORTHEASTERN RHODESIA INCLUDED IN THE 

OF THE CONGO." 



CONVENTIONAL BASIN 



Until 1911, Northwestern Rhodesia (Barotsela.nd) and North- 
eastern Rhodesia were separately governed. Northeastern Rhodesia 
was not a member of the South African Customs Union, it had no 
provisions for British preference in ihQ imperial orders in council 
providing for its administration, and it did not discriminate in its 
tariff between British and foreign goods. Great Britain is bound by 
the general act of the Conference of Berlin of February 26, 1885, to 
maintain the open door in Northeastern Rhodesia perpetually or 
until the general act of that conference is revised or abrogated by 
general consent of the powers adhering to it.'^^ 



For the proposed revision of this treaty, maintaining the open door, see p. 120. 



760 COLC•^^IAL TASIFF POLICIES. 

By an order in council of May 4, 1911, the two territories of North- 
eastern and Northwestern Rhodesia were amalgamated under the 
title of Northern Rhodesia. Northwestern Rhodesia remained as 
before in customs union with the Union of South Africa, but North- 
eastern Rhodesia, in accordance with the Conference of Berlin of 1885, 
remained outside the customs union and granted equal treatment to 
imports from all sources. 

The present tariff in force for imports into Northeastern Rhodesia, 
known for tariff purposes as the Congo Basin of Rhodesia, is for the 
most part the same as the tariff in force in Southern Rhodesia on prod- 
ucts of the United Kingdom and reciprocating colonies. In some in- 
stances, however, the rates in force in Northeastern Rhodesia are 
lower than those leviable on similar goods under the lowest schedule 
of the Southern Rhodesia tariff. This is in accordance with the 
Berlin Conference of 1885 as amended in 1890 and 1910, which limits 
to a maximum of 10 per cent ad valorem all import duties, except 
those on alcoholic liquors, gunpowder, guns, and pistols. The Congo 
Basin of North Rhodesia is the only part of British South Africa in 
which no British preference is in effect. 

WALVIS BAY. 

On the Atlantic coast of Africa and encircled by the territory of 
the South-West Africa Protectorate lies the British possession of 
Walvis or Walfish Bay, administratively a part of Cape Colony. 
Until 1921 this territory was administered as a free port,'^^ but the 
Customs and Excise Duties Amendment Act, 1921 (No. 35 of 1921),'^' 
provided that, for customs purposes, Walvis B&j should be deemed 
to be a part of the mandated territory of South-West Africa, to 
which the tariff laws of the Union of South Africa apply. The 
same customs duties are therefore charged on imports into Walvis 
Bay as on imports into the Union of South Africa. 

'^THE SOUTH-WEST AFRICA PROTECTORATE" (MANDATED TERRITORY). 

The South-West Africa Protectorate, formerly German Southwest 
Africa, has been assimilated for customs purposes to the Union of 
South Africa. It is discussed in the appendix to the chapter on 
'^ Colonial Tariff Policy of Germany," page 265. 

YI. Summary. 

Before the triumph in Great Britain of free trade, Cape Colony, 
the only British colony at that time in South Africa, received pref- 
erence in the markets of the mother country and was required to 
grant in return preferential treatment to British imports. These 
preferences disappeared by 1855. 

^^ The Union Tariff Act of 1914 (No. 26 of 1914), under which Walvis Bay had been continued as a free 
port, provided as follows: 

10. (1) Notwithstanding anything contained in this act or any other law, the customs duties prescribed 
by law in respect of the importation of goods into the Union shall not be payable in respect of goods im- 
ported into or through the port or settlement of Wah'is Bay. 

(2) The port or settlement of Walvis Bay shall be deemed to be a foreign port in respect of the importation 
therefrom or exportation thereto of all goods which are not grown, produced, or manu,factured in the Union. 

" Sec. 27 (3). The act was published in the Union Gazette Extraordinary, July 7, 1921. 



BEITISH SOUTH AFRICA. 761 

In 1889 a customs union was formed between Cape Colony and the 
Orange Free State, by v/liich trade in South African products between 
the two countries became free and a uniform tariff was established 
on imports from outside the Union. The Orange Free State received 
on its own imports from overseas 75 per cent of the duties collected 
in the Cape. This was the first instance after the adoption by Great 
Britain of the policy of free trade of the sanction by the imperial 
authorities of a differentiation hj a British colony in its tariff in 
favor of a foreign country as against all other countries, British and 
foreign. ^^ 

In 1903, after unsuccessful attempts in 1896 and 1898, the British 
colonies in South Africa formed the South African Customs Union. 
The Union provided for free trade among the colonies, for a common 
tariff on foreign imports, and for preference to imports from Great 
Britain and from reciprocating British colonies. The preference 
amounted to 25 per cent of the general duties on articles subject to 
ad valorem duties, unless the duties specified were 2^ per cent ad 
valorem, when the entire duty was remitted on British goods. No 
preference was granted on articles subject to specific duties or 
included in the free list. 

This preferential tariff, applicable to the Crown colonies included 
in the South African Customs Union, marked the first Instance, since 
the abolition in 1855 of the old colonial preferences to British prod- 
ucts, of the sanction by the imperial authorities of the grant by 
Crown colonies of tariff preference to British trade. It was a dis- 
tinct and important departure by Great Britain from the policy 
otherwise uniformly followed since her adoption of free trade, not to 
permit British possessions under direct imperial control to differen- 
tiate in their tariff' treatment between British and foreign products. 

In 1906 the rates of the customs union tariff' were considerably 
increased and preference to British products was extended to many 
articles subject to specific duties. On items subject to ad valorem 
duties the preference was made uniform at 3 per cent ad valorem 
(including items subject to the general duty of 3 per cent ad valorem, 
which thus became free under the preferential schedule). A few 
changes of minor importance were made in the tariff rates in 1908. 

In 1910 the Union of South Africa was formed. The constitu- 
tional convention, hov/ever, gave little attention to tariff matters, 
and the act of the British Parliament creating the Union provided 
that until the South African Parliament determined otherwise, the 
tariffs in effect when the Union was established should continue in 
force. 

In 1914 minor changes were made in the tariff, and in 1915 there 
was a more extensive revision with higher rates generally. The 
most important change increased to 20 per cent the duty on the 
numerous and important articles not specially mentioned in the 
tariff schedule or in the free list. The rate on these items had been 
10 per cent under the tariff of 1903 and 15 per cent under the tariff 
of 1906. No substantial change was made in the preference. In 
1920 several minor reductions in duties were made, but the duties 

"8 See pp. G61 and 735. 



762 COLONIAL TARIFF POLICIES. 

now in force are substantially the same as those established during 
the war. 

Rhodesia, except Northeastern Rhodesia, which for tariff purposes 
IS included in the '"Conventional Basin of the Congo," not only 
grants preference to Great Britain and reciprocating Dominions as a 
part of the South African Customs Union, but extends in addition 
preferences upon certain products of any part of the Empire. 
Clauses of the orders in council providing for the administration of 
Rhodesia, which were drafted by Cecil Rhodes, founder of the colony, 
establish the rule that ''no customs duties levied on any articles 
produced or manufactured in any part of Her Majesty's Dominions 
or in any British protectorate and imported into Rhodesia shall 
exceed in amount the duties levied on such articles according to 
the tariff in force in the South African Customs Union at the com- 
mencement of this order, * * *." 

Taken as a whole, the Rhodesian preference appears to be the 
greatest preference granted to British trade anywhere in the Empire. 
But the preference granted to British products by the South African 
Customs Union (outside of Rhodesia) is considerably less than those 
of the other Dominions. This is due partly to the fact that the base 
rates are lower than for the other Dominions, but more largely to the 
opposition of the Dutch, chiefly, who strongly opposed the estab- 
lishment of preference to British products and who have opposed any 
extension of the preference. Numerous attempts have been made 
since 1903 to reduce or abolish the preference, but doubtless this 
would involve a disruption of the customs union, a consequence not 
desired by any part of South Africa. 

Besides the Rhodesian preference which was granted gratis to all 
other parts of the Empire, reciprocal trade arrangements were entered 
into by the South African Customs Union w^ith Canada, in 1904, 
and with Australia and New Zealand in 1906. In each case South 
Africa extended her preferential tariff in return for special conces- 
sions by the other Dominion. Canada granted her preferential tariff 
and a further differential upon wines. The agreement with Australia, 
which had not yet adopted a preferential schedule, secured substan- 
tial reductions of duty upon a special list of South African products. 
New Zealand, where South African products already enjoyed the 
preferential tariff, conceded upon all South African products special 
rates lower than those of her preferential tariff. 

The Transvaal and Swaziland have trade arrangements with the 
Portuguese colony of Mozambique. The agreement between the 
Transvaal and Mozambique, first made in 1875, provides for free 
interchange of products of the two colonies and permits the importa- 
tion through Mozambique of goods destined for the Transvaal at 
customs rates much lower than those formerly charged by Natal and 
the Cape. In 1908 Swaziland was made a party to the reciprocal 
free trade arrangement. 

{BihliograpJiy on page 832.) 



Chapter XVI. 
PREFERENTIAL TARIFFS IN NEW ZEALAND. 



CONTENTS. 



Introduction 

I. Tariff history, 1840-1903: 

British preference in early tariffs 

Table 1.— Rates of the first tariff 
of New Zealand 

Nonpreferential tariffs, 1853-1903 

Early projects for intercolonial prefer- 
ence 

The movement for preference to 
British products 

Negotiations with South Australia 
and Canada, 1895 

II. Preference established, 1903: 

Mr. Seddonand the preference move- 
ment 

Enactment of preferentialtarifT, 1903. 

Provisions for reciprocal trade agree- 
ments in act of 1903 

III. Negotiations for reciprocal preference 

with other Dominions, 1906-7: 
Unsuccessful negotiations with Aus- 
tralia 

The New Zealand and South African 
customs duties reciprocity act, 
1906 



763 

763 

764 
764 

765 

765 

766 



766 
767 



769 



Page. 
III. Negotiations for reciprocal preference 
with other Dominions, 1906-7— 
(Continued). 
Table 2.— Comparison of rates of 
the tariff of 1907 with those of 
the treaty with South Africa. ... 770 
Unsuccessful negotiations with 

Canada 771 

IV. Developments in the tariff since 1907: 
Preference extended by tariff act of 

1907 771 

Changes in preferential schedule, 

■ 1915 772 

Preference extended by the finance 
act, 1917 773 



Tariff outlook in New Zealaind 

Other preferences to British imports. 
Regulations respecting depreciated 

currencies 

Dependencies of New Zealand: 

Cook Islands 

The Territory of Western Samoa 
(mandated territory) . 



773 

774 



775 _ 
775 



(77 



VI. Summary 777 



Introduction.^ 

New Zealand w^as discovered by Tasman in 1642, but until 1823 
European Governments did not dispute the authority of the Maori 
chiefs over the native and European inhabitants of the islands. 
But owing to ^'the lawlessness of the white settlers, the constant 
intertribal warfare, the shameless land grabbing, and an infamous 
trade in the curiously tattooed native heads, "^ the British Govern- 
ment, apparently with reluctance, w^as forced in 1823 to extend the 
sovereignty of the governors of New^ South Wales over all British 
subjects resident in New Zealand. France in like manner declared 
its sovereignty over French subjects in the islands. In response 
to the pleas of the missionaries and also because of fear that British 
inaction would be followed by French annexation of the islands, the 
imperial authorities in 1839 sent out Capt. Hobson to obtain the 
cession of the country from the native chiefs and to act as lieutenant 
governor. Early in 1840 Capt. Hobson succeeded in negotiating 
the treaty of Waitangi, by which complete sovereignty over New 
Zealand was transferred from the Maori chiefs to the British Crown. 

I. Tariff History, 1840-1903. 



BRITISH IMPERIAL PREFERENCE IN EARLY TARCFF. 

From the signing of the treaty of Waitangi in 1840 to May 31, 
1841, New Zealand was governed as a dependency of New South 
Wales, and customs duties were collected for revenue purposes 

1 This account is based in large part on the history of the tariff development of New Zealand given in 
the New Zealand Yearbook f.,r 1916,'pp. 329 et seq. 

2 Condliffe, J. B.: The external trade of New Zealand, in New Zealand Yearbook for 1915, p. 858. 

185766°— 22 49 763 



764 



COLONIAL TARIFF POLICIES. 



under the New South Wales customs ordinance. In 1841 New 
Zealand was made a separate British CroT\Ti colony, independent 
of New South Wales, and the first governor, Capt. Hobson, pro- 
claimed a new customs ordinance, New Zealand's first separate 
tariff. This tariff was intended solely for revenue purposes and 
contained only a few items. It is of interest because of the pro- 
visions it contained, in accordance wdth the colonial policy of Great 
Britain at that period, for preferences to British products. The 
rates were as f oUows : ^ 

Table 1. — Rates of the first tariff of New Zealand. 



Article. 



Produce 
of United 
Kingdom, 
of any 
British 
possession 
in Amer- 
ica, or of 
New South 
Wales, or 

of Van 
Diemen's 
Land (i.e., 
Tasmania j. 



Products 
of all other 
countries. 



Spirits or strong waters, per proof gallon 4s. 

Wine 15 per cent. 

Tobacco, unmanufactured, per pound i 9d. 

Tobacco, manufactured, except snufE, per pound Is. 

Cigars and snun, per pound 2s. 

Tea, sugar, flour, meal, wheat, rice, and other grain and pulse 5 per cent. 

On all other goods Free. 



os. 
15 per cent. 

9d. 

is. 

2s. 
5 per cent. 
10 per cent. 



In 1844 the duties were increased, and the preference to British 
products was abolished. In 1846 preference was again established 
by the imposition of duties of 12^ per cent ad valorem on all foreign 
unspecified goods and of only 10 per cent ad valorem on similar 
British goods, but this preference was soon repealed. The tariff 
of 1851, which contained a more elaborate scale of duties, made no 
provision for preference to British imports. In 1853 New Zealand 
was granted a parliamentary constitution and acquired practically 
complete control over her fiscal system. 

XONPREFEREXTL^L TARIFFS, 1853-1903. 

The New Zealand tariffs, during the Crown colony period, were 
revenue measures. In the period of autonomy subsequent to 1853 
there were many changes in the tariff. There were 15 different 
customs acts before 1895, and the five years 1878-1882 were each 
marked by revisions. On the whole, the tariff continued, throughout 
this period, to be mainly a revenue tariff, both in purpose and in effect, 
but most of the revisions consisted of increases in duties or of ex- 
tensions of duty to articles formerly admitted free. In the later 
years of this period the protective effects of the duties became more 
readily apparent and were acknowledged by successive administra- 
tions without apology. A comprehensive revision in 1895 increased 
the number of ad valorem duties and considerably enlarged the scope 



3 New Zealand Yearbook, 1916, p. 329. 



NEW ZEALAND. 765 

of various schedules so as to give specific enumeration to a number of 
nev/ items. The duties on a number of foodstuffs were reduced, but 
otherwise the revision was marked chiefly by increases. In 1900 
another tariff revision took place, marked by the same general 
tendencies of increases in duties, protection to domestic industries, 
and low or no duties on foodstuffs. Throughout this period, from 
1853 to 1903, there were no preferential provisions in the tariff legis- 
lation of New Zealand. 

EARLY PROJECTS FOR INTERCOLONIAL PREFERENCE. 

The Australian colonies were prohibited by the original constitution 
acts enacted for them by the Imperial Parliament from establishing 
differential duties of any kind. In 1870, hov/ever, the New Zealand 
Legislature passed the colonial reciprocity act, authorizing the Gov- 
ernment to make reciprocal agreements establishing mutual tariff 
concessions with the Australian colonies, including Tasmania, but 
royal assent was withheld and the act lapsed. 

In response to repeated protests from the Australian colonies the 
Imperial Parliament passed, in 1873, the Australian Colonies Duties 
Act, granting to the British colonies in Australasia the right to establish 
trade reciprocity between themselves, but continuing the prohibition 
against preferential duties on goods imported from other than Aus- 
tralasian countries, regardless of whether they were British or foreign 
countries. New Zealand was included by this act among the colonies 
to which the Australian colonies couLd, if they had chosen, have 
granted the tariff preferences. The establishment of reciprocal 
preferential arrangements with the British colonies with which New 
Zealand was most closely connected, both geographically and com- 
mercially, was thus made possible. The constitutional restriction 
against the grant of intercolonial preference by the Australasian 
colonies to any other British colonies was finally removed by im- 
perial statute in 1895,^ following upon the resolution of the colonial 
conference at Ottawa in 1894 urging such removal. 

THE MOVEMENT FOR PREFERENCE TO BRITISH PRODUCTS. 

The movement for imperial preference in New Zealand received its 
greatest stimulus from the colonial and imperial conferences. New 
Zealand took little part in the first colonial conference held in London 
in 1887, but at the colonial conference held at Ottawa in 1894 at the 
instance of Canada, the New Zealand representative gave his support 
to a resolution urging " that provision should be made by imperial 
legislation enabling the dependencies of the Empire to enter into 
agreements of commercial reciprocity, including the power of making 
differential tariffs with Great Britain or with one another." He did 
not, however, support another resolution which expressed the belief 
of the conference in the advisability of " Si customs arrangement 
between Great Britain and her colonies by which trade within the 
Empire may be placed on a more favorable footing than that which 
is carried on with foreign countries," and further, ^'that until the 

* 58 Victoria, Ch. 3. See p. 643. 



766 COLONIAL TAEIFF POLICIES. 

mother country can see her way to enter into a customs arrangement 
"with her colonies, it is desirable that when empowered to do so, the 
colonies take steps to place each other's products, in whole or in part, 
on a more favored customs basis than is accorded to the like products 
of foreign countries." The New Zealaxid delegate voted against the 
resolution as he lacked definite instructions from his Government on 
the policy of imperial preference. 

NEGOTEATIONS WITH SOUTH AUSTRALIA AND CANADA, 1895. 

In 1895, shortly after the return of the New Zealand delegate from 
Ottawa, the New Zealand legislature passed a customs duties reci- 
procity act, empowering the Government to negotiate reciprocal 
arrangements with the Australian colonies and ratifying an agreement 
already negotiated with South Australia, whereby, in return for the 
free admission into New Zealand of South Australian wine, olive oil, 
fruit, and salt, similar exemption from duty was to be granted by 
South Australia to New Zealand barley, hops, oats, and horses. The 
bill to bring this agreement into effect in New Zealand was thrown 
out in the House of Representatives on October 28, 1895, by an 
adverse majority of 2 votes. On October 30, a new bill was passed, 
however, by a big majority. But the South Australian legislature 
refused to pass a similar measure, and consequently the agreement 
did not come into effect.^ 

In the same year Canada concluded an agreement with New Zea- 
land, wherebj^, in return for Canadian concessions. New Zealand was 
to remit in whole or in part the duties on a number of products when 
imported from Canada. The New Zealand legislature refused, how- 
ever; to ratify this agreement. 

11. Preference Established, 1903. 

mr. seddon and the preference movement. 

The grant b}^ Canada in 1897 of a preference to British products, 
the colonial conference at London in 1897, and the wave of '^Empire" 
sentiment which swept the Empire during the Boer War and which 
was especially conspicuous in New Zealand were all factors helping 
to create in New Zealand a strong sentiment in favor of closer imperii 
relations. The chief spokesman for unit}^ was Richard John Seddon, 
for many years premier of New Zealand. To hiin the British of the 
'' old country" and the British of New Zealand were one and the same 
people, with the same interests and the same sympathies. He 
invariably spoke of British policies, British commerce, British prob- 
lems as ^^our'' policies, '^our" commerce, and ^^our" problems, and 
when he quoted commercial statistics, as he often did in his speeches, 
it was sometimes difficult to ascertain whether he was referring to 
the commerce of Great Britain or to that of New Zealand, so close 
in his thought was the union between the affairs of the mother coun- 
try and those of New Zealand. In the expression of these sentiments 
of the close unity of New Zealand and Great Britain and in his 

5 Pulsford, E.: Commerce and the Empire, 1914 and After, p. 144; Jebb, Richard: The Imperial Con- 
ference, Vol. I, p. 192. 



NEW ZEALAND. 767 

enthusiastic support of the projects of the British imperiahsts, Mr. 
Seddon probably represented accurately the feelings of the bulk of 
the population of New Zealand. New Zealand was generally con- 
sidered the most '^ British" of the colonies. 

Nevertheless Mr. Seddon did not disregard what he considered the 
interests of New Zealand. He was willing to follow Mr. Chamberlain 
a good distance along the preferential path, but he was not willing 
to support a plan for free trade .within the Empire and a tariff only 
against foreign countries. 

New Zealand had been settled almost wholly by British immi- 
grants, mainly of urban origin, but migrating to New Zealand with 
the intention of settling on the land. The habits and attractions of city 
life proved too strong for m.any of them, however, and they gradu- 
ally drifted into the New Zealand towns and exerted all their political 
influence to induce the Government to foster by tariff protection the 
development in New Zealand of the industries with which they were 
familiar, mainly the great staple industries of Great Britain, the 
woolen, clothing, boot and shoe, and machinery industries.® They 
were in large part successful in securing tariff legislation of this 
character, and under fiscal protection there developed in New Zealand 
domestic manufacturing industries of some importance. Some oppo- 
sition to protection came from the farming population, but the strength 
of their opposition was diminished by their feeling of rivalry with 
Australia, and more especially after 1903 by their resentment against 
the taxation of their agricultural products in the tariff of the new 
Commonwealth. Mr. Seddon was well aware of these conditions, 
and when the time came actually to propose a measure of British 
preference he so devised it that the British preference brought with 
it additional instead of less protection to domestic industry. 

ENACTMENT OF PREFERENTIAL TARIFF, 1903. 

Toward the end of 1903 Mr. Seddon introduced in the New Zealand 
Parliament a bill proposing to establish an initial measure of preference 
to British imports into New Zealand. The bill would establish 
preference on British imports for 38 items in the existing tariff law, 
not by reducing the rates of duty levied on British imports but by 
imposing additional duties on imports of the articles enumerated in 
the act when not the produce or manufacture of some part of the 
British Empire. On one item, cement, the '^preferential surtax" 
was to be equal to the amount of the existing duty. On 27 items, of 
which the most important were bicycles, carriages, carts and wagons, 
fancy goods and toys, earthenware and stoneware, glassware, plate 
and plated ware, and wrapping paper, the surtax was to be equal to 
one-half of the amount of the existing duty, which in most cases was 
20 per cent ad valorem. On nine items, which were free under the 
tariff then in force, duties of 20 per cent ad valorem were to be levied 
when they were imported from foreign countries; the principal articles 
in this group were gas and oil engines, certain specified iron manu- 
factures, printing paper, and rails. On one item alone, tea in pack- 
ages exceeding 1 pound in weight, was there a preferential remission 
of an existing duty in favor of British products . Unlike the C anadian 

'Cf. Harris, Percy A.: New Zealand and its Politics [1908], especially Ch. VIII, The Tariff. 



768 COLONIAL TAEIFF POLICIES. 

preference, the New Zealand preference was to apply immediately and 
unconditionally to all parts of the British Empire. (See p. 778.) 

The bill, in addition to the provision described above for a tariff 
preference to imports from any part of the British Empire, proposed 
to authorize the Government to enter into reciprocal agreements with 
an}^ part of the British Empire for the reciprocal reduction or re- 
mission of tariff duties to the extent that the revenue so remitted by 
New Zealand should equal as nearly as possible the remission by the 
other party to the agreement. Any such agreement, however, would 
be subject to ratification by the New Zealand Parliament. The bill, 
also authorized the governor to negotiate similar agreements with 
foreign countries, '^subject to a treaty with His Majesty" and subject 
also to parliamentary ratification. 

There was little or no opposition, either in the New Zealand 
Parliament or in the Dominion at large, to the establishment of a 
preference on British imports. But there was some criticism of the 
character of the measure proposed by Mr. Seddon and of the motives 
alleged to be behind it. The agricultural sections of the population 
were inclined to oppose the grant of preference to British imports 
except upon receipt of a reciprocal preference from Great Britain. 
Labor, on the other hand, was adverse to any intimations that the 
grant of preference and its continuance would in any manner be 
conditional upon a change in the fiscal system of the mother country. 
The free traders were critical of any preference proposals which would 
establish preference by surtaxes instead of by rebates of duty and 
which were to be conditional upon reciprocity. But the general 
body of electors favored the idea of preference as a means of cementing 
the Empire. The Government firmly maintained its attitude, and it 
answered objections from the opposition that not enough preference 
was established by repeating its promise that more would be granted 
in the future. It won on a division by 50 votes against 16. 

PROVISIONS FOR RECIPROCAL TRADE AGREEMENTS IN ACT OF 1903. 

The provisions authorizing the governor to negotiate for reciprocal 
remissions of duty with British and with foreign countries are given 
below. It is to be noted that any reductions of duty on British im- 
ports established as the result of agreements negotiated in conformity 
with this act would be in addition to and outside of the general pro- 
vision for preference to such imports. The provisions follow: ' 

^Tiere any country, being part of the British Dominions, reduces or abolishes, or 
proposes to reduce or abolish, the duty on any product or manufacture of New Zealand, 
the governor may enter into an agreement with that country to reduce or abolish the 
duty on any article or articles the produce or manufacture of such country to an extent 
that the estimated revenue so remitted shall equal as nearly as possible the estimated 
revenue remitted by that country: Provided, That no such agreement shall have 
effect until ratified by Parliament. 

Where any country not being part of the British Dominions reduces or abolishes, 
or proposes to reduce or abolish, the duty on any product or manufacture of New 
Zealand, the governor may, subject to or by vdrtue of a treaty with His Majesty, nego- 
tiate with such country for an agreement to reduce or abolish the duty on any article 
or articles the produce or manufacture of such country to an extent that the estimated 
revenue so remitted shall equal as nearly as possible the estimated revenue remitted 
by that country: Provided, That such agreement shall not have effect or be operative 
until ratified by an act of the Parliament of New Zealand. 

7 New Zealand Statutes, III Edw. VII (No. 78). 



NEW ZEALAND. 769 

III. Negotiations for Reciprocal Preference with Other 

Dominions, 1906-7. 

unsuccessful negotiations with australia. 

New Zealand in 1906 engaged in negotiations with a number of 
British colonies with a view to the negotiation of reciprocal agree- 
ments. As a result of an interview between Mr. Deakin, the premier 
of Australia, and Mr. Seddon, then premier of New Zealand, an under- 
standing was reached with respect to a special preferential arrange- 
ment between these two Dominions. The concessions made by the 
two parties to the agreement were to be on identical commodities but 
were to differ in amount. New Zealand was to admit Australian flour 
and raw sugar free of duty and to grant substantial concessions of 
duty on a number of raw materials and foodstuffs the product of 
Australia. The principal additional articles on which New Zealand 
was to grant concessions were bacon and hams, butter, cheese, eggs, 
various fruits, grain, preserved milk, olive oil, kerosene, potatoes, 
refined sugar, and timber. Australia was to grant, in return, com- 
pensating reductions of duty on the same articles when imported into 
Australia from New Zealand. Similar importations from other 
British countries were not to receive the benefits of the concessions. 
The agreement was to remain in force for three years and thereafter 
for one year after notice of termination was given by either party. 
If either of the parties to the agreement should make any change in 
the tariff rates on any of the items enumerated in the agreement, the 
other party was to be free to terminate the agreement upon giving 
one year's notice.^ 

The proposed agreement met with considerable opposition in New 
Zealand. Australia and New Zealand were alike in the nature of 
their products, and parts of the proposed arrangement were char- 
acterized as "shams "'or "window dressing," because they provided 
for reciprocal concessions on articles in which there neither was nor 
was likely to be any trade of significant proportions. It was also 
claimed in both Dominions that the concessions were unequal. The 
Australian Parliament finally approved the agreement, but it met 
with opposition in New Zealand both from farmers and fruit growers 
and from those who feared that a considerable loss of revenue would 
result, and the New Zealand Parliament refused to ratify it.^ 

THE NEW ZEALAND AND SOUTH AFRICAN CUSTOMS DUTIES 
RECIPROCITY ACT, 1906. 

A provision in the tariff resolutions of the South African customs 
union, passed in 1903, authorized the government to extend the pref- 
erential rebate of duties on imports from the United Kingdom to the 
products of any other British country "granting equivalent recip- 
rocal privileges." 

The New Zealand preference on imports from all British countries 
was not deemed sufficient to warrant the extension to New Zealand 
of the South African preference, because none of South Africa's im- 

8 The text of the proposed agreement is given in Australia's Parliamentary Papers, No. 70, F 9514, 1906. 
The agreement is further analyzed in Ch. 17, p. 787. 

9 The adoption by New Zealand and Austria of intermediate tariffs, and the apphcation of New Zealand's 
general rates to products of Australia from Dec. 1, 1921 (see p. 778), will doubtless cause a* renewal of 
negotiations. 



770 



COLONIAL TAEIFF POLICIES. 



portant export products were included in New Zealand's preferential 
tariff. New Zealand, in 1906, in order to obtain the advantages of 
this provision, negotiated a treaty with the South African customs 
union, whereby New Zealand, in return for the extension to her prod- 
ucts of the South African preferential rates, agreed to grant, upon a 
special list of the principal export products of South Africa, specified 
rates lower than those in the New Zealand preferential tariff, and 
upon all other South African products rates lower by 25 per cent than 
the rates of the Nev/ Zealand preferential tariff. This agreement went 
into effect in both countries on July 1, 1907, and was to continue in 
force until terminated by the governor in council of either colony. 

In the original Order in Council proclaimmg the treaty in effect 
in New Zealand, the rates to be levied on South African products not 
included in the list of articles subject to special duties were stated to 
be, according to the tr-eaty, ^'25 per cent less than the duties which 
would otherwise be payable" on South African products. The cor- 
rect rate according to the terms of the treaty was ''3 per cent (ad 
valorem) less than the duty which would otherwise be payable," but 
the correction was not made until March 31, 1909.^^ 

The following table presents a comparison, for the articles enumer- 
ated in the South African treaty, of the rates specified in the treaty 
and those imposed on British and on foreign imports by the tariff act 
of 1907: 



Table 2. — Comparison of rates of the tariff of 1907 with those of the treaty with South 

Africa. 



Treaty rates on j 

imports from Southi 

Africa. 1 ! 



Rates under tariff act of 1907. 2 



On British imports. 



On foreign imports. 



Feathers . 



Fish: 



Dried, pickled, or salted, n. 0. s. . 



Potted and preserved , 

Fruits, dried 

Fruits, fresh: 

Berries, lemons , 

Another 

Maize 

Sugar 

Tobacco, manufactured , 

Tea, not other%\T.se exempt , 

V/lnes, sparkling, containing not more than 

40 per cent proof spirit. 
Wines, other than sparkling: 

Containing not more than 40 per cent 
proof spirit. 

Containing over 40 per cent proof , 

All other goods, except spirits 



15 per cent ad va- 
lorem. 

IJd. per pound 

do 



Free. 



do 

do 

6d. percental 

Is. 8d. percental. . 
2s. 6d. per pound.. 

Id. per pound ] 2d. per pound 

5s. per gallon : 9s. per gallon. 



25 per cent ad va- 
lorem. 

10s. per hundred- 
weight, 

2d. per pound 

Free 



id. per pound — 

Id. per pound 

9d. percental 

Free 

3s. 6d. per pound. 



2s. per gallon. 



do 

3 per cent ad va- 
lorem less than 
the duty which 
would othermse 
be payable. 



do........ 

16s. per gallon. 
Various 



25 per cent ad va- 
lorem. 

15s. per hundred- 
weight. 
3d. per pound. 
Free. 

id. per pound. 

Id. per pound. 

9d. per cental. 

Free. 

3s. 6d. per pound. 

2|d. per pound. 

9s. per gallon. 



Do. 

16s. per gallon. 
Various. 



1 New Zealand Yearbook, 1908, p. 135. 



«Ibid.,pp. 105, ff. 



The agreement also provided that if either of the contracting 
parties should discriminate in its taxes between locally manufactured 
spirits and imported spirits, the manufactured spirits of the other 



" New Zealand Gazette, Apr. 15, 1909. 



NEW ZEALAND. 771 

contracting party should be admitted at a rate of duty equal to the 
excise payable on the locally manufactured spirits. 

The concessions made by Nqw Zealand to South Africa were not 
extended to any other country, British or foreign. 

The New Zealand tariff act of 1907, which came into effect on 
July 17, 1907, reduced or remitted the duties on several of the items 
on which concessions had been made by the treaty with respect to 
imports from South Africa. Section 7 of the act provided, however, 
that no higher duty should be levied on any of the products of South 
Africa because of the treaty than w^ould be levied under the new tariff 
act on the same products if they were the produce or manufacture 
of some other part of the British Dominions. 

UNSUCCESSFUL NEGOTIATIONS WITH CANADA. 

Canada, on February 26, 1904, extended to the products of New 
Zealand the privilege of admission at the rates of her preferential 
tariff in return for the establishment by New Zealand in the preceding 
year of a preference on imports from all British Dominions. The 
Canadian Government made several attempts, especially during the 
years 1906 and 1907, when the New Zealand tariff was undergoing 
revision, to negotiate a special reciprocal arrangement, similar in 
character to the one negotiated in 1906 between New Zealand and 
South Africa, but the efforts of the Canadian representatives were 
unsuccessful. 

IV. Developments in the Tariff since 1907. 

PREFERENCE EXTENDED BY TARIFF ACT OF 1907. 

In 1907 the Government introduced a bill ptoviding for a compre- 
hensive revision of the tariff and for a substantial addition to the 
list of items on which preference was granted to products of the 
Empire. The proposals of the Government were criticized, as in 1903, 
on the ground that they provided for additional taxation. A number 
of members of the opposition asserted that if it was really the desire 
of the Government to confer a benefit upon the British manufacturers, 
it should provide for a reduction of duties on their products instead 
of proposing additional taxation upon the products of foreign coun- 
tries. 

The Government in drawing up its proposals for an extension of 
the British preference kept in view both the need of New Zealand's 
manufacturing industries for protection against - British products 
and the possibility that additional installments by the colonies of 
preference to British products would induce the Imperial Govern- 
ment to reciprocate by establishing preference on colonial products. 
The statement of Mr. Millar, the mmister of trade and customs, in 
closing the debate for the Government, clearly indicates that the Gov- 
ernment had taken both these considerations into account. 

'^1 do not believe," Mr. Millar said, ''that this preference is only 
superficial. I have said we are prepared to give preference to the 
British manufacturers to the extent mentioned here ; and we believe 
that in time the old country will see that if she wishes to build that 



772 COLONIAL TAEIFF POLICIES. 

Empire up and keep it as strong as we all desire it to be she will 
have to consider the products of her colonies." 

The Government bill was passed by Parliament without serious 
opposition on September 25, 1907, but the act had come into effect 
provisionally on July 17. By the act of 1907 the number of tariff 
items with respect to which surtaxes were imposed upon imports 
from foreign countries was increased from the 38 items so provided 
for in the act of 1903 to 194 items. Of these, one item, Portland 
cement, as in 1903, was subject to a surtax of 100 per cent of the 
duty when imported from foreign countries; 111 items carried a 
surtax of 50 per cent of the duties on British imports; 33 items 
carried a surtax of 20 per cent of the duties on British imports; 14 
items, w^hich were free of duty when imported from British countries, 
carried a surtax of 20 per cent ad valorem when imported from 
foreign countries; 34 items, of which 5 were dutiable at 5 per cent 
ad valorem and of which the remainder were free, when imported 
from British countries, were subjected to duties of 10 per cent ad 
valorem when imported from foreign countries; and tea in packages 
of 5 pounds or over, which was free when imported from British 
countries, was subject to a tax of 2d. per pound when imported 
from foreign countries. As there were 497 items in the general 
tariff, preference was granted on approximately two-fifths of the 
items enumerated in the tariff. Of the 38 items on which preference 
had been established in 1903, the act of 1907 continued the preference 
on 30, generally in unchanged amount, and repealed the preference 
on 8, including automobiles, window glass, and surgical instruments. 

CHANGES IN PREFERENTIAL SCHEDULE, 1915. 

In 1915, in order to help meet the war expenses, a number of 
changes were made in the tariff, including several changes in the 
preferential schedule. The duty on bicycles from British countries 
was reduced from 20 per cent ad valorem to 10 per cent ad valorem, 
and the duty on foreign bicycles was reduced from 30 per cent ad 
valorem to 15 per cent ad valorem. Gas and oil engines, which, 
under the tariff of 1907 were free of duty when of British origin and 
subject to a duty of 20 per cent ad valorem when of foreign origin, 
were made subject to a duty of 10 per cent ad valorem when of 
British origin, remaining at 20 per cent ad valorem when of foreign 
origin. On the other hand, the preference on electric motors and 
transformers was increased from 5 to 10 per cent ad valorem, and on 
motor cars the preference was reestablished, the rates being 10 per 
cent ad valorem on British imports and 10 per cent ad valorem on 
imports from all other sources. 

The two instances in the revision of 1915 of a reduction in the 
amount of the British preference met with some criticism in the 
Dominion. It was urged by some New Zealanders that the 
revision was unduly favorable to United States trade, and, indeed, 
there appears reason to believe that the desire to increase trade with 
America played a part in determining the character of the revision. 
The remission of duties on wool and meat by the United States 

" New Zealand Parliamentary Debates (Sept. 17, 1907), vol. 140, p. 968. 



NEW ZEALAND. 773 

tariif act of 1913 was appreciated in New Zealand, and gave rise to 
hopes that the United States, which hitherto had imported very 
httle from New Zealand, would become an important market for 
New Zealand products. The reductions of the preferences on 
bicycles and on gas and oil engines were a recompense for the remis- 
ion by the United States of the duties on wool and mutton. 

PREFERENCE EXTENDED BY THE FINANCE ACT, 1917. 

The finance act of 1917, as part of the scheme of additional war 
taxation, provided for increased duties on a number of commodities. 
The duties on alcoholic drinks and tobacco, which had always yielded 
a large fraction of the customs revenue, were substantially increased, 
but no preferential surtaxes were levied on these commodities. The 
chief change in the preferential schedule made by the act was the 
imposition of surtaxes of from 10 to 20 per cent ad valorem on the 
principal items in the textile schedule comprising such items as 
textile piece goods, lace and laces, ribbons, haberdashery, ready- 
made clothing, hosiery, hats of all kinds, millinery, and textile yarns, 
none of which had previously been subject to a surtax upon impor- 
tation from foreign countries. 

TARIFF OUTLOOK IN NEW ZEALAND. 

During the war considerable attention was devoted to the question 
of the postwar tariff and trade relations of New Zealand, but beyond 
the enactment in 1915 of a law to come into effect automatically 
immediately upon the declaration of peace, imposing a surtax of 50 
per cent ad valorem, in addition to all other duties otherwise imposed, 
on imports from Germany, no change was made in the existing tariff 
polic}^. 

There was a strong feeling in New Zealand, stimulated somewhat 
by the publication of the resolutions of the Paris Economic Conference 
of 1916, that the policy of imperial preference should be extended and 
that the Allies should receive more favorable treatment than ex-enemy 
countries or neutrals. The reduction or remission of duties by the 
United States on a number of the important export products of New 
Zealand in the tariff act of 1913, the increased exports to the United 
States which resulted from this and other causes, and the general 
belief in New Zealand that the United States would in the near 
future become a much more important market for New Zealand ex- 
ports than she had hitherto been, and, finally, the entrance of the 
United States into the war against the Central Powers stimulated the 
development of closer tariff relations with the United States and led 
to some discussion of the possibility of the two countries negotiating 
a reciprocal tariff' agreement. 

At a conference of the chambers of commerce of New Zealand, held 
in Wellington November 28 and 29, 1917, the following resolutions, 
dealing with preferential treatment with regard to tariffs, shipping, 
and contracts, were adopted, only one member voting in opposition: 

That with a view to encouraging the establishment of new industries in the British 
Empire and giving a measure of confidence and security to capital to be embarked 
therein, as well as assisting the expansion of existing industries, the governments of 



774 COLONIAL TAEIFF POLICIES. 

the Empire be ui'ged to make it obligatory on all Government departments, munici- 
palities, railways, dock and harbor boards, gas, water, and electric light corporations, 
and all such bodies spending public moneys, or enjo\ing charters from the Govern- 
ment or other public authorities, to purchase Empire-made goods, and to place all 
contracts with British firms, exceptions to be made by the special permission of the 
proper authority only in cases where such a course is considered to be at variance 
with the public interests. 

That in any negotiations for peace between the Allies and the Central Powers the 
enemy Governments be compelled to make compensation for the ships illegally 
destroyed, ship for ship or ton for ton.^^ 

On May 22, 1918, Mr. Arthur Myers, the minister of customs, 
stated that the Government intended to revise the tariff as soon as a 
favorable opportunity presented itself, and made a statement with 
regard to New Zealand's trade and tariff policy, reported by a Welling- 
ton newspaper as follows : ^^ 

New Zealand's policy with regard to trade, the minister pointed out, had always 
been a clearly defined one . To put it shortly, that policy had always been the encour- 
agement of our own industries within the Dominion and the fostering of economic 
relationships with the Empire. After the war, of course, the imperial policy of inter- 
reciprocal trading now taldng definite shape by means of discussions between repre- 
sentatives of the whole Empire at the periodical conferences and imperial cabinets 
would eventually become an established fact; and the course to be followed by New 
Zealand at that time would only be an extension of that policy of imperial preference, 
of which she had always been a warm advocate, with the additional pro^dso that, next 
in preference to our own Empire, there should be an effort made to swell the volume 
of trade with the * * * Allies * * *. 

Earl}^ in 1919 it was officially stated that a tariff revision would be 
taken up during of soon after the 1920 session of Parliament, but 
legislative action still waits on the convening of Parliament in 1921. 
Apparently the Government is seeking to take advantage of all the 
factors in changing trade conditions. In November, 1920, Mr. Mas- 
sey reiterated the general intention of his administration to extend 
imperial and intercolonial preference. He particularly mentioned 
his willingness to negotiate a reciprocal tariff arrangement with 
Australia at any time.^^ For legislation of November. 1921, see page 
778. 

OTHER PREFERENCES TO BRITISH IMPORTS. 

There are several features in the legislation of New Zealand and 
its municipalities which promote, under certain circumstances, the 
establishment of preferences to British trade outside of or in addi- 
tion to the preferences regularly established in the tariff acts of the 
colony. The customs act, 1908, which lays down the rules for the 
administration of the customs, contains a provision authorizing the 
governor general, when it appears to him that British ships and ship- 
ping are being discriminated against unfairly, to retaliate by impos- 
ing prohibitions, restrictions, or additional duties on imports in the 

12 Auckland Star, Auckland, New Zealand, N-ov. 29, 1917. New Zealand Herald, Auckland, New Zea- 
land, Nov. 29, 1917. 

The conference also recommended that a lower scale of tonnage dues and port charges should apply in all 
British ports to British-owned vessels, that privileges in British ports should be accorded to allied and 
neutral shipping equivalent only to corresponding privileges accorded British shipping by aUied and 
neutral countries, that enemy shipping should pay in British ports at least double the dues paid by any 
other shipping, and, finally, that the Government should, by legislation, empower harbor board authori- 
ties in the Dominion to impose differential rates of tonnage, dock and wharf dues, and port charges. 

13 The Dominion, WelUngton, New Zealand, Mav 23, 1918. 
" New Zealand Herald, Auckland, Nov. 29, 1920. ' 



NEW ZEALAND. 775 

vessels of the country sanctioning such discriminations, provided, 
however, that no treaty obhgations would be violated thereby.^^ 

A steamship operating between Auckland, New Zealand, and Van- 
couver, British Columbia, is subsidized by the Governments of both 
New Zealand and Canada on. condition that preference is given, in 
assigning freight space, io the products of the two Dominions. 

One other form of preference, although not statutory, is deserving 
of mention. It appears that several of the more important local 
governing bodies in New Zealand make it a practice in considering 
tenders for important public works not to accept the offers of non- 
British companies, even though their bids are lower than those 
received from British concerns. The Wellington harbor board has 
been especiall}^ noted for its adherence to this practice. ^^ 

REGULATIONS RESPECTING DEPRECIATED CURRENCIES. 

Throughout the war period ^^ the basis of conversion of foreign 
currencies continued to be ^Hhe officially fixed standard rates which 
(except for British India) may be regarded as equivalent to nominal 
prewar commercial rates." ^^ A customs ruling which was promulgated 
on June 24, 1920, provided for the assessment of duties on imports 
from European countries with depreciated currencies on '^home- 
consumption values converted at current bank rate of exchange 
instead of on a gold basis." ^^ It is now announced that on and 
after January 1, 1922, current rates of exchange will also be used in 
converting appreciated currencies.^^ 

V. Dependencies of New Zealand. 

COOK ISLANDS. 

The Cook Islands ^^ were annexed to New Zealand on June 10, 
1901, their status previously having been that of a British protecto- 
rate. The existing local governments in the islands were continued, 
but their ordinances were required to obtain the assent of the gov- 
ernor of New Zealand before becoming law. The Governor in Coun- 
cil of New Zealand was given power to direct that any of the laws in 
force in the islands at the time of annexation should be repealed or 
modified and also to apply to the islands any law in force in New 
Zealand, either in whole or with modifications, with the exception of 

14 New Zealand customs act, 1908, sees. 204-206, not repealed by subsequent customs acts. 

In 1905, in response to complaints from domestic and British manufacturers of agricultural implements 
that an American trust was dumping in the colony in order to destroy competition, an act was passed 
by the New Zealand ParUament authorizing, under certain conditions, the imposition of countervaHLng 
tariff duties on imports sold at an unfair price or the bon using of domestic manufacturers to help them 
meet the unfair competition. The preferential feature of this legislation consisted in a pro\ision that 
implements manufactured in the Umted Kingdom were to be treated as if made in New Zealand with 
regard to both the bonus and the countervailing duties. It is interesting to note that the same privilege 
was not extended to the agricultural-implement manufacturers of Canada. There does not appear to have 
been any instance of the application of this legislation, its presence on the statute books apparently having 
been suflScient to prevent a recurrence of the trade practices against which it was directed. (Cf. Schole- 
field, G. H,: New Zealand in Evolution, London, 1909, Ch. XXIII.) The act was repealed several years 
later. 

16 Ibid., p. 323. 

17 A change was announced to take effect on Feb. 1, 1920 (See Commerce Reports, Feb. 13, 1920, p. 908) 
but this regulation was cancelled, if the Board of Trade Journal is correct. (See B. T. J. Feb. 26, p. 311, 
andMar. 25, 1920,p.445.) 

18 Board of Trade Journal, Feb. 26, 1920, p. 311. 

19 Ibid., July 1, 1920, p. 21. 

20 Commerce Reports, Sept. 26, 1921, p. 242. 

21 The Cook Islands are the chief of widely scattered groups 1,000 to 1,500 miles northeast of New Zealand. 
The total area of these dependencies of New Zealand is about 280 square miles, .with a population of about 
13,000. The total trade in 1913 was $1,071,000 and in 1920 11,314,000. (Commerce Reports, Apr. 11, 1921.) 



776 COLONIAL TARIFF POLICIES. 

the laws relating to alcoholic liquors. The tariff act then in force 
in New Zealand was applied to imports into the Cook Islands from 
countries other than New Zealand, but the governor of New Zealand 
was authorized to modify the tariff by Order in Council as applied 
to any of the Cook Islands. 

The customs duties act of 1908 (sec. 11) authorized the governor 
to reduce or remit any of the duties imposed on imports into the 
Cook Islands by the New Zealand tariff act of 1907. It further pro- 
vided for duties of Jd. a pound on sugar and of 10 per cent ad valo- 
rem on cotton and on linen piece goods imported into the Cook 
Islands, whether from New Zealand or elsewhere, in addition to 
duties on such imports imposed elsewhere in the act. 

In 1915 some changes were made in the constitution act of the Cook 
Islands. The office of secretary for the Cook Islands was created, and, 
subject to the control of the minister for the Cook Islands, this officer 
was made responsible for the administration of the islands. The local 
councils in the islands were empowered to make laws for their gov- 
ernment, but with certain limitations, including the withholding from 
them of authority to deal with customs duties. The customs tariff 
of New Zealand continued in effect in the Cook Islands. 

The New Zealand customs act of 1915 laid down the rules to govern 
the administration and imposition of duties in the Cook Islands. 
The act provided that all goods imported into the Cook Islands from 
New Zealand, whether the produce or manufacture of New Zealand 
or not, should be admitted free of duty unless special provision to the 
contrary was made elsewhere in the act. The following exceptions 
were enumerated: 

(1) Goods on which duty drawback had been claimed in New 
Zealand. 

(2) Goods which for any reason did not pay the duty customarily 
imposed in New Zealand. 

(3) Goods manufactured in bond in New Zealand unless they had 
been entered in New Zealand for home consumption, and duty (if 
any) duly paid thereon. 

(4) Goods subject to excise tax in New Zealand, unless excise tax 
had been paid thereon. 

(5) Duties were levied on imports into Cook Islands, whether from 
New Zealand or elsewhere, in addition to all other duties otherwise 
chargeable, as follows: On sugar, |d. per pound; on cotton piece- 
goods (except calico), linen piece goods, and piece goods of mixed 
linen and cotton, 10 per cent ad valorem. 

The governor was authorized by the customs act of 1915 as by the 
customs act of 1908 to reduce or remit any of the duties on imports 
into the Cook Islands. The act of 1915 (sec. 301) went further, how- 
ever, by making provision that, in addition to the duties which 
were imposed on imports into the Cook Islands from foreign countries 
through the application of the New Zealand tariff to the Cook Islands, 
there should be chargeable on all goods imported into these islands 
from any place other than New Zealand and which, would, if imported 
into New Zealand, be admitted free of duty, such ad valorem duty, 
not exceeding 10 per cent, as the governor from time to time by 
Order in Council should determine. The new legislation of 1915 not 
only provided, therefore, for the continuation of the customs union 
between Nev/ Zealand and the Cook Islands, whereby a tariff prefer- 



NEW ZEALAND. 777 

ence equal to the duties enumerated in the tariff of New Zealand was 
accorded to each in its trade with the other, but added a provision 
authorizing a preference to New Zealand in the Cook Islands on such 
products as were not subject to duty under the New Zealand tariff. 
The authority thus granted to the Governor in Council appears, 
however, never to have been exercised. 

THE TERRITORY OF WESTERN SAMOA (MANDATED TERRITORY). 

The territory of Western Samoa, formerly German Samoa, has 
been intrusted to New Zealand under a mandate according to the 
terms of the treaty of Versailles, 1919. It is discussed in the appendix 
to the chapter on '^Colonial Tariff Policy of Germany, page 265." 

VI. Summary. 

Although preference in favor of British imports v/as established 
in New Zealand shortly after it became a British colony in 1840, there 
Vvere no preferential provisions in anjr of its tariffs from the time it 
obtained control of its fiscal system, in 1853, until 1903. Until the 
late years of that period the tariff was mainly a revenue tariff, but 
with the growth of the movement for protection there developed a 
sentiment in favor of preference to Empire products, and in 1903 an 
act was passed establishing preference in favor of imports from any 
part of the Empire on 38 items of the tariff then in force. The 
preference was granted by raising the rate of duty on the items 
enumerated in the act when imported from foreign countries, leaving 
unchanged the rate upon British products. The preferential rate 
was for the most part 33 J per cent less than the full rate, but on 9 
items, which had been free and which continued to be free under the 
preferential schedule, a duty of 20 per cent ad valorem was imposed 
under the general schedule. 

In 1907 an act was passed increasing to 194 the number of items 
on which preference to Empire products was granted. The prefer- 
ential reductions on British products were 33 J per cent on 111 items 
and 16§ per cent on 33 items. On 14 items, which were free when 
of Empire origin, a duty of 20 per cent ad valorem was levied v/nen 
imported from foreign countries; on 34 items, of which 5 were duti- 
able at 5 per cent ad valorem and of which the remainder were free 
when imported from British countries, a duty of 10 per cent ad 
valorem was imposed when imported from foreign countries. Of 
the 38 items on which preference had been established in 1903, the 
act of 1907 continued the preference on 30, generally in unchanged 
amounts, and repealed the preference on 8 by making them free of 
duty from all sources. 

In 1915, among other changes in tariff rates, were two increases 
and two equal decreases in the preferential rates. In 1917 the 
preference to Empire products was further enhanced by the im- 
position of surtaxes of from 10 to 20 per cent on the principal items 
in the textile schedule when imported from foreign countries. Thus, 
since the modest beginning of 1903 the preferences granted by New 
Zealand have twice been materially extended, and now about one- 
half of the tariff items have preferential rates, and of those which do 



778 COLONIAL TAEIFF POLICIES. 

not about two-thirds are on the general free list.^- A further ex- 
tension of the preference is foreshadowed. See addendum below. 

New Zealand grants its preferential tariff to all products of the 
Empire, but because none of the important export products of 
South Africa were included in New Zealand's preferential tariff, 
South Africa did not consider New Zealand's preference an '^equiva- 
lent reciprocal privilege" such as entitled products of New Zealand 
to the South African preferential rates. New Zealand, therefore, 
in 1906 negotiated for the extension to her products of the South 
African preferential rates, and agreed to grant upon a special list of 
the principal export products of South Africa specified rates lower 
than those of her preferential tariff, and upon all other South African 
products rates lower by 25 per cent than the rates of her preferential 
tariff. This agreement became effective in both countries on July 1, 
1907. The concessions made by New Zealand to South Africa were 
not extended to any other country, British or foreign. New Zea- 
land's negotiations with Canada and Australia have, for various 
reasons, been without result. 

{Bibliography! on page 8S2,) 

' Addendum. 

On November 3, 1921, the Government introduced a new tariff bill which became provisionally effective 
at once and which passed the lower house on December 9 without substantial alterations. The new tariff 
raises some rates and lowers others, but its chief characteristic is the increase in the preferences accorded 
to British trade. The number of items upon which a preference is given is practically doubled, but the 
total number of items is increased by about one-third. The previous tariff contained 210 preferential 
items, the bill as introduced 367, and as passed 409 (according to a press dispatch ) out of a total of 60 1 items. 
Upon the items upon which there v/as formerly a preference the rate of that preference has been generally 
increased by raising the rate upon non-British goods, so that the maximum rate in ordinary use in the 
New Zealand tariff is now 40 or 45 per cent instead of 37J per cent ad valorem. Differentials in favor of 
British trade as great as 15 and 20 per cent ad valorem are much more numerous than before. 

A special duty of 2h per cent to 25 per cent ad valorem is levied upon products subject to protective or 
preferential tariff rates when these products come from countries which have depreciated currencies. 

The new tariff law provides a schedule of intermediate rates to be used as a conventional or barg.aining 
tariff. The intention is to use this tariff first of all to obtain concessions from Australia. The law pro- 
vides that products of dominions which discriminate against New Zealand's products (se? p. 788) may be 
made subject to the rates of the general tnrifi, and by a resolution of the lower house this provision has been 
applied to products of Austraha, effective December 1, 1921. The provision is applicable not only to 
Australian products, but to all goods dutiable under the preferential schedule (or under the intermediate 
schedule when that becomes effective) which reach New Zealand via Australia unless they come on a 
through bill of lading. (See Commerce Reports Dec. 5, 12, and 19; Journal of Commerce, Dec. 13; B. T. J., 
Nov. 24, Dec. 1; Times Trade Supplement, Dec. 3, 1921.) 

«2 The cliief classes of articles which are free are foods, alcoholic beverages, drugs, leather, china, fancy 
goods, paper, timber, oils, and miscellaneous. 



Chapter XVII. 
PREFERENTIAL TARIFFS IN AUSTRALIA. 



CONTENTS. 



Page. 

I. TariflE policies in Australia prior to the 

establishment of preference in 1907 779 

Imperial opposition to intercolonial pref- 
erence 780 

Formation of the Australian Common- 
wealth, 1900-1901....... 781 

The first commonwealth tarifl. 1901-2. ... 781 
Australian attitude toward the Cham- 
berlain policy 782 

Resolution of the Austrahan Federated 

Seaman' s Industrial Association 783 

Resolution of the Political Labor League. 783 

The preference resolutions of 1904 783 

Tariff relations with other British Do- 
minions- 
Preferential agreement with South 

Africa, 1906 784 

The " color line" in sugar duties. 785 
Negotiations with Canada, 1905-1914. 785 
Table 1 .—Australian rates of duty 
on Canadian products under 
the tariffs of 1 902 and 1908 .... . 786 
N egotiations with N ew Zealand, 1906. 787 
Australian preference disadvanta- 
geous to other British possessions. . 788 
Table 2. — Imports of merchan- 
dise from British possessions, 

1913 789 

Customs tariS (British preference) biU of 

1906 789 

Bill reserved by the governor general. 791 

The colonial conference of 1907 792 

Resolution submitted by Mr. Deakin 
for intercolonial preference 793 

II . Establishment of preferences, 1907-8, and 

their extension, 1911-1917: 
Preference to British products estab- 
lished in 1907 794 

The extent of the preference 794 



II. Establishment of preferences, 1907-8, and 

their extension, 1911-1917— Contd. 

Table 3. —Average rates of duty 
on British goods under the tar- 
iffs of 1902 and 1908 795 

Tariff amendment of 1911 796 

Table 4.— Changes in preference made 

by amendments of 1911 796 

Tariff revision of 1914-1917 797 

Table 5. — Simimarized comparison of 
the tariffs of 1908-1911andl914-1917. 798 
Minor amendments in tariff rates, 1917. . . 798 

III. Preference augmented by recent tariff 

legislation: 

Tariff of 1920 799 

Extent of the preference to Great 

Britain. 799 

Table 6.— Comparison of prefer- 
ences in Austrahan tariffs since 

1908 800 

The intermediate tariff 800 

Deferred duties. 801 

Penalty for dumping 801 

Subsidized foreign vessels penahzed. . 802 
Preferential import restrictions 802 

IV. Preferential features of customs adminis- 

trative laws: 
Provisions intended to safeguard British 

preference against abuse 802 

Customs regulations discriminate in favor 

of Canada 803 

Exchange regulations. 804 

V. Tariffs of AustraUa's dependencies: 

Papua (British New Guinea) 805 

Norfolk Island 805 

New Guinea (mandated territory) 806 

Preference to products grown by British 
settlers in the New Hebrides 806 

VI. Summary 807 



I. Tariff Policies in Australia Prior to the Establishment 

OF Preference in 1907. 

Before the adoption by Great Britain of the poHcy of free trade and 
of uniform treatment of British and foreign goods throughout the 
Empire, the Austrahan colonies, like the other British colonies, en- 
joyed tariff preference for their products in Great Britain and were 
required by imperial legislation to grant in return preferential treat- 
ment to British imports, but with the abolition of the old colonial 
system in Great Britain and the extension of representative govern- 
ment to the Australian colonies came the elimination of all nrefer- 
ential provisions in their tariffs. 

The tariff history of the Australian colonies from their establish- 
ment as self-governing colonies to their union as a federal common- 
wealth was marked by a succession of attempts to find a basis of 
agreement for some measure of customs harmony among themselves. 
During this period each colony developed its own fiscal and tariff 



185766°— 22- 



-50 



779 



780 COLONIAL TARIFF POLICIES. 

S3^stem. Within each colony there were differences of opinion with 
regard to the poKcy to be followed, but some of the colonies, Victoria 
conspicuously, were protectionist in sentiment and in their legislation, 
while others, New South Wales in particular, were under free-trade 
regimes. This difference in fiscal policies gave rise to the movement 
for some form of closer tariff organization of Australia and, at the 
same time, made the aim of the movement difficult of attainment. 
It is not necessary here to enter in any detail into the history of the 
many intercolonial conferences which were held. They failed each 
time to reach any tangible result, either because of the impossibility 
of reconciling the conflicting tariff policies of the colonies or because 
of the refusal of the imperial authorities to approve some of the 
plans mutually agreed upon by the colonies. 

IMPERIAL OPPOSITION TO INTERCOLONIAL PREFERENCE. 

The opposition of the imj>erial authorities to certain of the proposals 
of the Australian colonies is a demonstration of the scrupulous pre- 
cautions which Great Britain took during the period of political 
ascendancy of the principles of the Manchester school of economic 
thought to prevent the slightest infraction either on her own part 
or by a colony ujider her control of the principle of nondiscrimination 
in tariffs. 

As early as 1842 Lord Stanley, on the ground that this legislation 
proposed to establish differential duties, vetoed an act of New South 
Wales admitting free of duty the goods of New Zealand, which had 
just been separated from New South Wales as an independent colony. 
A Tasmania act of 1867 providing for intercolonial free trade with 
New Zealand was vetoed by the imperial authorities on sinular 
grounds. In dispatches to the governor of New South Wales in 1868 
and again in 1869 the colonial secretary took the position that the 
imperial authorities could not permit the establishment of differ- 
ential duties in the Australian colonies in favor of each other, but he 
promised that sanction would be given for a customs union if the 
colonies could agree to establish it. 

In 1870 an intercolonial conference was held at Melbourne, but the 
conflicting tariff policies of Victoria and New South Wales prevented 
agreement upon a customs union. The British acts granting consti- 
tutions to various Australian colonies contained provisions restrain- 
ing colonies from establishing differential duties. The conference of 
1870 passed a resolution requesting the imperial authorities to grant 
the right to establish intercolonial • free trade. The reply of the 
colonial secretary. Lord Kimberley, to this resolution stated the 
objections of the Imperial Government to protective duties and to 
tariff discriminations, but promised imperial assent to any plan for 
customs union upon which the colonies could agree. The colonies 
persisted in their efforts to secure authority to establish inter- 
colonial free trade, and, finally, in 1873, the British Government 
passed the Australian Colonies Duties Act, permitting full freedom to 
the Australian colonies with regard to their tariff relations with each 
other or with New Zealand, but, with this exception, continuing the 
prohibitions against differential duties on imports and against the 
violation of any British treaty guaranteeing the open door in 
Australia. 



AUSTRALIA. 781 

The freedom conferred by the act of 1873, so urgently sought, was 
never utilized, once it had been secured. Another intercolonial con^ 
ference, held at Melbourne and Sydney in 1880 and 1881, failed once 
more to establish agreement upon a common tariff policy. The 
difficulties and inconveniences resulting from the differing tariff 
pohcies of the several colonies continued, and were especially irk- 
some to the intercolonial border and transit trades. The allowance 
of bonding privileges for goods passing in transit from one colony 
through a second colony, and a liberal system of drawbacks for re- 
exports, mitigated, but did not wholly remove, the difficulties, and 
the hardships resulting from conflicting tariffs were an important 
factor in leading, in 1901, to the establishment of political union. ^ 

FORMATION OF THE AUSTRALIAN COMMONWEALTH, 1900-1. 

In 1900 the Australian colonies finally reached a basis of agree- 
ment for political union and were joined to form a federation under 
the name of the Commonv/ealth of Australia. The chief obstacles 
in the way of agreement had been the conflicting tariff policies of 
the colonies, and the situation was complicated by the existence in 
many of the States of industries which had been established under 
the protection of tariff duties on imports and which the States con- 
cerned were determined to retain. But in the course of the pro- 
tracted negotiations and conferences, a common basis of agreement 
was reached and the Commonwealth was launched. The Common- 
wealth was entrusted by the constitutional act creating it ^ with the 
power of making laws with respect to ^' trading and commerce with 
other countries and among the States," taxation, and bounties on 
production or export. The act also provided that the collection and 
control of customs duties and of the payment of bounties should 
pass to the government of the Commonwealth, and that for a period 
of 10 years after the establishment of the Commonwealth, and there- 
after until Parliament should provide otherwise, three-quarters of 
the customs and excise revenue should be handed over to the 
States. The Commonwealth was instructed to enact a uniform 
tariff within two years of its establishment, and upon its doing so, 
trade among the States was to be free. Exception was made of 
Western Australia, which, for a period of five years and at rates 
diminishing in amount yearly in a stated ratio, was authorized to levy 
duties on the imports of products of the other Australian States. 

THE FIRST COMMONWEALTH TARIFF, 1901-2. 

During the interval between the inception of the Commonwealth 
and the introduction of a tariff bill in Parliament to apply uniformly 
to the whole Commonwealth the tariffs of the separate colonies 
continued in effect. The first Commonwealth tariff was introduced 
in the house of representatives on October 8, 1901, and immediately 
came provisionally into effect. 

1 For the early tariff history of the Australian colomes, see Cowderoy, B.: Reciprocal Tariffs and Inter- 
colonial Trade (1855-1883), Melbourne, 1883. Allin, C. D.: A History of the Tariff Relations of the Aus- 
tralian Colonies. University of Minnesota, Studies in the Social Sciences (1918), No. 7. Chornley, C. H.: 
Protection in Canada and Australasia, London ,1904. Pulsford, E . : Commerce and the Empire, New York, 
1904. 

2 Great Britain: The Commonwealth of Australia Constitution Act, 63 and 64 Victoria, Ch. 12, 1900. 



782 COLONIAL TAEIFF POLICIES. 

The drafting of a satisfactor}' tariff measure for the Common- 
wealth was rendered difficult by the conflicting tariff policies of the 
newly federated colonies and by the existence in every State of 
industries which demanded tariff protection for their preservation. 
The new tariff was intentionally protective, but, as a compromise 
with the free-trade leanings of several of the States, and of New 
South Wales in particular, it was made lower in its rates of duty 
than the previously existing tariff of Victoria, the most protec- 
tionist of the States. 

There was little interest in Australia at this time in the policy 
of preference,^ and no steps were taken to incorporate preferential 
provisions in the new tariff bill. The bill became lav/ on September 
16, 1902. From the date of its introduction trade between the 
States had been free, with the exception mentioned above in regard 
to Western Australia. 

AUSTRALIAN ATTITUDE TOWARD THE CHAMBERLAIN POLICY. 

In 1903, while Mr. Chamberlain's proposals for protection in Great 
Britain as a means of carrying out the policy of reciprocal prefer- 
ence were being hotly discussed in England, Australia as a whole was 
either indifferent or hostile. The free traders did not wish to adopt 
a policy which would strengthen the position of the protectionists in 
Great Britain or would lead to increased duties in Australia. The 
protectionists in Australia, on the other hand, would not consent to 
any proposals which involved the reduction of duties on imports 
from Great Britain, whence came the chief competition with the 
manufactures of Australia. The wheat growers and sheep raisers 
were well disposed toward a policy which would bring their products 
preferential treatment in Great Britain, but sheep raisers feared 
retaliation on their wool from the continental European countries to 
which much of it was exported. Some of the free traders advocated 
the general reduction of duties to a revenue basis, and maintained 
that as the bulk of the imports of manufactured products already 
came from Great Britain their policy would be of greater benefit to 
the British manufacturers than the establishment of preference 
through the increase of the duties on foreign imports. 

A general election held in December, 1903, resulted in the return 
of 24 protectionists, 27 free traders, and 24 labor men. The labor 
representatives joined with the free traders to form a ministry. 

The Labor Party in Australia included both free traders and 
protectionists, and as a party was neutral with respect to the fiscal 
question. At the initiation of Mr. Chamberlain's campaign for 
imperial preference, the Australian Labor Party gave it mild support, 
but later, influenced largely by the position taken by the English 
labor unions, it assumed an attitude of opposition to that phase of the 
preferential movement in Australia which took the form of an attempt 
to induce Great Britain to abandon free trade in order to be in a 
position to grant tariff preferences to the colonies. The following 
resolutions, the first of which was adopted by the annual conference 

3 In 1895 South Aiistraiia negotiated an agreement with New Zealand providing for preferential treat- 
ment of New Zealand products in return for similar treatment for the products of South Australia. The 
Legislature of South Australia refused, however, to ratify the agreement, and consequently it did not 
coine into effect. 



AUSTRALIA. 783 

of delegates of the Australasian Federated Seamen's Industrial 
Association, at Wellington, New Zealand, in 1903, and the second 
by the Political Labor League, which is the political organization of 
the labor protectionists of Victoria, indicate the general position of 
the Labor Party with regard to preference. 

RESOLUTION OP THE AUSTRALIAN FEDERATED SEAMAn's INDUSTRIAL ASSOCIATION. 

That this conference is of the opinion that any preference to be given in the colony 
to goods produced in Great Britain should be an acknowledgment of the protection 
afforded by the British Navy and not with the expectation of any further bonuses on 
our products in the British markets; that any tax on foodstuffs is bound to increase 
the cost of living in Great Britain, while the taxing of raw products and partly manu- 
factured goods would dislocate and destroy British manufacturing interests; that the 
best way to secure the predominance of Britain's manufacturing industries is to 
improve the educational methods of the country, and free both capital and labor 
from the incubus of rents and royalties by the taxation of land values; and, further, 
that this conference is of the opinion that the integrity and prosperity of the Empire 
will be best maintained by the exercise of absolute fiscal independence of its several 
parts, and would emphatically repudiate the suggestion that the loyalty of the colonies 
can only be secured by Great Britain consenting to tax her people's food in the interests 
of the colonial producers. ^ 

RESOLUTION OF THE POLITICAL LABOR LEAGUE. 

That this meeting of the Melbourne branch of the Political Labor Council of Vic- 
toria resolves that the Chamberlain scheme of preferential trade will be of no benefit 
to the working classes of Australia; that it tends to further increase national and racial 
animosities; that it is against economic development of Australian industry; and, 
further, that we call upon our fellow workers in Australia and the United Kingdom 
to be not misled by the sophistry or capitalistic cliques, whose sole aim and object 
is the continued exploitation of the working classes of both hemispheres.^ 

Mr. J. C. Watson, the prime minister, stated the position of the 
Labor Party on the question of preference, as follows : 

We should * ^ * wait until the mother country has made up her mind on the 
subject. The first move must come from the mother country, because she has the 
largest interest at stake. I have no intention to allow any words of mine to be used 
as a lever one way or the other. ^ 

THE PREFERENCE RESOLUTIONS OF 1904. 

The Watson administration, which had entered into office on April 
26, 1904, was defeated in the following August by a coalition of the 
free traders and a majority of the protectionists. Among the condi- 
tions of the coalition was the agreement that the '^fiscal peace'' 
should be continued — i. e., that the fiscal issue should not be raised — 
and that all parties should have a free hand with regard to preference. 
The majority of the Government amounted to 2 votes only. 

In an attempt to break up the coalition the opposition put forth a 
motion in favor of preference by means of increased duties on foreign 
imports. Mr. Alfred Deakin, at that time the leading advocate in 
Australia of preference, succeeded in substituting a resolution of his 
own providing for preference to Great Britain on condition that the 
mother country grant a reciprocal preference on Australian goods. 
There was, hoVever, little interest in the question of reciprocity. 

4 Quarterly Review, Preference in New Zealand, July, 1905, p. 169. 

& Quarterly Review, Preference, The Colonial View, April, 1905, pp. 578-579. 

6 Ibid, p. 566. 



784 COLONIAL TAEIFF POLICIES. 

Mr. G. H. Reid, the prime minister, admitted in the course of debate 
that a majority of the electors of Australia at the general election of 
December, 1903, had declared themselves to be in favor, in the ab- 
stract, of a policy of preferential trade. ''But I believe," he said, 
''that the greatest mass were anxious simply to do anything which 
the mother country thought would help her. I believe that a large 
number more were fascinated by the attractive prospect of an enor- 
mous market for Australian produce with a fence raised against other 
competitors. A large number of protectionists were also fascinated 
with the prospect, because they did not think arrangements would 
be so adjusted as seriously to injure the protected industries of 
Australia." ^ 

TARIFF RELATIONS WITH OTHER BRITISH DOlvnNIONS. 

PREFERENTIAL AGREEMENT WITH SOUTH AFRICA, 1906- 

When Mr. Deakin became prime minister, in 1906, the discussion of 
preference was resumed in the Australian Parliament, Among the 
measures taken in this year toward the establishment of preference 
was the introduction of a bill, the "Customs tariff (South African 
preference), 1906," to bring into effect an agreement with South 
Africa for reciprocal preference. The agreement provided for re- 
duced duties, amounting in most cases to 25 per cent less than the 
rates imposed by the customs tariff of 1902 on imports of a specified 
list of South African products. In return for the Australian conces- 
sions, South Africa agreed to extend its preference to Australian goods. 

The first South African preference, established in 1903, did not 
extend to such articles as butter, fodder, wheat, flour, and meat, 
which formed the principal items of export from Australia to South 
Africa. The South African customs convention of 1906, however, 
included most of these commodities in the preferential schedules, 
and therefore added to the attractiveness to Australia of the. South 
African preference. Moreover, the new South African tariff elimi- 
nated the distinction between refined and unrefined sugar, and thus 
enabled Australian refined sugar to compete on equal terins with the 
raw sugar of Mauritius. 

The imports into Australia from South Africa were trifling in 
amount, rarely exceeding £50,000 per annum, but the annual exports 
from Australia to South Africa were generally in excess of £2,000,000. 
Many of the items upon which Australia agreed to grant a preference 
to South Africa were such as under no conceivable circumstances 
could be expected to figure largely in the imports of Australia from 
South Africa, and it was charged that they were inserted in the 
agreement as "window dressing." Among these items were butter 
and cheese, fodder, hay and chaff, various grains other than maize, 
agricultural and mining machinery, and timber, none of which 
was ever imported, or likely to be imported, in significant amount 
from South Africa. To Australia "the advantage was so prominently 
one-sided that the act was passed through all its stages in one sitting."® 
The disparity between the Australian exports to and imports from 

' Quarterly Review, April, 1905, pp. 569-570. 

8 Turner, H. G.: The First Decade of the Australian Cominonwealth, p. 127. 



AUSTRALIA. . 785 

South Africa is partly to be accounted for by the .fact that vessels 
leaving Australia for South Africa return to Australia by way of 
England, bringing British instead of South African products, but it 
is the absence of a South African export surplus in the products which 
Australia largely imports which makes this triangular trade necessary. 

The preference thus extended to South Africa was made exclusive 
and no other part of the British Empire shared in its benefits. In 
1914 some modifications were made in the agreement with respect 
to tobacco, the amount of the preference being increased slightly. 

TJie ^^ color line^^ in sugar duties. — The ^^color line" drawn with regard 
to the duties on South African sugar was an interesting feature of 
the South African agreement. Cane sugar under the general Aus- 
tralian tariff was dutiable at 6s. per hundredweight, but under the 
agreement with South Africa discrimination was made between sugar 
'^produced solely by white labor'' and sugar ^ ^produced wholly or 
partly by black labor," a preferential rebate of 2s. per hundredweight 
being granted to the former whereas to the latter a rebate of only Is. 
per hundredweight was granted. 

This discrimination was due to the influence of the Labor Party, 
which has always opposed the grant of preference to British colonies 
and possessions that rely upon colored labor for the carrying on of their 
industries. During the debate on the preference resolutions of 
1904, Mr. Watson, the leader of the Labor Party, upon being asked 
whether he would allow India to share in an Australian preference, 
replied: ^^No. Except in regard to such products as tea, I would 
not give any preference to products made by Asiatic labor, which 
would come into competition with the products made by white 
people, though I am prepared to give such a preference to the products 
of the white labor of Great Britain."^ 

NEGOTIATIONS WITH CANADA, 1905-1914. 

Canada in 1898 had granted to New South Wales, as a free-trade 
colony, the benefits of its preference, but shortly afterward New 
South Wales became part of the Australian Commonwealth and sub- 
ject to the protective tariff of Australia, and Canada withdrew the 
preference. The Commonwealth Government 'was asked by Canada 
to enter into negotiations for reciprocal preference. Canada inquired 
whether Australia was prepared to grant a stated preference in return 
for the Canadian preference or would prefer to make a reciprocal 
arrangement a question for consideration by a conference of dele- 
gates of the two countries. Canada meanwhile made a tentative 
offer of its preferential rates in return for tariff concessions in Aus- 
tralia on Canadian fish, lumber, paper, and agricultural implements. 
In November, 1905, the Commonwealth Government replied that they 
were anxious to facilitate any arrangement which would promote 
commerce between Canada and Australia, but that the officers of 
their department of trade found it difficult, without a preliminary 
understanding, to frame a schedule of preferential duties to Canadian 
products, owing to the restricted character of the trade between the 
two countries. They suggested that the approaching colonial con- 
ference would offer a suitable opportunity for negotiations.^^ In 1906 

» Quarterly Review. April, 1905, p. 572. 

10 Canadian Annual Review, 1905, p. 455. Gt. Brit., Pari. Papers, Cd. 3524 (1907), pp. 324, 421. 



786 ■ COLONIAL TAEIFF POLICIES. 

Australia passed an act transferring some agricultural machinery 
from the free to the dutiable list and raising the duty on other articles 
in this group. 

At the colonial conference held in London in 1907 the negotiations 
were resumed by Sir Wilfrid Laurier for Canada, and Sir William 
Lyne, minister of trade and customs in the Commonwealth cabinet 
for Australia. The negotiations were unsuccessful, Australia being 
unwilling to grant any tariff concessions on Canadian agricultural 
imj)lements. Sir William Jjjne some years later, when further ne- 
gotiations were under way, gave the following account of the nego- 
tiations which had taken place in London in 1907: 

I * * * met Sir Wilfrid Laurier in London. He gave me a list of what he 
desired that we should admit free. It comprised all the machinery manufactiu-ed in 
Canada by the Massey-Hams Co.. the International Harvester people, and other 
Canadian firms. These were the articles which Sii' Wilfrid Laurier wanted us to 
allow to be dumped here, to the detriment of our manufactiu'ers. I submitted my 
list of what we could admit, but he would have nothing to do with it. The whole 
kernel of their request was that we should allow their machinery to be admitted 
free to compete with our own people. It was impossible to get any reciprocal trade 
arrangement under those conditions, and that is what is wrong now. The Govern- 
ment may try as much as they like. iDut the only reciprocal tariff they could get with 
Canada would do a great injur}^ to our manufacturers. I should like to see a reciprocal 
aiTangement with Canada, if possible, but we must not smrender the interests of our 
own people to Canada or any other country. I told Sii' Wilfrid Lauiier that if the 
Massey-Harris or the International Harvester people Hked to come to Austraha to 
manufactiu'e, they would be very welcome, but they would have to do the work here 
imder our own tariff, and not in Canada under the Canadian tarift', sending it here to 
compete with oiu' own people. I do not think that it is possible to secm'e reciprocity 
with Canada for some time to come. The Canadians produce little that we really 
require, and we can not afford to allow them to compete with om' local manufacturers.^^ 

The following table presents a comparison, for the principal 
products imported into Australia from Canada, of the rates of duty to 
which they were subject under the Australian tariff acts of 1902 
(1906 for agricultural machinery) and of 1908, respectively. 

Table I. — Australian rates of duty on Canadian products under the tariff acts of 1902 

and- 1908. 



Article. 



Tarifiofl902. i Tariff of 1908. 



Preserved fish, per poiind . 
Barley, per cental 



Agricultural ixaplements, etc., ad valorem. 

Harvesters, each 

Machines and machinery, ad valorem 

Printing paper, ad valorem. 



Undressed timber, per 100 superficial feet Is to Is. 



Id I lid. 

ls.8d I 2s. 

£121 £16. 

30 per cent. 
10 per cent. 
ls.6d.to2s.6d. 



12J per cent . 
Free. 



1 Customs tariff of 1906. 

The rates of duty on items entered in the above table were sub- 
stantially increased by the tariff of 1908. Moreover, the rates of 
duty on agricultural machinery and implements had already been 
increased in 1906. It appears, therefore, that at the time when 
Canada was endeavoring to negotiate an agreement with Austraha 
which would bring about lower duties on Canadian products, Aus- 
tralia, in the interest of her domestic industries, had raised some of 

11 Speech made Dec. 12, 1911, quoted by Pulsford, E., Commerce and the Empire, 1914 and After, p. 138. 



AUSTRALIA. 787 

tlie duties and was contemplating further increases in the duties on 
these same products. This may explain the reluctance of the pro- 
tectionist Government of Australia to make any satisfactory re- 
sponse to the Canadian overtures. 

Canada continued her efforts intermittently until the outbreak of 
the war to secure preference for her products in Australia. Early in 
1914, the Canadian Government, upon learning of the intention of 
Australia to revise its tariff upwards, sent Sir George E. Foster to 
Australia to endeavor to secure the extension of the preference to 
Canada. Before the negotiations could be brought to a successful 
conclusion, the ministry then in power in Australia was defeated, and 
the resumption of negotiations was postponed until the termination 
of the war. The increased Australian duties on Canadian products 
gave rise to considerable irritation in Canada, but, as pointed out in 
1910^^ by Sir William Lyne and by Mr. Andrew Fisher, the prime 
minister of Australia, the products for which Canada especially 
sought preference were of a kind whose manufacture in Australia was 
particularly desired and with regard to which Australia would grant 
no tariff concessions. In Canada it w^sus explained that one of the 
difficulties in the way of successful negotiations was the frequent 
change in ministries in Australia* from 1905 to the outbreak of the 
war in 1914 there were in 4-Ustralia six ministries. But Canada pur- 
chased but little from Australia and therefore had little to offer in re- 
turn for the real concessions she requested. 

NEGOTIATIONS WITH NEW ZEALAND, 1906. 

In 1906, as a result of an interview between Mr. Deakin and Mr. 
Seddon, premier of New Zealand, an understanding was reached 
with respect to a preferential arrangement between Australia and 
New Zealand, and a bill was introduced in the Commonwealth 
Parliament to give effect to the arrangement. The concessions to 
be granted by New Zealand to Australia and by Australia to New 
Zealand were in general on the same articles, but the amounts of 
the preferences were not identical. The agreement specified the rates 
which were to be levied on imports from other countries, and in the 
case of Australia these rates were in a number of cases higher than 
those in effect under the existing tariff. Neither Government was 
to extend the concessions or to lower the rates of duty in the general 
tariff on the articles specified in the agreement without first obtaining 
the consent of the other. 

Many of the items upon which the duties were to be raised by Aus- 
tralia when coming from countries other than New Zealand were 
articles imported mainly from Great Britain and European countries, 
and only in insignificant amounts or not at all from New Zealand. 
Among these were aerated and mineral waters, candles, hops, malt, 
and perfumed soap. The agreement was used in this way to secure 
an increase in a number of the rates of the general tariff, the conces- 
sions to New Zealand with resi)ect to these articles being illusory. 
The provision for increased duties on timber coming into Australia 
from elsewhere than New Zealand, if put into effect, would have 
operated disadvantageously to the trade with Canada. 

" Pulsford, E.: Commerce and the Empire, 1914 and After, p. 139. 



788 COLONIAL TAEIFF POLICIES. 

The CoTTi in on wealth Parliament ultimately approved the agree- 
ment. In New Zealand there was considerable opposition to it on 
the ground that the agreement favored Australia unduly in the 
balance of advantages. A legislative committee appointed to consider 
the agreement recommended that it be not ratified, and the New 
Zealand Parliament refused to ratify it. 

AUSTEALIAK PREFERENCE DISADVANTAGEOUS TO OTHER BRITISH POSSESSIONS. 

The preferential tariff of Australia has been beneficial to the trade 
of the mother country but not to that of the other British posses- 
sions. The establishment of the preference in 1907 and every 
increase in its amount since that year have meant a raising of the 
tariff barrier against the products of British possessions. iGid each 
time that Australia has strengthened the protection of her industries 
against those of other British possessions she has at the same time 
increased the differentials in favor of the British manufactm^ers and 
producers who compete in her markets with Canadian and other 
colonial merchants. In practically no case, except that of jute 
products, has a preferential duty once imposed ever been removed 
or lowered.^^ The British colonies are not great manufacturing 
centers as is Great Britain, but manufactures are developing in some 
of them, and as illustrations of the lines in which there is colonial 
com^petition with Great Britain there may be mentioned the jute 
goods of India and the agricultural implements, printing paper,- 
motor and other vehicles and parts, fish, rubber goods, and furniture 
of Canada. Since, with the exception of the limited preference to 
South Africa, Australia accords to British possessions only the same 
tariff treatment as to foreign countries, the nature of the preference 
enjoyed by the United Kingdom over the colonies needs no separate 
description; but a few figures may be presented to show the extent 
of the trade adversely affected by the Austrahan tariffs of 1908-1911 
and 1914. In 1913 Australia imported from other British posses- 
sions merchandise valued at £7,804,000, and of this £492,000 was 
adversely affected by the preferential tariff then in force. Had the 
tariff of 1914 been in force, £3,261,000 of the 1913 imports from British 
possessions would have been adversely affected. The surcharge on 
these imports as compared with similar imports from the United 
Kingdom would have been at the average rate of 9.46 per cent/^^ 

In establishing a preference on 79 per cent of the imports from the 
United Kingdom, Australia imposed a surtax on 42 per cent of the 
imports from the rest of the British Empire. Table 2 presents in 
summarized form some of the changes made by the tariff of 1914 as 
they affected imports from British possessions. 

13A duty of 10 per cent ad valorem was imposed in 1914 upon all jute products except those of the United 
Kingdom. This dutv was removed in 1917. 
133 Official Yearbook of the Commonwealth of Australia, No. 10 (1917), p. 590. 



AUSTRALIA. 



789 



Table 2. 



■Imports of merchandise from British possessions, 1913, analyzed ac- 
cording to the tariffs of 1908-1911 and 1914. 



Imports from British Possessions. 


According to tariff of— 


1908-1911 


1914 


Free 


£5, 108, 991 
2, 695, 492 


£2, 565, 237 
5,239,246 


Dutiable 






Total imports 


7, 804, 483 

874, 905 

34.53 

32.46 
11.21 


7, 804, 483 

1, 240, 485 

67.12 

23.67 
15 89 


Duty payable. . 


Proportion of dutiable goods 

Average rate of duty on — 

Dutiable imports .- 

All imports . 


percent.. 

do.... 

rin 







CUSTOMS TARIFF (BRITISH PREFERENCE) BILL OF 1906. 

The Australian Government, as has been shown, entered into nego- 
tiations with other portions of the Empire before granting preference 
to Great Britain. The provisions in the agreement with New Zea- 
land, whereby concessions granted to New Zealand were not to be 
extended to any other country, British or foreign, and whereby the 
duties on certain products were to be increased when imported from 
all countries except New Zealand, gave rise to considerable adverse 
comment in Great Britain and elsewhere. On August 30, 1906, Mr. 
Deakin, the prime minister of Australia, submitted for ratification by 
Parliament the New Zealand and South African agreements, and 
introduced a bill providing for a tariff preference to a list of products 
when imported from Great Britain. 

Mr. Deakin explained, in submitting his proposal, that he intro- 
duced it because of the adverse effect which the agreement with New 
Zealand would have on the trade of Great Britain with Australia; 
and that it offered to Great Britain advantages which would more 
than compensate for the increases of duty resulting from the New 
Zealand agreement. ^^ ^'I hope," he declared, ''that the majority of 
the British Parliament will recognize this as something more than 
an offer. It is an overture from us which is not to be regarded as a 
bid, but as a suggestion of friendly negotiation." ^^ 

The bill introduced by Mr. Deakin proposed to grant a preference 
to the products of Great Britain when imported in British ships on 
some 47 tariff items or subitems. The rates of duty on British im- 
ports were to remain the same, but a surtax was to be imposed on 
the articles specified when imported from any other country. The 
amount of the surtax on most of the items was to be 10 per cent ad 
valorem. On one item the surtax was 5 per cent ad valorem and on 
another it was 7 J per cent ad valorem. On 10 items, which were 
subject to specific duty, the surtax was made in each instance a 
specified amount, ranging from 12^ to 25 per cent of the duty to be 
imposed on imports from Great Britain. 

The principal items upon which the measure, if it had become law, 
would have granted preference to British products were furniture; 
gas and oil engines; certain paints and colors; pickles and sauces; 

^' Commonwealth of Australia, Parliamentary Debates, 1906, p. 4451. 
15 The Edinburgh Review, April, 1907, p. 392. 



790 COLONIAL TAEIFF POLICIES. 

cutlery; plated ware; arms and ammunition; miscellaneous manu- 
factures of wicker, bamboo, cane, and wood; bicycles and motor 
cycles; boots and shoes; clocks; phonographs; and optical instruments. 
Many of these articles, particularly boots and shoes, were produced 
in Australia in some quantity, and the free traders in Parliament said 
that the piu-pose of the measure was not so much to give preference 
to British trade as to increase the protection afforded by the tariff 
to Australian industries. They demanded that the preference be 
granted by reductions from the existing duties on British imports and 
not by increases of duty on foreign imports. To this Mr. Deakin 
replied that ^'when we have raised our own tariff to the height it 
ought to reach, I have no doubt that the protectionists will be pre- 
pared to consider proposed reductions in favor of the mother 
country." ^^ Sir William Lyne, the minister of trade and customs 
in the Deakin cabinet, supported this position. ^^In view of the 
fact," he stated, ''that our tariff is not nearly so high as that of the 
United States or Canada, or in some respects as that of South Africa, 
we can not afford to reduce our duties. We can, however, give 
preference to the old country by raising our tariff as against the 
outside world." ^^ 

A critic of the measure, Mr. Joseph Cook, showed in the course of 
the debate that the whole volume of the trade affected was a little 
over £2,250,000 and that the bulk of this trade was already in British 
hands, less than £800,000 coming from foreign countries. This 
foreign trade, he asserted, consisted largely of specialties, or patented 
products, which could Hot be manufactured in the United Kingdom, 
while the British trade consisted of articles in regard to which Great 
Britain already had practically a monopoly and therefore needed no 
preference. ''The proposals of the Government affect the wrong 
items," he concluded, "to facilitate British trade to anv great 
extent. "1^ 

In the course of the debate on the bill in the Australian Parliament 
there was submitted by the Labor members an amendment which 
provided that only goods proved to be made by white British work- 
men should enjoy the advantages of the preferential rates, but this 
amendment was defeated. Another amendment was thereupon 
proposed to the effect that the benefit of the preference should be 
limited to goods brought in British ships manned exclusively by 
white British seamen, but this was likewise defeated, and a third 
amendment, restricting the preference to goods brought in British 
ships of which the crew consisted of at least 80 per cent of white 
British seamen, was also unsuccessful. Finally, in spite of Mr. 
Deakin's plea that the limitations proposed were in violation of 
British treaties to which Australia was subject, a fourth amendment, 
limiting the preference to goods imported direct from Great Britain 
in British ships manned exclusively by white seamen, was passed by 
a majority of 1. 

The Government was opposed to this amendment and the free 
traders also attacked it. Mr. G. H. Reid, the leader of the free 
traders, spoke of the provision limiting the preference to goods 
brought in British ships as "a feature * * * introduced into 

16 Commonwealth of Australia, Parliamentary Debates, 1906, p. 4586. 
" Ibid., p. 4661. 
18 Ibid., p. 4667. 



AUSTBALIA. 791 

our legislation which may well imperil the supremacy of Great 
Britain upon the ocean. "^^ 

At the colonial conference held in London in the following year a 
discussion by Mr. Deakin and Premier Asquith, of Great Britain, 
threw further light on some interesting phases of the reserved bill of 
1906. Mr. Deakin again explained that the bill was intended to 
offset the disadvantages to Great Britain which were expected to 
result from the New Zealand agreement, and that it was not to be 
interpreted as a carrying out of the Australian program with regard 
to preference. The measure, he stated, ^'was not to be confounded 
with proposals for preferential trade even of a unilateral character 
which it was part of our policy to submit. The present bill included 
merelj^ that portion of our preference scheme which was pertinent at 
that time. * * * Neither the time of the session nor the cir- 
cumstances in which our Parliament then stood would have per- 
mitted us to launch a complete preferential scheme^ even unilateral. ^' 
He explained, with regard to the amendments relating to white 
seamen, that in the closing hours of the session it became a question 
of accepting them or of abandoning the whole measure, and that 
he decided to save it. The proposal limiting the preference to goods 
imported in British ships had been inserted in the original measure 
without any suspicion that any treaties by which Australia was 
bound would prevent its adoption. ^^ 

Mr. Asquith subjected the measure to close analysis on the assump- 
tion that it was fairly typical of what iLustralia was prepared to do 
in the way of granting preference to British trade. He showed that 
it would have been of little value to Great Britain, and in his reference 
to the provisions discriminating against British vessels manned by 
colored seamen, he gave some indication that the measure would have 
been disapproved by the imperial authorities even though no treaty 
obligations were in the way. ^'We should never, under any con- 
ceivable circumstances," he declared, ''accej)t here a preference 
granted to us only in reject of goods carried in ships in which the 
whole of our fellow subjects in India were not allowed to serve. 
We could not possibly accede to that, and everybody here would say 
we would rather have no preference at all than preference limited by 
such a condition as that.' ^^ 

BILL RESERVED BY THE GOVERNOR GENERAL, 

The bill as finally passed was reserved by the governor general in 
consequence of the condition which it laid down that, to enjoy the 
preference, goods entitled thereto must be imported in British ships. 
This provision was inconsistent with British treaties with Greece, 
Italy, Japan, and Russia, by which some or all of the Australian 
colonies were bound, which provided that no higher duties should be 
imposed on goods brought in vessels of the treaty country than on 
goods brought in British vessels. 

A British board of trade memorandum submitted to the colonial 
conference of 1907 estimated that the Australian proposal for prefer- 
ence to the British products, if it had come into effect, and if the 
limitation with regard to the nationality of the vessel were not 

19 Ibid., p. 5290. ^ Gt. Brit., Pari. Papers, Cd. 3523, p. 260, 21 ibid., p. 315, 



792 COLONIAL TARIFF POLICIES. 

enforced, would have applied to about 8 per cent of the Australian 
imports of United Kingdom products and to a little over 4 per cent 
of the total Australian imports from all countries.^^ 

It should be noted that the surtaxes were to be applied not only to 
foreign imports, but to imports from Great Britain not brought in 
British vessels manned exclusively by white seamen and to imports 
from all other parts of the British Empire. As there are few British 
freight vessels sailing to Oceania which are manned exclusively by 
white seamen, this limitation would in practice have considerably 
restricted the value of the preference to British trade. 

THE COLONIAL CONFERENCE OF 1907. 

At the colonial conference of 1907 a determined effort was made by 
the colonial representatives to induce the British Government to 
accept the principle of preference, but in 1906 the Liberal Party had 
carried the election by an overwhelming majority with the fiscal 
policy as the leading issue; the principle of preference in England 
was closely tied up with the policy of protection ; and the representa- 
tives of the British Government at the conference, including Premier 
Asquith, Mr. Winston Churchill, and Mr. Lloyd George, refused to 
give any support to the policy of preference. 

Mr. Deakin, the prime minister of Australia, was most prominent 
in the attempts to persuade the British Government to grant prefer- 
ences on imports from the colonies. He pointed out that Australia 
had strong reasons for asking preference in Great Britain. In the 
Commonwealth the production of the staple products increased faster 
than the population, which was quite inadequate to absorb more 
than a portion of the primary goods produced. External markets 
were therefore essential. Though Germany and France might be 
willing to take the wool and ores of Australia, prohibitory tariff 
duties and restrictions in the guise of sanitary regulations, he asserted, 
excluded its meat, dairy produce, and cereals; it was, therefore, to 
the British market that Australia naturally turned. All the Domin- 
ions, he said, found themselves in the same position, and, to prove 
that there was ample margin for an expansion of Australian produc- 
tion, if the United Kingdom would grant a preference to colonial 
products, he quoted figures showing that of a total importation into 
the United Kingdom of grain, meat, dairy produce, and fruit, valued 
at £210,000,000, British countries supplied only about £51,000,000. 

Mr. Deakin and Sir William Lyne drew attention to the relative 
decrease in the share of Great Britain in Australia's imports. They 
said that preference in Australia for British goods would remedy 
this situation. With regard to the form which the preference could 
take, Mr. Deakin stated that Australia might grant preference either 
by lowering existing duties in favor of Great Britain or by increasing 
the duties on foreign products. The immediate object of preference, 
in any case, would be to exclude foreign goods and to favor British 
goods, and this, he thought, could be best achieved by increasing the 
present duties on foreign goods. Also goods on the free list might 
be made dutiable when coming from foreign countries. A substantial 

22 Colonial conference, 1907, Gt. Brit. Pari. Papers, Cd. 3524, pp. 319 et seq. 



AUSTRALIA. 793 

preference to British goods in Australia would, he thought, result in 
an increase by 50 per cent of the British trade with Australia. ^^ 

Mr. Deakin and Mr. Lyne both made it clear, however, that no 
such scheme of preference as they had outlined would be established 
unless Great Britain reciprocated. ^^The evidence of the last two 
general elections of the Commonwealth," said Mr. Deakin, ''proves 
that we are moving steadily toward such a preference or such prefer- 
ences as I have referred to, but we have not yet propounded a com- 
plete scheme of any of these on either basis; that is to say, neither 
as a one-sided preference tendered by ourselves nor still less of the 
possibilities of a preference balanced by concessions from you. Our 
hope of an early reciprocity from the mother country has never been 
strong enough to encourage such a thorough study of possible tariff 
changes as would be necessary in drawing up proposals for a complete 
schem-e."2* 

On another occasion he stated that ''the extent to which we can 
approach a complete mutual exchange will, of course, be governed by 
the attitude which is adopted here towards our proposals." ^^ 

The British representatives replied that the colonies, although left 
perfectly free to decide their own fiscal policies for themselves, were 
endeavoring to induce Great Britain to abandon the fiscal policy 
which had been uniformly followed for half a century and which had 
just received a striking affirmation in a general election. They 
declared that the British Government could not discriminate between 
the trade of the colonies and that of foreign countries. 

RESOLUTION SUBMITTED BY MR. DEAKIN FOR INTERCOLONIAL PREFERENCE. 

Mr. Deakin submitted to the conference, in addition to the resolu- 
tions adopted at the conference of 1902, a resolution reading as 
follows : 

That it is desirable that the preferential treatment accorded by the colonies to the 
products and manufactures of the United Kingdom be also granted to the products 
and manufactures of other self-governing colonies.^*^ 

Mr. Deakin, in discussing this resolution, spoke as follows: 

Owing to the similarity of our circumstances, none of these could have the scope or 
the value of an arrangement made between any or all of them and the mother country 
if such were possible. But, nevertheless, small as these imperial reciprocities may 
be, they are useful. ^^^ 

This resolution was never put to a vote, but it is interesting to note 
that the policy of Australia with regard to preference, both before 
.and after 1907, has been less in harmony with the principle embodied 
in the resolution than the corresponding policy of any other portion 
of the Empire. Every measure of preference granted or proposed 
by Australia has been restricted to the particular portion of the Empire 
under consideration at the moment, and there has been no instance 
in the history of the preferential pohcy in Australia of the extension 
to one portion of the Empire of a preference which had originally 
been granted to another. 

23 Ibid., p. 257. 

!M Ibid., p. 259. 

25 Ibid., p. 262. 

2fl Colonial conference, 1907. Gt. Brit., Pari. Papers, Cd. 3337, pp. 6, 7. 

» Colonial conference, 1907, Gt. Brit., Pari. Papers, Cd. 3523, p. 258. 



794 COLONIAL TARIFF POLICIES. 

II. Establishment of Preferences, 1907-8, and Their Exten- 
sion, 1911-1917. 

preference TO BRITISH PRODUCTS ESTABLISHED IN 1907. 

Preference to the products of the United Kingdom came into force 
provisionally on August 9, 1907, when a bill for the revision of the 
tariff was introduced in Parliament. This bill, after undergoing 
some amendment, became the tariff law of June 3, 1908. It was 
subjected to long and searching debate, but no new arguments with 
respect to the preference were advanced. 

The tariff introduced in 1907 involved a complete revision of the 
tariff of 1902 and made provision for an all-round substantial in- 
crease in the level of duties. The number of dutiable items was in- 
creased from 139 in the tariff of 1902 to 444 in the new tariff, and 
on products dutiable under the old tariff the rates of duty in the new 
tariff were generally higher. Preference was granted to imports 
from the United Kingdom on about half of the dutiable items, the 
amount of preference approximating on most of the items 5 per cent 
ad valorem. About one-third of all imports and about 60 per cent" 
of the imports from the United Kingdom were admitted at the 
preferential rates. ^^ But the duties on a large number of the most 
important items on which preference was granted were substantially 
increased in the new measure, and on almost every item the new tariff, 
even after the preference was deducted, subjected British goods to 
higher duties than were previously in effect. 

The preference of 1907 was granted ^'avowedly as a mere intima- 
tion of the willingness of Australia to negotiate with Great Britain 
for other and larger preferences, on reciprocal terms. ^'^^ Sir William 
Lyne, in the course of the debate, expressed regret ''that Great Britain 
caii not see her way clear to give us some preference. When I was 
in Great Britain/' he said to the house, ''I took the opportunity to 
say that although we did not receive the concession that we asked for, 
or any other concession, still Australia did not intend to approach 
this question again from the point of view of bargaining. "^^ Never- 
theless, the course of the debate showed that the Government had 
not given up hope of seeming a reciprocal preference from Great 
Britain, and that the grant of preference was due partly to the belief 
that such action would promote a change of policy on the part of the 
British Government. 

THE EXTENT OF THE PREFERENCE. 

Table 3, giving the average ad valorem rates of duty on British 
imports by principal groups under the tariff of 1908 as compared with 
the tariff of 1902, shows that the principal classes of British imports 
were taxed at higher rates under the preferential schedule of the 1908 
tariff than under the nonpreferential 1902 tariff. Some groups of 
minor importance are omitted. 

28 Official Yearbook of the Commonwealth of Australia, 1916, p. 576. Table III, p. 34, shows that even 
after the amount of the preferences had been increased by the tariff amendment of 1911, the average prefer- 
ence upon British goods worked out in 1913 at only 5.14 per cent ad valorem. As the total imports from 
Great Britain in 1907 were only about £25,000,000, the estimate of the treasurer. Sir William Lyne, that the 
grant ofpreference to products of the United Kangdom would result in an annualloss of £2,500,000 inrevenue 
to the Commonwealth was much too high. 

29 Wise, B. R,: The Commonwealth of Australia, 1909, p. 253. 

30 Turner, H. G.: The First Decade of the Australian Conjmonwealth, p. 170. 



AUSTRALIA. 



795 



Table 3. 



Average rates of duty by principal groups on British goods under the tariffs of 
1902 and 1908, and imports from the United Kingdom, 1907. 



Group. 



Apparel, textiles, and manufactured fibers 

Metals, manufactured, including machinery ... 

Paper and stationery 

Drugs, chemicals, and fertilizers 

Jewelry, timepieces, and fancy goods 

Foodstuffs of vegetable origin and salt 

Leather and manufactures of, and India rubber and manu- 
factures of 

Earthenware, cements, china, glass, andstoneware 

Paints and varnishes 

Foodstufls of animal origin 

Oils, fats, and waxes 

Animal substances mainly unmanufactured, not foodstufl's. 

Opticalinstruments and scientific instruments , 

Wood and wicker, raw and manufactured 

Miscellaneous 



Average ad valorem 
rates of duty. 



Tariff of 

1902— All 

goods. 



Total lor all groups enumerated . 



Per cent. 

11.91 

7.14 

7.02 

4.49 

21.09 

20.26 

11.69 
19.67 
10.63 
23.24 
21.. 33 
4.85 
11.08 
14. 48 



Tariff of 

1908— 
Products 
or manu- 
factures of 
the United 
Kingdom. 



Per cent. 

13.16 

9.30 

8.19 

4.78 

21.33 

24. 89 

15.63 
20.16 
16.45 
24.90 
22.40 
6.12 
5.62 
21.33 



Imports from United 
Kingdom, 1907. 



Total. 



Thousand 

pounds 

sterling. 

9,901 

6,768 

1,199 

838 

517 

493 

414 
399 
364 
178 
164 
156 
152 
149 
2,497 



25, 189 



Articles 

entitled to 

preference 

under 

tariff 

of 1908. 



Ttiousand 

pounds 

sterling. 

8,780 

4,462 

519 

68 

517 

245 

204 

348 

123 
U 
25 

114 
69 

108 
1,434 



17, 038 



Over 90 per cent of the total Australian imports from Great Britain, 
dutiable and nondutiable, are included in the groups enumerated in 
the preceding table. In every instance, with but one exception, the 
rates of duty on British goods under the 1908 tariff, in spite of the 
preferential reductions, averaged higher than under the 1902 tariff. 

The new tariff contained over 70 items and subitems which were 
free of duty when coming from the United Kingdom, but were 
dutiable when imported from any other country. The rate of duty 
on goods of non-British origin in this group w^as generally 5 per cent 
ad valorem, the exceptions being a specific duty of 20 shillings per ton 
on salt of non-Britisn origin and an ad valorem duty of 10 per cent 
on w^ooden-last blocks, rough turned. Most of the items included 
in this group had been free of dut}^ from all sources under the 1902 
tariff; but there were a few items, of which cotton goods were the 
most important, which remained dutiable at 5 per cent ad valorem 
as under the tariff of 1902, but were now made free of duty when of 
United Kingdom origin. 

The preferences granted on articles subject to specific duties ranged 
from 12 per cent to 50 per cent of the general duties, but in most 
cases they approximated 20 per- cent of the general duties. The 
preferences granted on articles subject to ad valorem duties were in 
most cases 5 per cent ad valorem. Of the 15 exceptions, there was 
one case of a preference of 74 per cent ad valorem and there were 10 
instances of a preference of 10 per cent ad valorem. Most of the 
articles upon which a 10 per cent ad valorem preference was granted 
were specialties in which Great Britain had only a small share of the 
trade. 

The increased duties on British imports caused considerable irrita- 
tion in Great Britain. The Coventry and Birmingham Chambers of 



-22- 



-51 



796 



COLONIAL TABIFF POLICIES. 



Commerce even went to the length of protesting to the British Board 
of Trade against what they considered the unreasonable increases in 
duty. The advantage to British trade of the preference incorporated 
in the new tariff was generally estimated as not sufficient to offset 
the disadvantage resulting from the higher duties. ^'The price he 
[the British manufacturer] pays for his advantage over the foreigner," 
stated the Economist, ^^ ''is an increase in his disability as against the 
native Australian." 

In Australia the increased duties on British imports were justified 
on the ground that the industries of Australia must receive first con- 
sideration, and that only after they had been duly protected should 
preference be given to British as against foreign trade. One Aus- 
tralian wT-iter states the position of the Australian Government as 
follows -p 

The best support to the Empire is the strengthening of its component parts, and 
Austraha will be a more valuable impeiial asset when the tariff has made her self- 
contained than if, under free trade, she produced only raw materials. The interests 
of the Empire may best be served by decentralizing its manufacturing power. 

In this view Mr. Deakin and his party in 1907 dehberately readjusted the tariff for 
the preservation and encouragement of Austrahan industries, even against British 
competition; but, at the same time, preferential treatment was accorded to several 
important Hnes of British goods in order to give an advantage over competing foreign 
goods. 

TARIFF AMENDMENT OF 1911. 

The customs tariff act of 1911 introduced a number of amendments 
in the tariff. Many of the changes were only reclassifications or more 
explicit definitions of items in the tariff, but there were a number of 
increases in rates of duty. New preferences, amounting generally 
to 5 per cent ad valorem, were extended to over 20 items, some of 
them of considerable importance, which had been subject to uniform 
duties under the tariff oi 1908. 

Table 4. — Principal changes affecting the preference made by the customs tariff amend- 
ment of 1911. 





Rates under tariff of 1908. 


Rates as amended in 1911. 


Article. 


General. 


On products 
of United 
Kingdom. 


General. 


On products 
of United 
Kingdom. 


Fruits and vegetables, preserved, dozen quarts.. 
Dynamo electric machines up to 200 horsepower, 

induction coils, electric fans, ad valorem. 
Dynamo electric machines over 200 horsepower, 

ad valorem. 

Electroliers, gas fittings, etc., ad valorem 

Arc lam.p carbons, ad valorem 


?s 

20 per cent . . 

12| per cent. 

20 per cent . . 
5 per cent . . . 
15 per cent . . 

Free 

do 

30 per cent . . 
Free 

25 per cent . . 

20 per cent . . 
25 per cent . . 
10 per cent. . 


3s... 


5s . 


4s. 


20 per cent . . 

12iper cent. 

20 per cent . . 

Free 

15 per cent . . 

Free 

do 

.30 ner cent . . 
Free 


25 per cent . . 

17§ per cent. 

30 per cent . . 
10 per cent . . 
20 per cent . . 

5 per cent . . . 

25 per cent . . 

40 per cent . . 
5 per cent . . . 

30 per cent . . 

do 

do...... 

Free 


20 per cent. 

12J per cent. 

25 per cent. 
Free. 


Fire and glazed bricks; fire-clay manufactures; 

asphalt tiles, etc., ad valorem. 
Tubes, rods, retorts, etc., of resistant glass, ad 

valorem. 
Bottles, fancy ground or cut glass, empty, ad 

valorem. 

Marble and granite, wrought, ad valorem 

Gramaphones, phonographs, and accessories, 

ad valorem. 
Leather cut into shape, harness, razor strops, 

whins, ad valorem. 

Yachts, launches, and boats, ad valorem 

Articles of an advertising character, ad valorem. 
Last blocks, rough turned, ad valorem = . 


15 per cent. 

Free. 

20 per cent. 

35 per cent. 
Free. 


25 per cent . . 

20 per cent . . 
25 per cent . . 
Free 


25 per cent. 

do. 
do. 
Free. 







31 The Economist (London), Aug. 17, 1907. 32 Wise, B. R.: The Commonwealth of Australia, p. 250. 



AUSTRALIA. 797 

The preference on last rough-turned blocks, which was the only 
instance in the 1908 tariff of a 10 per cent ad valorem preference 
through total remission ' of duty on British imports, was eliminated 
by the act of 1911, The preference on arc lamp carbons vfas increased, 
however, so as to make them free of duty when of British origin and 
subject to 10 per cent when of foreign origin. There were no aboli- 
tions of preference other than that on last blocks above mentioned. 

It will be noted that in .every case where there was established a 
new preference, the new preferential rate was as high as, or higher 
than, the old general rate. The new preferences were established in 
some cases by increasing the duty on foreign imports ; in other cases 
by transferring the article when of foreign origin from the free to the 
dutiable list. There was no instance in the entire list of the remission 
or reduction of an existing duty on an article of British origin in order 
to establish a preference. The act, nevertheless, brought a sub- 
stantial increase of preference to British imports. 

TARIFF REVISION OF 1914-1917. 

The Commonwealth Government introduced on December 3 
1914,^^ a new tariff as part of a tax program intended to raise more 
revenue to meet the war requirements. The new tariff immediately 
went into effect provisionally, and was validated by the Customs 
Tariff Validation Act, 1917. '^The tariff act of 1917 may be con- 
sidered primarily as a war measure intended to provide sufficient 
revenue to cover a part of the war expenditures.'' ^* The Govern- 
ment conceded that it was a temporary measure and discouraged 
discussion of it. 

The new tariff was marked by considerable increases in the rates 
of duty and by a substantial increase in the preference to the prod- 
ucts of the United Kingdom. The increase in the preference took 
three forms: (1) Some goods formerly free from all countries were 
subjected to new duties under the general tariff, but continued to be 
free if imported from Great Britain; (2) some goods formerly dutiable 
at uniform rates from all countries were subjected by the new tariff 
to increased duties under the general tariff, the duties on imports from 
the United Kingdom remaining unaltered or being subjected to 
smaller increases; (3) increases were made in the rates of the general 
tariff on goods already entering at preferential rates when of United 
Kingdom origin, while the preferential rates continued unaltered or 
were not increased to the same extent. 

There Were no instances of the establishment of a new preference 
or the increase of an existing one through the reduction of the duty 
on imports from the United Kingdom. The following table, taken 
from the official Yearbook of the Commonwealth of Australia,^^ 
presents an official analysis of the character of the changes in the 
British preference made by the tariff of 1914: 

83 The Customs Tariff Validation Act otl9l7iaa<ielaw thetariff proposals introduced in the Commonwealth 
Parliament in 1914, but with two minor exceptions. All changes in the tariff provisionally made in 1914 
provided for increased rates of duty, with the exception of reductions made on two unimportant items, 
iron shafting and unwrought white marble. The Commonwealth Parliament insisted that these rates 
be increased before it would consent to "validate" the new tariff. 

8^ U. S. Department of Commerce, Tariff Series, No. 37, Customs Tariff of Australia, p. 5. 

ss No. IG (1917), p. 589. 



798 



COLONIAL TAEIFF POLICIES. 



Table 5. — Summarized com-parison of the tariffs of 1908-1911 and 1914-1917, hosed upon 
their application to the produce or manufacture of the United Kingdom imported into 
the Commonwealth during 1913. 





Tariff of 1908- 
1911. 


Tariff of 1914- 
1917. 


Imports of free merchandise: 

Favored bv preferential tarilT 


£7,485,367 
£12,409,650 


£12,4&5,947 
£7 175 452 


Under tariff common to all countries 






Tntal imports of free T7ierchandise . . 


£19,895,017 
48.59 


£19 661 399 


Percentage of free imports on total imports 

Imports of dutiable merchandise: 

Favored by preferential tariff 

Under tariff common to all cotmtries 


48.01 


£17,500,941 
1 £3,552,845 


£20,044.501 
1 £1,242; 903 


Total imDort'! of dutiable merchandise . . 


£21,053,786 
51.41 


£21,287,404 
51.99 









Total imports of merchandise 

Total imports favored by preferential tariff 

Total imports favored bj^ preferential tariff— per cent of total imports 

Margin of preference— per cent of total value of preferential imports 

Equivalent ad valorem rates of duty: 

On totalimports of merchandise per cent. 

On imports of merchandise, less drink and tobacco do... 

On dutiable merchandise do... 

On dutiable merchandise, less drink and tobacco do. . . 



£40,948,803 

£24,986,308 

61.01 

5.14 

14. 20 

9.71 

27.62 

19.53 



£40,948,803 

£32,530,448 

79. 42 

6.30 

16.77 
11.88 
32.26 
23.62 



1 Includes tobacco to the value of £23,154 imported in competition with similar imports from South 
Afi'iea, which is favored by prefgrential rates under the South African Preference Act. 

It is to be noted that the tariff of 1914, while it made little change 
in the quantity of imports of United Kingdom origin not subject 
to dut}^, almost doubled the amount of such imports which were 
admitted free only because of the preference. The proportion of 
British imports favored by the preferential tariff, based on the 
figures of imports for 1913, increased from 61 per cent of the total 
imports from the United Kingdom under the old tariff to 79 per cent 
under the new. The preference to products of the United Kingdom 
was equal to 6.3 per cent of the value of the total imports of United 
Kingdom goods favored by preference under the new tariff as 
compared to 5.14 per cent under the old. Stated in another way, 
on the basis of the 1913 imports, ^4f the same goods were imported 
from countries other than the United Kingdom, £2,050,000 additional 
duty would now be charged, whereas under the 1908-1911 tariff the 
rebate of duty would have been £1,280,000." ^^ 

MIXOR AMENDMENTS IN TARIFF RATES, 1917. 

The anticipation of a decrease in the customs revenues as a result 
of the war-time prohibition on the import of many luxuries forced 
the Commonwealth Government to resort to additional revenue- 
raising measures in 1917. These took the form of increases in the 
customs and excise taxes on wines and spirits. These changes have 
no bearing on British preference. The same measure, however, 
provided for the uniform free admission of jute products, which, - 
under the tariff of 1914-1917, were free of duty when of United 
Kingdom origin but dutiable at 10 per cent ad valorem w^hen im- 
ported from any other source. India alone competes seriously in 



36 Official Yearbook of the Commonwealth of Austraha, No. 10 (1917), pp. 588, 589. 



AUSTRALIA. 799 

Australia with Great Britain in the trade in jute products. The 
removal of the duty on Indian products of this character enables 
India to compete on equal terms with the products of Great Britain. 
In order to take advantage of the provision in the United States 
tariff act of 1913 for the free admission of wheat and wheat products 
w^hen imported from countries which grant like treatment to American 
wheat and w^heat products, the duties were removed, in 1917, on 
wheat, wheat flour, and semolina. 

III. Preference Augmented by Recent Tariff Legislation. 

TARIFF OF 1920. 

The Australian Government on November 1, 1919,^^ prohibited by 
proclamation the importation of a number of articles w^ith a view to 
giving similar Australian products complete protection pending the 
preparation of a new tarift' measure.^^ The list of articles subject to 
restriction was made up largely of products of industries created or 
expanded during the war. 

The new tariff bill was introduced in the House of Representatives 
on March 24, 1920, and in accordance with Australian custom became 
immediately effective. This tariff, during the process of legislative 
validation in 1921, has been amplified, and the protective and pref- 
erential rates have been increased. Full details, however, are not 
at hand, and the following description is based on the rates made 
temporarily effective in 1920. 

In introducing the tariff bill Mr. W. Massy Greene, minister for 
trade and customs, stated that '4t will protect industries born during 
tjie war, will encourage others that are desirable, and will diversify 
and extend existing industries." Its chief features are the increase 
in protection to Australian goods, the introduction of an intermediate 
tariff to be applied to countries offering reciprocal advantages to 
Australian goods, and the further extension of preference to British 
manufactures. 

The new tariff marks a substantial increase in protection over fts 
predecessors. Some of the largest increases are in the textile and 
metal schedules. Additional protection also has been given to 
chemical products, such as coal tar and its derivatives, and alcohol. 

The tariff establishes 95 new duties, all of them on articles formerly 
imported free from the United Kingdom. In addition, rates applying 
to goods imported from the United Kingdom are generally higher than 
under the preceding tariff, 'though the preference which they enjoy 
over foreign goods admitted under the general tariff is greater in most 
cases than before." ^^ 

EXTENT OF THE PREFERENCE TO GREAT BRITAIN. 

Under the new measure Great Britain enjoys a preference of 20 
per cent ad valorem in the case of 32 items of the tariff, 15 per cent 
in the case of 136 items, and 10 per cent in the case of 367 items. 
The following table, comparing the number of preferences in the 
tariff of 1908-1911 and that of 1914-1917 with the present tariff, 
indicates the extent of the increase in preferences to Great Britain. 

37 The import prohibitions were withdrawn on May 19, 1920. 
3s Commerce Reports, May 3, 1920, p. 688. 

89 Statement made in the British House of Commons on June 21, 1920, by Sir Robert S. Home, president 
of the Board of Trade. 



800 coLOXixU:. tariff policies. 

Table 6. — Comjmrison of preferences in Australian tariffs sijice 1908} 

i 1908-1911 \ 191i-1917 i 1920 

Preferences. I tariff '] tariff ] tariff 

I items. 1 items. ! items. 

— — 1 I ■ . 

5 per cent ; 237 i 303 j 2i 

7i percent ' 4 | 3 ' 

lOpercent ; 10 i 120 i 367 

12J per cent ' ■ 24 

15 per cent I 138 

20 per cent j 32 

Total preferential rates | 2511 428 583 



1 Common vvealth of Australia, Parliamentary Debates, first session, 1920, p. 711. 

In extending the preference to Great Britain the Australian Gov- 
ernment did not ask for a quid yro quo. The minister for trade and 
customs made it clear, however, that something in return was ex- 
pected. ^' While we are quite willing to accord this large measure of 
protection to British industry, and give assistance to our kinsmen 
overseas/' he stated, '^I believe that that policy can not go on forever 
without reciprocity. I am very pleased to note that recently the 
British Parliament have made a start in the way of reciprocal relations 
with the Dominions. I hope it is only a beginning, and that the 
statesmen of Britain will see their way clear to recognize in some more 
substantial way than they have up to the present the value of recip- 
rocal trade relationship which we are endeavoring to strengthen in 
the proposals now before us. 

^^I admit there are peculiar difficulties surrounding the position of 
Great Britain; but, still, a start has been made, which I hope is the 
beginning of better things. As I say, while the Commonwealth 
Government do not ask for a quid fro quo, the present position, as 
I have said, can not exist for all time." *^ 

The British preferential rates, either in whole or in part, may for 
reciprocal concessions be extended to other British Dominions. 

THE ixter:mediate tariff. 

A novel feature of the new measure is the intermediate tariff and 
the narrow restriction upon its grant. This may be applied to goods 
from countries which agree to trade reciprocity with Australia, but 
the minister for trade and customs is precluded from entering into 
negotiations for such reciprocity '^if he is satisfied that the economic 
conditions — and this applies both to the Dominions of the British 
Crown and to other countries — in such Dominion or other country are 
substantially lower than those prevailing in Australia." 

The Melbourne Age (Mar. 25, 1920), commenting on this provision 
of the measure, suggests that no country outside of one or two of the 
British Dominions, except America, can take advantage of the reci- 
procity provision. 

In general, intermediate tariff rates are midway ^^ between the 
British preferential and the general tariff rates, although in many 
cases they are identical v/ith the former or the latter. This variety 

*o Commonwealth of Australia, Parliamentary Debates, first session, 1920, p. 712. 
^1 On a considerable number of items there is adifference^of 10 per cent between the general and the pref- 
erential rates, while the difference between the intermediate rate and each of the other two is 5 per cent. 



AU3TBALIA. 



801 



of practice may be illustrated from the first three items of the tariff, 
thus: 



Items 



1. Ale, spirituous, in bulk per gallon . 

2. Ale, nonspirituous, ad valorem per cent . 

3. Spirits— Brandy per gallon . 




All trade agreements are subject to ratification by the Common- 
wealth Parliament. 



DEFERRED DUTIES. 



Another feature of the Australian tariff which is included for the 
first time is the deferred duty,*^ which is to become operative at a 
future date; thus, for example, under item 136 of the new tariff the 
duties on iron and steel (D), plate and sheet (plain), up to and includ- 
ing one-sixteenth of an inch in thickness, under the preferential tariff ^ 
the intermediate tariff, and the general tariff, are, respectively, free, 
5 per cent, and 10 per cent; but on and after January 1, 1922, the 
rates will be, respectively, per ton 65s., 82s,, 6d., and 100s. Similarly, 
under item 171 (B), the rates on reapers and binders as fixed under 
the three schedules were to be, respectively, free, 5 per cent, and 10 
per cent, but on and after January 1, 1921, the rates were to be, on 
each machine, £6 10s,, £9 10s., and £10, respectively, or ad valorem 
30 per cent, 40 per cent, and 45 per cent, respectively, whichever 
rate yields the higher duty. These deferred duties, of which there 
are 22, are to be found mainly in the metals and machinery provisions 
of the tariff, and the purpose is to furnish protection to industries 
which are not jet able to supply the needs of the Commonwealth, but 
which give promise of being able to do so at an early date.^^ The 
imposition of these deferred duties may be delayed beyond the dates 
indicated in the tariff at the discretion of the minister, who is ex- 
pected to be guided by the progress made in the establishment of the 
industries.*^ 

PENALTY FOE, DUMPING. 

The new tariff also places a penalty upon dumping by author- 
izing " an addition to the ordinary duty payable of an amount equal 
to the difference between the fair market value of the same article 
when sold for home consumption in the usual and ordinary course 
of trade and free on board in the country whence and at the time it 

''2 Commonwealth of Australia, Parliamentary Debates, first session, 1920, p.714. 

•«3 Mr. Greene stated, in introducing the tariff bill, that there was "very strong evidence of a desire on 
the part of big enterprises in Britain and elsewhere to establish industries in Australia. * * * I am 
glad to be able to say that it is principally from Britain that most of these proposals have come/' (Ibid., 
pp. 715,716.) 

^-i According to Mr. Mark Sheldon, trade commissioner in New York City for the Commonwealth of 
Australia, the operation of the deferred duties has been postponed in the case of the following conamodities, 
item 136 (D, 2, and F), plain plate and sheet, and hoop iron and steel, deferred from Jan. 1, 1921, to Jan. 1: 
1922; item 171 (A., C, and D), horse hayrakes, mowers, and metal parts thereof, postponed from Jan. 1, 1921, 
to July 1, 1921; item 278 (A), carbonate and bicarbonate of soda, and item 388, metal cordage, postponed 
from Jan. 1, 1921, to Jan. 1, 1922; and item 397 (D), sporting powder, wads for cartridges, percussion caps, 
cartridges for military purposes, detonators, empty cartridge cases capped or uncapped, fuse cotton and 
electrical mining fuse, postponed from July 1, 1920, to Jan. 1, 1922. The deferred duties, other than the 
above, will come into force on the dates specified in the tariff. (Commerce Reports, Mar. 5, 1921, p. 1266.) 



802 COLONIAL TARIFF POLICIES. 

y\-as exported to Australia, and the duniped price, except in cases 
where the difference amounts to 5 per cent or less."^^ (See p. 809.) 

SUBSIDIZED FOREIGN VESSELS PENALIZED. 

The new measure provides for the imposition of a special tax upon 
goods carried by subsidized foreign vessels.*^ This may be consid- 
ered as adding preferences to British goods.*^ 

._ PREFERENTIAL IMPORT RESTRICTIONS. 

In the course of the war, in order to conserve shipping space and 
to check the consumption of luxuries, import restrictions, partial or 
complete, were imposed in Australia on a great variety of products. 
In many cases exemptions from the restrictions were granted to 
British imports. To som^e extent this was due to the fact that, 
because a large proportion of the Australian exports went to Great 
Britain, return freight space from that country was available. But 
the desire to grant preference to British trade was an important 
factor in determining the policy of the Commonwealth with regard 
to import restrictions. Similar preference was shown w^ith regard to 
exports, shipments of wool, for instance, being prohibited except to 
Great Britain. 

Since the armistice all of the import restrictions hpvve been removed. 
By proclamation of February 25, 1919, however, the importation of 
all dyes except those of British origin was prohibited except by 
special permission from the minister for trade and customs.*^ 

lY. Preferential Features of Customs Administrative Laws. 

PROVISIONS INTENDED TO SAFEGUARD BRITISH PREFERENCE AGAINST 

ABUSE. 

Section 6 of the customs tariff act of 1908 provided that the prefer- 
ential rates should apply " only to goods, the produce or manufacture 
of the United Kingdom, w^hich are shipped in the United KiDgdom 
to Australia and not transshipped, or if transshipped, then only if 
it is proved * h? * that the goods have not, since they were 
shipped in the United Kingdom, been subjected to any process of 
manufacture." 

Until 1911 the Australian customs authorities granted the prefer- 
ential rates to goods imported from Great Britain if they were 
satisfied that at least 25 per cent of their value was represented by 
British labor utilized in their production, even though the goods 
were finished elsewhere than in Great Britain. By provisions which 
came into operation from September 1, 1911, and which were intended 
to prevent any abuse of the liberal interpretation by the Common- 
wealth of the term '^ produce or manufacture of the United King- 
dom," it was required that goods only partially produced or manu- 
factured in the United Kingdom, to be entitled to the preference (1) 
must have undergone the final process or processes of manufacture 
in the United Kingdom, and (2) must have involved, in their pro- 
duction, an expenditure in material of British production, or in 

'■■' Commonwealth of Australia, Parlianxentary Debates, first session, 1920, p. 714. 

« ibid. 

4' Melbourne Age, Mar. 25, 1920. 

<? Board of Trade Journal, Mar. 20, 1919, p. 392. 



AUSTRALIA. 803 

British labor, amounting to not less, for each article, than one-fourth 
of the factory or works cost of such article in its finished state. 
Goods are admitted under the preferential tariff if the whole of the 
manufacturing processes have been performed in the United King- 
dom, even though the proportion of value of British labor is less 
than the minimum prescribed for goods only partially manufactured 
in the United Kingdom. 

The following items are specified as properly included under the 
heading of labor: (1) Kaw materials of purely British origin; (2) 
manufacturing wages; (3) factory expenses, including proportion of 
fuel, supervision, etc.; (4) inside containers. The following items 
may not be included as labor: (1) Foreign material entering into 
the composition of the goods; (2) outside packages; (3) packing 
expenses; (4) manufacturer's or exporter's profit or profit of brokers, 
or agents dealing in the article in its finished, manufactured state; 
(5) carriage, insurance, etc., from place of production; (6) oversea 
freight and insurance; (7) dock dues; and (8) agent's or other charges 
for or after exportation.^^ Goods to be entitled to the preference 
''must be shipped from the United Kingdom direct to Australia.'' 
Goods which, after shipment from the United Kingdom, have been 
transshipped at any port outside the United Kingdom may, however, 
still enter at the preferential rates, if they ''have not entered into 
the commerce of or been subjected to any process of manufacture 
in any other country," and if the transshipment has been solely for 
the purpose of the carriage of the goods to their destination.^^ 

CUSTOMS REGULATIONS DISCRIMINATE IN FAVOR OF CANADA. 

Section 154 (a) of the customs act, 1901-1916, provides that 
*'¥7hen any duty is imposed according to value, the value shall be 
taken to be the fair market value ^°^ of the goods in the principal mar- 
kets of the country whence the same were exported in the usual and 
ordinary commercial acceptance of the term and free on board at 
the port of export in such country, and a further addition of 10 per 
cent on such market value." Some of the regulations promulgated 
in the administration of this provision operate to favor the trade of 
Canada in its competition with the United States. 

Inland carriage is included in the value upon which duties are 
based. When the goods are shipped from the country where pur- 
chased, the whole inland carriage is included. When the goods are 
bought in one country and shipped from a contiguous country, the 
general rule is that there shall be included in the value for duty 
only the cost of inland freight to the frontier of the country in which 
the goods are purchased. "If goods are shipped from Chicago to 
Canada for transshipment at Vancouver, duty is chargeable only 
on the cost of inland freight from Chicago to the nearest point on 
the Canadian border. If, on the other hand, goods are shipped from 
Chicago to San Francisco, duty is leviable on the whole amount of 
inland freight from Chicago to San Francisco. "'^^ This provision 

« Australia, Dept. of Trade and Custoras, Customs Tariffs, 1908, 1911, and 1914, Melbourne, 1915, pp. 97 
et seq. 

60 Ibid. 

50a By a ruling of Sept; 28, 1921, from the fair market value maybe deducted any import or excise 
duties paid upon the goods in the form in which they were exported. (Commerce Reports, Oct. 31, 1921.) 

61 Statement of comptroller general of Australian Department of Trade and Customs, U. S. Commerce 
Reports, Apr. 16, 1915, p. 279. 



804 COLOIs^IAL TARIFF POLICIES. 

favors the use of Canadian railways and ports by American shippers, 
where the freight cost between the point of purchase and the Ameri- 
can port exceeds the freight cost between the point of purchase and 
the nearest point on the Canadian border by an amount sufhcient 
to make an appreciable difference for customs valuation. 

The reverse, however, does not hold true. By a special regulation, 
goods imported from Canada via Vancouver are treated for duty pur- 
poses as if shipped from New York; i. e., duty on freight charges is 
levied only on what the charges would be from the place of manufac- 
ture to the nearest border station en route to New York. In the case 
of a shipment to Australia from the eastern part of the United States 
through an American port on the Pacific coast, the entire amount of 
inland freight would be included in the dutiable value.^^ In the case 
of a shipment to Australia from Montreal by way of Vancouver, 
there is added for customs valuation only the freight charges from 
Montreal to the nearest border station en route to New York, even 
though the shipment does not take that route. 

EXCHANGE REGULATIONS. 

A customs decision of January 17, 1918, declared that for the dura- 
tion of the war and for a period of six months following, the basis for 
assessment of duty should be the home consumption value at date 
of invoice and not at date of export, as provided in the customs regu- 
lations.^^ On May 16, 1919, however, the High Court of Australia 
decided that the valuation at the date of export was the only legal 
basis for customs purposes.^^ 

During 1919 and 1920 several attempts were made by the depart- 
ment of trade and customs to adjust the assessment of duties on 
importations from countries with depreciated currencies. Finally, it 
sought to effect its purposes by legislation and succeeded in obtaining 
the passage of the customs act (No. 41) of 1920, which came into 
effect on November 12. It provided that — 

When the bank rate of exchange of any country is more than 10 per cent below the 
mint par rate of exchange, the minister shall refer to the board (Commonwealth Board 
of Trade) the question whether the bank rate of exchange should be used as the basis 
of the computation of the value for duty of goods imported fi'om that country. (Sect, 
L57a [1].) 

Shortly after the passage of the act a decision of the Common- 
wealth High Court made the use of the bank rate compulsory in con- 
verting all foreign currencies, whether above or below par. As^ a 
result of the court's decision, this provision of the law imposes a dis- 
advantage upon the United States and other countries which enjoy 
a favorable rate of exchange with Australia. 

An interesting feature of the law is its novel provision for pre- 
venting dumping by exchange regulations. The act provides that 
if goods from foreign countries are being offered in Australia '*at 
prices below the fair market value for home consumption at the date 
of shipment 'of similar goods in the United Kingdom to Australia'; 

52 TJ. S. Dept. of Commerce, Daily Consular and Trade Reports, May 2, 19QC; and Tariff Series, No. 37, 
Customs Tariff of Australia, pp. 16, 17. 

53 Board of Trade Journal, Jan. 17, 1918, p. 80. 
5^ Ibid., July 31, 1919, p. 151. 



AUSTKALIA. 805 

such goods may, on recommendation of the board of trade, be assessed 
for duty at the mint par rate of exchange/'' 

The effect of this act was to make legal the customs decision that 
the value of goods, particularly from France, Italy, Belgium, and 
Czechoslovakia, was to be computed at the current bank rate of 
exchange.^® 

V. Tariffs of Australia's Dependencies. 

Situated in the neighborhood of Australia are a number of islands 
which are governed by Australia as dependencies. All of these have 
their own tariffs, and only in some minor instances does Australia 
grant to or receive from these dependencies preferential treatment 
in respect to customs duties. 

PAPUA (BRITISH NEW GUINEA). 

Papua, or British New Guinea, is the southeastern portion of the 
island of New Guinea," which lies north of Australia, in the South 
Pacific Ocean. Its area is 90,540 square miles, and the population 
is estimated at 250,000. It has been governed since September 1, 
1906, as a dependency of the Commonwealth of Australia, Prior 
to that date it was governed b}^ Great Britain as a Crown colony, 
but in association with Queensland. 

Papua has a separate tariff, and in general the rates of this tariff 
are uniform without respect to the origin of the imports. There are, 
however, two minor preferences ^^ to Australian products — Aus- 
tralian wines, since 1911, and Australian tobacco, since 1914, being- 
admitted at preferential rates. The tariff rates on wines and tobacco 
in the present Papuan tariff are as follows : 

s. d. 

Wine, sparkling. gallon . . 15 . . 

Wine, Australian , do 5 . . 

Wine, not elsewhere included: 

(i) Containing not more tlian 40 per cent of proof spirit do ... . 10 . . 

(2) Containing more than 40 per cent of proof spirit do ... . 17 . . 

Tobacco, trade: 

(1) Entirely grown and manufactured in Australia pound . . 2 3 

(2) Made in Australia from imported leaf do 2 6 

(3) Not elsewhere included .do , . . . 3 . . 

NORFOLK ISLAND. 

Norfolk Island is a small island, 8,500 acres in area, located 930 
miles northeast of Sydney. The inhabitants, about 900 in numbery 
are descendants of British sailors and Tahitian women. By a Com- 
monwealth act of 1913, which came into effect on July 1, '1914^ the 
island was taken over as a territory of the Comm.onwealth/'^ 

Norfolk Island has a separate tariff, containing only a fev/ rates. 
The only preference ^^ in the tariff is on Australian tobacco. Manu- 
factured and unr£« C'.nuf actured Australian leaf tobacco pays 2 shillings 
a pound, whereas other leaf tobacco pays 3 shiUings a pound. 

65 The text of the act may be found in the Board of Trade Journal; Dec, 9, 1920. 

56 Ibid., Nov. 18, 1920, p. 611. 

^7 And oritiyine: islands wdth an area of 2,754 square miles. 

^sBnts?:^ o- 359. 

59 From 1844 to 1855 the island v/as annexed to Tasmania . From 1856 to 1897 it was governed a? a distinct 
and separate settlement under the jurisdiction of New South Wales. In 1897 it was made a dependency 
under the governor of Nev/ South Wales. 

6" But seep, 63. 



806 COLO^^IAL TARIFF POLICIES. 

NEW GUINEA (MANDATED TERRITORY). 

The former German portion of New Guinea, together with the Bis- 
marck Archipelago and the Solomon Islands, has been assigned to 
Australia as mandated territory. They are treated in the appendix 
to the chapter on German colonies, under the heading '' Present status 
of former German colonies and of other mandated territories." 

PREFERENCE TO PRODUCTS GROWN BY BRITISH SETTLERS IN THE NEW 

HEBRIDES. 

The New Hebrides are a group of about 80 islands, with a total 
area of approximately 5,000 square miles, situated 1,000 miles north 
of New Zealand, in the South Pacific Ocean. Europeans first began 
to settle in the islands in the seventies, and disputes soon arose 
between Great Britain and France as to jurisdiction within the group. 
In 1888 a convention was entered into between the two countries 
which placed the islands under the control of a joint naval commis- 
sion, consisting of naval officers of both pov/ers. This method of 
control continued until February 28, 1906, when a convention was 
signed at London providing for a condominium, or system of dual 
administration, by France and Great Britain. 

The principal product of the islands is copra, but maize (Indian corn) 
is commonly grown by the settler of small capital to tide him over the 
period during which the coconut trees are maturing. Since 1901 the 
French settlers in the New Hebrides have enjoyed preferential treat- 
ment for their maize and certain other products in France and in New 
Caledonia. ^^ The British settlers export their maize almost wholly to 
Australia, where it is subject to a high duty. 

In the British House of Commons on February 19, 1907, a member 
stated that the Australian tariff was limiting the number of British 
settlers in the New Hebrides and retarding the development of British 
interests, and asked whether, ^'in the event of further representations 
being made by the Australian Government with a view to Australian 
predominance in the New Hebrides, His Majesty's Government wiU 
endeavor to persuade the Australian Government to encourage British 
settlement by offering a free market in the Commonwealth to British 
m.erchandise exported from the islands." To this the undersecretary 
for the colonies replied that the Australian Government was about 
to submit to the Commonwealth Parliament tariff proposals which 
would be designed to minimize the disabilities under which British 
settlers in the New Hebrides were then laboring.^^ 

At the colonial conference of 1907 Mr. Deakin stated, in reference 
to this discussion, that Australia had asked the imperial authorities 
in February, 1907, whether it could give preference to New Hebrides 
maize and had been informed that such action would conflict with 
treaty obligations. He pointed out that Australia subsidized steamers 
which served the British settlers and that in return the freight rates 
on maize had been lowered by 75 per cent. 

No provision has been found in the Australian tariff laws for a 
preference to New Hebrides products. The statement is often made 

61 Seep. 222. 

62 Commonweaith of Australia, Parliamentary Debates, Feb. 19, 1907, p. 708. 



AUSTRALIA. 807 

in official papers, however, that half the Australian duty on maize, 
which is now 2s. per cental, is remitted when the maize is grown by 
British settlers in the New Hebrides.®^ 

The statement has also been made that there is an arrangement 
between the Commonwealth of Australia and the British planters in 
New Hebrides whereby Australia grants a subsidy of £4 per ton on 
imports of British-grown coffee from the New Hebrides.^^ 

In March, 1915, the Commonwealth Government appointed a 
commission to investigate the trade relations of Australia and the 
New Hebrides. This commission recommended, among other things, 
that the whole of the Australian import duty on maize grown in New 
Hebrides be remitted.*^^ In the Nev/ Hebrides there is a tariff in 
which 10 per cent ad valorem is the prevailing rate upon imports.''" 

VI. Summary. 

Before the adoption by Great Britain of the policy of free trade the 
Australian colonies enjoyed preferential treatment for their products 
in Great Britain and were required to grant in return tariff preference 
to British imports. But after the adoption of the free- trade policy, 
the Australian colonies were not permitted to impose differential 
duties on foreign imports or to establish differential duties in favor of 
each other. This restriction continued until the federation of the 
Australian colonies in the Commonwealth, in 1901. 

The constitutional act authorizing federation provided for free 
trade among the States of the Commonwealth but otherwise left 
Australia free to determine its own tariff policy. British goods 
received the same tariff treatment as products of foreign countries 
until 1907, when Australia, following the lead of other British 
Dominions, established preference in favor of the imports from the 
mother country. The preference was granted on about half of the 
dutiable items in the tariff of 1907-8, and amounted in most cases 
approximately to 5 per cent ad valorem. It affected about one-third 
of all imports and about 60 per cent of the imports from the United 
Kingdom. 

The preference to Great Britain was increased in 1911 by the 
extension of the preferential rates to over 20 items which under the 
tariff of 1907-8 had been subject to uniform duties. In the tariff of 
1914 a further increase of preference to British products was made. 
Some goods formerly free from all countries were subjected to new 
duties under the general tariff but continued to be free if imported 
from Great Britain; some goods formerly dutiable at uniform rates 
from all countries were subjected to increased duties under the 
general tariff, the duties on imports from the United Kingdom 
remaining unaltered or being subjected to smaller increases; and 
goods formerly dutiable under the general tariff but entering at 
preferential rates when of United Kingdom origin were subjected to 
increased duties under the general tariff, while the preferential rates 

«3 Of., e. g., Appendices to the Report of the (Australian) Royal Commission on Mail Services and Trade 
Development between Australia and the New Hebrides, Australia Papers, 1915-16, No. 213, p. 20; also 
Interstate Commission of Australia, Report on British and Australian Trade in the South Pacific, April, 
1918, p. 40. 

"Interstate Commission of Australia, op. cit., p. 40. 

«5 Report of Royal Commission on Mail Services and Trade Development between Australia and the 
New Hebrides, 1915, p. 29. 

*« See seetion on the New Hebrides in the chapter on the Colonial Tariff Policy of France, p. 221. 



808 



COLOI^IAL TARIFF POLICIES. 



continued unaltered or were not increased to the same extent, v The 
preference, based on the figures of imports for 1913, was equal to 6.3 
per cent of the value of the total imports of United Kingdom goods 
favored by the preference and affected 79 per cent of the total imports 
from the United Kingdom. 

The tariff of 1920 marked a substantial increase in protection over 
its predecessors, but also granted a marked increase in the preference 
to imports from the United Kingdom. It established 95 new duties, 
all of them on articles formerly imported free from the United King- 
dom, and increased the rates both of the general and preferential 
tariffs, but the preference which British goods enjoy over foreign 
goods is greater in most cases than before. The following tabular 
statement strikirigly illustrates the increases of preferences in the 
new tariff over those in force in 1911 and 1914: 



Preference. 


1911 
tariff 

items. 


1914 
tariff 
items. 


1920 
tariff 
items. 


5 per cent 


237 
4 
10 


303 
3 

120 


24 


7h per cent . . . . 




10 per cent . 


367 


12i per cent 


24 








136 


20 per cent - . . . . 






32 












Total all rates 


251 


426 


583 







Australia in granting preference to the mother country took care 
that the grant of preference should not result in injury to any Aus- 
tralian industry. In practically ever;^ instance in which a preference 
was granted the grant was made hj increasing the duties on foreign 
products, not by reducing them on imports from Great Britain, and 
as a rule British goods after each extension or increase of the prefer- 
ence have paid higher duties than before. Australia has also made 
it plain that, while the preference was granted gratis, something in 
return was expected. Indeed, the grant of preference was made 
partly in the belief that such action would cause the mother country 
to change its policy and grant reciprocal preference to Dominion 
products. 

Australia has carried on negotiations for reciprocal preference with 
Canada, New Zealand, and British South Africa, but only in the case 
of South Africa w^ere the negotiations successful. Canada and Aus- 
tralia were never able to come to an agreement owing, principally, to 
the fact that the products for which Canada especially sought prefer- 
ence were of a kind whose manufacture in Australia was particularly 
desired and with regard to which Australia would grant no tarift con- 
cessions. With New Zealand a trade agreement was negotiated in 
1906, which agreement was ratified by the Australian Parliament but 
rejected by the Parliament of New Zealand. The agreement mth 
South Africa was entered into in 1906. Under the agreement Aus- 
tralia receives the benefit of the preferential tariff of South Africa 
and grants in return a reduction in duties, amounting in most cases 
to 25 per cent less than the rates imposed by the customs tariff of 
1902 on imports of a specified list of South African products. 



AUSTRALIA, 809 

The Australian tariff of 1920 contains an intermediate schedule of 
rates between the British preferential tariff and the general tariff 
and authorizes the Government to extend these rates to countries 
which agree to trade reciprocity with Australia. British Dominions 
may negotiate for these rates, but the minister for trade and customs 
is precluded from entering into negotiations for such reciprocity ''if 
he is satisfied that the economic conditions — and this applies both to 
the Dominions of the British Crown and to other countries — in such 
Dominion or other country are substantially lower than those pre- 
vailing in Australia." The Melbourne Age suggests that no country 
outside of one or two of the British Dominions, except America, can 
take advantage of the reciprocity provision. 

It is interesting to note that, while Australia has urged at colonial 
conferences that the preferences accorded by the colonies to the 
mother country be also granted to other self-governing Dominions, 
its policy has been less in harmony with this principle than the corre- 
sponding policy of any other portion of the Empire. Every measure 
of preference granted or proposed by Australia has been restricted to 
the particular portion of the Empire under consideration at the 
moment and there has been no instance in the history of the prefer- 
ential policy in Australia of the extension to one portion of the Empire 
of a preference which had originally been granted to another. 

(BihliograpJiy on page 832,) 

Addendum. 

Proposed A nU'Dum'ping Legislation.— On July 6, 1921, the Australian Minister of Customs submitted a 
series of resolutions in the House of Representatives defining not only the ordinary dumping (i. e., anti- 
dumping) duty, but also a dumpmg below cost duty, a dumping consignment duty, a dumping freight 
duty, a dumping exchange duty, a dumpLag preference duty, and a dumped material duty. These duties 
are to fall on foreign products which compete with Australian products and which are to be specified from 
time to time in the Commonwealth Gazette. The below cost duty and the consignment dtity will be equal 
to the difference between a reasonable price and, respectively, the export price, and the wholesale price in 
Australia of consigned goods. The freight duty is fixed at l> per cent of the fair market value at date of ship- 
ment and is applicable to imports which for any reason are charged with less than the prevailing rate of 
freight. The exchange duty is based on a sliding scale by v%-hich the rate is 8J- per cent when francs or lire 
stand in the London market at the date of export at 30 and up to -35 to the pound sterling; 40| per cent 
when they stand at 70 to 75; 50 per cent, at 100 to 105: and 68 per cent, at 200 to 205. A similar scale is 
established for marks, starting at 10 per cent and reaching a maximum of 75 per cent when marks stand 
at or over 240 to the pound sterling. The preference dumping duty is to be levied on goods of a kind pro- 
duced in the United Kingdom but exported from a country whose currency is depreciated as compared 
to the pound sterling, and the rate is to be the difference between the fair market value f. o. b. in the United 
Kingdom and the export price in the other country. The dumped material duty is to be levied on goods 
produced in a foreign country from raw materials obtained from another country whose currency is depre- 
ciated, and the rate is to be the difference in the price of sale, and that at which the goods could have been 
sold, at a reasonable profit, had they been made of materials of iocai origin, (Melbourne Age, July 7, 1921.) 



Chapter XVIII. 
PREFERENCE IN GREAT BRITAIN SINCE 1914. 



CONTENTS. 



Pa§e. 
War-time movement for imperial prefer- 
ence: 
Effect of the war on British tariff 

sentiment 810 

Changes in the composition of the 

cabmet 810 

The Paris economic pact 812 

The committee on commercial and m- 

dustrial poUcy after the war 812 

The imperial war conference, 1917 813 

Final report of the committee on com- 
mercial and industrial policj^ 813 

Statements by British officials with 

■regard to imperial preference 814 

Great Britain withdraws from the 

Brussels sugar convention 815 

The coahtion'mamf esto 815 

The establishment of preferences: 

Tariff act of 1919 816 

The terms of the preference 817 



Page. 
II. The establishment of preferences— Con. 
Tariff Actof 1919— Con. 

Discussion in Parliament 819 

Extended to products of 

mandated territories 820 

The possibility of retaliation. . 822 
The administration of the pref- 
erence 823 

Protection to British in dustries. . . 824 
Value of the preference to the 

colonies 824 

Preferential import restrictions 825 

The Sankey judgment 827 

Antidumping and ''key" industries. 827 
Preference under law to protect dye- 
stuffs industry 829 

German reparation recovery act 829 

III. Summary.... 831 

Bibhography 832 



I. War-Time Movement for Imperial Preference. 

EFFECT OF THE WAR ON BRITISH TARIFF SENTIMENT. 

During the war there was an active movement in Great Britain 
toward a modification of the traditional free- trade pohcy of that 
country. The causes for this change of sentiment differed widely 
in different groups, as did also the modifications that were suggested. 
But opinion was distinctly strengthened that the Dominions, which 
had for some time been granting preference to British imports and 
which had responded so generously to Great Britain's call for 
military assistance, should be given a preference in the tariff of the 
mother country. 

It is difficult to characterize accurately a contemporary political 
movement; the safest method is to chronicle and summarize outstand- 
ing events and the chief pronouncements favorable to the formal 
adoption of a new fiscal policy, A sentiment favorable to protection, 
accopapanied by preference to the colonies, was reflected in the press 
and in the speeches of public men soon after the outbreak of the war, 
but it was not until early in 1916 that steps toward a change in 
Government policy were taken. 



CHANGES IN THE COMPOSITION OF THE CABINET. 

At the outbreak of the war a Liberal cabinet, definitely committed 

to free trade, was in office, and the Liberal Party, in cooperation with 

the Labor members and the Irish Nationalists, controlled the House 

of Commons; but in the middle of 1915, in order to secure in Parlia- 

810 



GREAT BRITAIN SINCE 1914. 



811 



ment united support of the Government's war program, a coalition 
cabinet was formed by the inclusion of a number of Unionists and a 
Labor member. The change in the composition of the cabinet and 
the increasing influence of Unionists in the House of Commons led 
to a more favorable attitude in Parliament toward suggestions of 
industrial protection and colonial preference. 

On January 10, 1916, Mr, W. A. S. Hewins ^ moved in the House 
of Commons that the Government oonsult with the Governments of 
the Dominions '^in order to bring the whole economic strength of the 
Empire into cooperation with our Allies in a policy directed against 
the enemy." In explaining the motion Mr. Hewins showed that 
what he particularly had in mind was the development of a plan for 
the imperial control of the mineral and other resources of the Empire. 
The motion was carried without a division and among those who 
spoke for it were many members who had always been known as 
free-traders. 

Early in 1916 the directors of the Manchester Chamber of Com- 
merce, an old stronghold of free trade, proposed to the members 
that a vote be taken upon a resolution affirming the principle of free 
trade. To their surprise, the motion was rejected by a great ma- 
jority, and upon the resignation of the directors, a new council 
favorable to protection was elected. 

On May 25, 1916, the council of the London Chamber of Commerce 
adopted a program for a graded tariff imposing different rates, in an 
ascending scale, upon products of British Empire countries, Allies, 
neutrals, and enemy countries.^ It is to be noted that in this 
proposal the grant of preference to the colonies over and above the 
favorable treatment given to the Allies was to be small in amount 
and was to be conditional upon the grant of equivalent preference by 
the colonies to Great Britain. 



Suggested tariff adopted hij the council of the London Chamber of Commerce, May 25, 1916. 
[Rates of duties under tentative tariff.] 





Enemy 
countries. 


Neutrals. 


Ames. 


British Em- 
pire countries. 


(a) Wholly manufactured goods 


30 per cent 

ad valorem . 
15 per cent 

ad valorem. 
7-|- per cent 

ad valorem. 
5 per cent 

ad valorem. 

Free 

War rates 

plus 50 per 

cent. 


20 per cent 

ad valorem. 
10 per cent 

ad valorem. 
5 per cent 

ad valorem. 
2.V per cent 

ad valorem. 
Free 


10 per cent 
ad valorem. 

5 per cent 
ad valorem. 

2* per cent 
ad valorem . 

Free 

do 


10 per cent 


(6) Semimanufactured goods and articles used 

solely as raw materials, 
(c) Foodstuffs, manufactured ... 


ad valorem.« 
5 per cent 
ad valorem.a 
2h per cent 


(d) Foodstuffs, raw.. . . . 


ad valorem.a 
Free. 




Do. 


(/) Wines, spirits, beer, tobacco, and other 
articles now subject to duty. 


War rates . . . 


War rates . . . 


War rates. 



a Subject to any rebate equivalent to preference accorded goods from the United Kingdom. 
Note.— Should any neutral country accord a tariff preference to any other country, a surtax equivalent 
to the preference to be imposed on goods imported into the United Kingdom. 



' Parliamentary Under-Secretary of State for the Colonies, 1917-1919. 

2 The proposed'tariff is contained in the Cobden Club Pamphlet, The New Protectionism, by J. A. Hob- 
son, p. 153. 



185766°— 22- 



-52 



812 COLONIAL TARIFF POLICIES. 

THE PARIS ECONOMIC PACT. 

From June 14 to 17, 1916, representatives of all the allied countries 
met at the Paris economic conference. The mihtary situation of the 
AUies was critical, reports of the economic organization of a Mittel- 
europa were rife, and the Allies were considering economic warfare 
as a means of reinforcing their military program. Resolutions for 
permanent measures of economic alliance among the Allies were 
adopted with the object of malting them independent of the Central 
Powers in raw materials, finance, commerce, and shipping. A 
period of time was to be fixed by agreement during which the com- 
merce of the enemy powers should be especially penalized. The 
resolutions adopted were couched in careful language and committed 
the signatories, publicly at least, to no definite measures, but their 
fulfillment could not well be accomplished without resort to pro- 
tective tariffs. Mr. Asquith, in announcing the results of the confer- 
ence, stated that Sir G. E. Foster for Canada and Mr. W. M. Hughes 
for Australia had subscribed to the resolutions. 

The first coalition cabinet was still predominantly liberal in char- 
acter, however, and Mr. Asquith continued as prime minister. But 
in December, 1916, Mr. Lloyd George demanded that a war cabinet 
consisting of himself, Mr. Arthur Henderson, a Labor member, Lord 
Curzon and Mr. A. Bonar Law, both Unionists, be charged with the 
conduct of the war. This demand led to the resignation of Mr. 
Asquith, and to the construction of a second coalition cabinet, with 
Mr. Lloyd George as prime minister, and a majority of Unionists in 
the ministry. 

THE COMMITTEE ON COMMEECIAL AND INDUSTRIAL POLICY AFTER 

THE WAR. 

On July 19, 1916, an official committee was appointed in Great 
Britain — 

to consider the commercial and industrial policy to be adopted after the war, with 
special reference to the conclusions reached at the economic conference of the Allies, 
and to the following questions: (1) What industries are essential to the futui'e safety 
of the nation, and what steps should be taken to maintain or estabKsh them; (2) what 
steps should be taken to recover home and foreign trade lost during the war and to 
secure new markets; (3) to what extent and by what means the resources of the Empire 
should and can be developed; and (4) to what extent and by what means the sources 
of supply within the Empire can be prevented from falling under foreign control. 

In March, 1917, in an interim report, the committee supported the 
policy of preference in the following terms : 

1. In the light of experience gained during the war, we consider that special steps 
must be taken to stimulate the production of foodstuffs, raw materials, and manu- 
factured articles within the Empire wherever the expansion of production is possible 
and economically desirable for the safety and welfare of the Empire as a whole. 

2. We therefore recommend that H. M. Government should now declare their 
adherence to the principle that preference should be accorded to the products and 
manufactures of the British overseas dominions in respect of any customs duties now 
or hereafter to be imposed on imports into the United Kingdom, 

3. Further, it will, in our opinion, be necessary to take into early consideration, as 
one of the methods of achie-\dng the above objects, the desirability of establishing a 
wider range of customs duties which would be remitted or reduced on the products 
and manufactures of the Empire and which would form the basis of commercial 
treaties with allied and neutral powers. ^ 

3 Gt. Brit., Pari. Papers. Resolutions adopted bv the Committee on Commercial and Industrial 
Policy after the War. Cd. 8482, Loudon, 1917. 



GREAT BRITAIN SINCE 1914. 813 



Several weeks later the imperial war conference of 1917 indorsed 
the principle of preference, in the following resolution which had 
previously been approved by the imperial war cabinet : 

The time has arrived when all possible encouragement should be given to the devel- 
opment of imperial resources, and especially to making the Empire independent of 
other countries in respect of food supplies, raw materials, and essential industries. 
With these objects in view this conference expresses itself in favor of the principle 
that each part of the Empire, having due regard to the interests of our Allies, shall 
give specially favorable treatment and facilities to the produce and manufactures of 
other parts of the Empire.* 

On April 27, 1917, Mr. Lloyd George declared that in his opinion 
a system of preference could be established without involving the 
taxation of food. ^'We believe it can be done without that," he 
stated, '^and, of course, when food is at its scarcest and dearest, that 
is not the time to talk about additional burdens upon it." Mr. 
Bonar Law, on the same day, made the statement that *Hhe reso- 
lution of the recent imperial conference does not involve the taxa- 
tion of food."^ 

FINAL REPORT OF THE COMMITTEE ON COMMERCIAL AND INDUSTRIAL 

POLICY. 

On February 2, 1918, the Final Report of the Committee on Com- 
mercial and Industrial Policy after the War was submitted.* A ma- 
jority of the committee recommended that a serious attempt should 
be made to meet the declared wishes of the Dominions and colonies 
and of India for the readjustment and development of their economic 
relations with the United Kingdom. It considered the proposal that 
a comprehensive tariff scheme covering the whole range of imports 
into the United Kingdom be adopted and that it should provide 
for the free importation of essential foodstuffs and '^ absolutely raw" 
materials, for the imposition of moderate duties on all other com- 
modities, and for the preferential reduction or the remission of these 
duties on imports from the British colonies, The committee how- 
ever presented its reasons for believing that so comprehensive an 
establishment of protective duties would operate injuriously to Brit- 
ish commerce and industry, and it recommended that protective 
duties should be established only after thorough examination of each 
industry requesting protection, with careful consideration of its im- 
portance to British industry in general, and of the effect of the 
protective duties on British export and transit trade. 

The report pointed out that any tariff which could serve for the 
establishment of a considerable measure of preference in the British 
market to the products of the Dominions would have to be extended 
to a wide range of foodstuffs and possibly even rav/ materials. It 
directed attention, therefore, to the expediency of considering 
measures of imperial preference other than the imposition of differen- 
tial customs duties as, for example. Government contracts to purchase 
for a term of years at guaranteed minimum prices part or all of the 

< Gt. Brit., Pari. Papers. Imperial War Conference, 1917. Cd. 8566, London, 1917. » 
6 Quoted by J. M. Robertson, The New Tariflism, p. 31. 

9 Gt. Brit., Pari. Papers. Final Report of the Committee oa Commercial and Industrial Policy after 
the War. Cd. 9035, London, 1918. 



814 COLONIAL TAEIFF POLICIES. 

coionial output of materials of great industrial importance, or finan- 
cial assistance from the Imperial Government toward the develop- 
ment of colonial resources. 

The report summarized its conclusions with regard to preference 
in the follov\dng statement, which, it is to be noted, corresponds 
closely to the resolution of the colonial conference of 1902: 

4. Preferential treatment should be accorded to the British overseas dominions 
and possessions in respect of any customs duties now, or hereafter to be, imposed in 
the United Kingdom, and consideration should be given to the expediency of other 
forms of imperial preference. 

STATEMENTS BY BRITISH OFFICIALS WITH REGARD TO IMPERIAL PREF- 
ERENCE. 

In the latter half of 1918 the numerous resolutions in support of 
preference to the colonies passed by governmental committees and 
public bodies were followed by pronouncements by members of the 
cabinet, chiefly Unionists, indicating a readiness on the part of the 
Government, when normal conditions returned, to carry out these 
recommendations. 

On July 24, 1918, Mr, Walter Long, then colonial secretary, stated 
that the committee which had been appointed by the war cabinet 
to consider the question of trade within the Empire after the war 
had decided on a scheme adopting preference within the Empire, 
and that the plan had met with the approval of the war cabinet, and, 
he trusted, w^ould be approved b}^ the Empire as a whole,"^ 

On July 29, 1918, Mr. Bonar Law, then chancellor of the exchequer, 
stated in the House of Commons that the Governrnxcnt had decided 
to adopt the policy of imperial preference after the war, and that 
there would be a preference in duties as well as in transportation. 
The preference would not involve a tax on food. ''AH that has 
happened," he said, ''is that this Government has put itself into 
line with the other Governments of the Dominions in accepting this 
principle. " The preference would conform to the resolutions 
subscribed to at the colonial conference by all except the British 
Government to the efi^ect that preference should be granted in Great 
Britain on any existing duties and on any duties which should 
subsequently be imposed. He denied that the policy of preference 
was in conflict with the League of Nations principle.^ 

On July 30, 1918, Mr. Bonar Law stated to a deputation of manu- 
facturers that the principle of preference had been adopted by the 
Government and that one of the principal advantages to be derived 
from the policy would be that the colonies would cooperate in 
reserving the raw materials of the Empire for the Empire.^ 

Premier Borden of Canada had made a statement dissociating 
Canada from any part in the form_ulation by the imperial war con- 
ference and the imperial war cabinet of the fiscal policy of Great 
Britain.^*^ Questioned on this point in the House on August 1, 1918, 
Mr. Bonar Law replied that the decisions of the British Government 
had been reached independently of the colonial representatives, and 

' The Times (London), July 25, 1918. 

* House of Commons, Parliamentary Debates, vol. 109, No. 89, p. 40. 

8 Manchester Guardian, Aug. 2, 1918. 

10 But see p. 816. 



GREAT BRITAIN SINGE 1914. 815 

the question of the fiscal pohcy to be adopted, whether by the 
United Kingdom or by the Dominions, must be settled by each 
independently.^^ 

GREAT BRITAIN WITHDRAWS FROM THE BRUSSELS SUGAR CONVENTION 

In September, 1918, the British Government withdrew absolutely 
from all obligations ^^ with regard to the Brussels convention, offering 
the following explanation : 

His Majesty's Government have now approved the principle of giving preference to 
Empire sugar, although in so doing they will have careful regard to the interests of 
their Allies and particularly to the necessity of aiding those who have suffered special 
economic injury from the ravages of war. 

They have decided, therefore, to liberate themselves absolutely from all engage- 
ments toward the signatory powers of the international sugar convention. His Maj- 
esty's minister at Havre has accordingly been instructed to approach the Belgian 
Government and request them to inform the powers concerned that His Majesty's 
Government have decided to resume complete liberty of action in regard to all sugar 
questions, and that they now give the requisite six month's notice to that effect, in 
accordance with their undertaking when they withdrew from the convention. ^-^ 

Although the coalition government was carrying out the policy of 
the previous Liberal government in withdrawing from the convention, 
the motives in the two cases were altogether different. The Liberals 
had opposed the convention because they believed it prevented 
British manufacturers from getting cheap sugar. The coalition 
government opposed the convention because it obligated Great 
Britain not to establish a preference in favor of colonial sugar. 

THE COALITION MANIFESTO. 

A manifesto issued November 21, 1918, by Mr. Lloyd George and 
Mr. Bonar Law prior to the approaching election, set forth the coali- 
tion program on imperial preference as follows : 

It will be the fundamental object of the coalition to promote the unity and develop- 
ment of our Empire and of the nations of which it is composed , to preserve for them 
the position and influence and authority which they have gained by their sacrifices 
and efforts in the cause of human liberty and progress, and to bring into being such 
conditions of living for the inhabitants of the British Isles as will secure plenty and 
opportunity for all. 

Until the country has returned to normal industrial conditions it would be prema- 
ture to prescribe a fiscal policy intended for permanence. We must endeavor to re- 
duce the war debt in such a manner as may inflict the least injury to industry and 
credit. 

"See, 'however, p. 816. 

'2 Ln the election campaign of 1905-6 the Liberal Party pledged itself, if successful at the polls, to denounce 
the Brussels sugar convention at the earliest opportunity on the ground that it was in violation of tlie prin- 
ciples of free trade. The convention bound the signatories until Sept. 1,1908. Thereafter any party 
to the convention could withdraw after giving one year's notice. Soon after the victory of the Liberals in 
the general election, chambers of commerce and other representative bodies throughout the Empire, but 
especially in the sugar-growing colonies, sent in petitions to the new government requesting that Great 
Britain protect the colonial cane-sugar industries by giving its continued support to the convention. 

After prolonged negotiations with the other parties to the convention, Great Britain agreed to remain in 
tho convention, which was modified to leave her free to import bounty-fed sugar without imposing any 
special duty, but she was not to reexport products made of bount3'--fed sugar to any of the convention coun- 
tries. Russia, the only bounty-giving country of any consequence which had not entered the Convention 
in 1902, became a party to it in this year with the reservation that she was to be left free to continue her 
bounty system, but was to limit her annual exports of sugar after 1909 to 200,000 tons. 

In 1912'this revised convention v/as to terminate, and this time, because of opposition to it by free traders 
and by manufacturers who wished again to have boimty sugar. Great Britain withdrew^ from all obligations 
under the convention as from Sept. 1 , 1913. Great Britain undertook, however, to give six months' notice, 
before departing from the fundamental principles of the convention by granting either bounties on the 
exportation of sugar or a preference to colonial sugar, or, again- by subjecting to different rates beet and 
cane sugar. (Board of Trade Journal, Sept. 5, 1918, p. 305.) 

13 Board of Trade Journal, Sept. 5, 191S, p. 305. 



816 COLOls^IAL TAEirr POLICIES, 

The country will need all the food, all the raw materials, and all the credit which it 
can obtain, and fresh taxes ought not to be imposed on food or upon the raw materials 
of our industry. At the same time a preference will be given to our colonies upon 
existing duties and upon any duties which for our own purposes may be subsequently 
imposed. 

One of the lessons which have been most clearly taught us by the war is the danger 
to the nation of being dependent upon other countries for vital supplies on which the 
life of the nation may depend. It is the intention, therefore, of the Government to 
preserve and sustain where necessary these key industries in the way which experi- 
ence and examination may prove to be best adapted for the pui'pose. 

If production is to be maintained at the highest limit at home, secmity must be 
given against the unfair competition to which our industries may be subjected by the 
dumping of goods produced abroad and sold on our market below the actual cost of 
production. 

These pronouncements in favor of imperial preference indicated 
that as soon as more normal conditions returned the Government 
would definitely align itself in support of a program of preference 
to the colonies following closely the lines laid down in the resolutions 
supported by the colonial representatives at the imperial conferences 
of 1902 and 1907. In conformity with these resolutions, the British 
Government promised to introduce measures for preferential rebates 
from existing duties on colonial imports. These measures were to 
be decided upon independently by the British Parhament and not 
by agreement with the colonies; they were not to necessitate new 
taxes on imports and especially on imports of foods; and, in response 
to the war-time sentiment in favor of the imperial control of the 
resources in raw materials of the Empire, they were to make provision 
for the reservation to the citizens of the Empire of its natural re- 
sources. The victory of the coalition forces in the general election 
of December 14, 1918, promised an early enactment of measures to 
carry out the policy of preference. 

II. The Establishment of Preferences. 

TARIFF ACT OF 1919. 

On April 30, 1919, Mr. Austen Chamberlain, chancellor of the 
exchequer, introduced proposals for preferential rebates on imports 
from the colonies of articles dutiable under the existing tariff. He 
pointed out that the range of the British tariff was not large and 
that the only important colonial products which were affected by it 
were tea, cocoa, and rum. There were other dutiable articles, how- 
ever, of which he specifically named coffee, sugar, tobacco, and wine, 
which were imported from the colonies to some extent and would 
profit by a preference. "For the present, my task is only to give 
effect and assent to the declaration of the imperial war cabinet and 
the imperial war conference two years ago, in which the representa- 
tives of the British Government concurred, that as soon as possible 
preference on duties now or hereafter existing should be introduced 
for goods of imperial origin. "^^ Although he regarded these proposals 
as a "small beginning," he saw possibilities of a wide extension of 
intra-imperial trade. Four maki considerations, he explained, had 

1^ House of Commons Parliamentary Debates, vol. 115, No. 52, p. 124. Mr. Chamberlain's statement 
once more implies that the decision to establish preference was reached in 1917 by agreement with repre- 
sentatives of the colonies. Note, however, the disavowal by Premier Borden of Canada (p. 814) and 
by Mr. Bonar Law (p. 815). 



GREAT BEITAIN SINCE 1914. 8l7 

been taken into account in deciding the form which preference 
should take: 

In the first place the preference should be substantial in amount. In the next 
place the rates should as far as possible be few and simple. Thirdly, where there 
is an existing excise duty corresponding to the customs duty which is affected, the 
excise duty must be proportionately altered. We can tiot give preference at the 
expense of the home producer. Lastly, in carrying out this policy I have to remem- 
ber the interests of our Allies and, as far as practicable, to avoid increasing duties 
on their products for the purpose of giving preference. ^° 

THE TERMS OF THE PREFEREKCE. 

The finance act of 1915 had enacted new customs duties on cine- 
matograph films, clocks and watches, motor cars, and musical instru- 
ments, which were declared to be intended as sumptuary legislation, 
but which were protective in character and carried with them no 
corresponding excise duties. On these duties the budget proposed 
a preference of one-third of the general rates. 

The other duties in the British tariff were purely revenue duties, 
and in many cases their ad valorem equivalent was very high. ^^ A 
preference of one-third on these articles," Mr. Chamberlain declared, 
'^ would be both more than I could afford, and more than I think is 
necessary or justified. * * * But on consideration of all the facts, 
I have come to the conclusion that one-sixth would be an effective 
preference on these articles." The preferences on articles in both 
of these classes were, with some exceptions noted later, to be given 
by rebates on colonial imports and not by surtaxes on foreign goods. 

Wine and spirits and beer, mineral waters, and matches were to 
receive special treatment. On beer, mineral waters, and matches no 
preference was to be given, partly because there were practically no 
importations from the colonies, partly because the arrangement of 
a preference would be complicated and difficult. The duties on wine 
were levied at two rates, 1 shilling 3 pence and 3 shillings a gallon, 
according to alcoholic strength. A preference of one-sixth of the 
duties would be too small to be effective, while in consideration of 
the interests of the Allies, notably of France and Portugal, it was 
inadvisable at this time to raise the duties. A preference of 6 penee 
per gallon was therefore to be granted on the lower rate of 1 shilling 
3 pence and of 1 shilling on the higher rate of 3 shillings. There were 
additional taxes of 1 shilling a gallon on still wines and 2 shillings 
6 pence a gallon on sparkling wines, and from these additional taxes 
rebates of 6 and 9 pence, respectively, were to be granted on colonial 
imports. 

With regard to spirits, the important yield of revenue from the 
excise duties m.ade it expedient that preference should be given in a 
form which would not appreciably reduce the yield of revenue. The 
preference was therefore to be established by imposing a surtax on 
foreign imports of 2 shillings 6 pence per gallon instead of by a rebate 
on colonial imports. The surtax is considerably less than one-sixth 
of the existing duties, but the amount fixed was thought sufficient 
to constitute an effective preference. 

Mr. Chamberlain estimated that, without allowance for any increase 
in the imports of colonial products, the preference proposals would 

15 Ibid. 



818 



COLONIAL TAEIFF POLICIES. 



involve a loss of £3,000,000 in revenue per annum, the great bulk of 
this loss being in connection with tea. As the bulk of the tea imports 
came from the colonies, postponement of the introduction of the new 
rate might have led to ^^-ithholding of stock, and resulted in a shortage 
in Great Britain. - The preference on tea, therefore, was made effective 
on June 2, 1919. The other preferences came into force on September 
1, 1919, in accordance with the following text: 

(1) With a ^'iew to conferring a preference in the case of Empire products, the 
duties of customs on the goods specified in the second schedule to this act shall, on 
and after the dates provided for in that schedule, be charged at the reduced rates 
(hereinafter referred to as ''preferential rates"') shoTrn in the second column of that 
schedule, where the goods are shown to the satisfaction of the commissioners of customs 
and excise to have been consigned from and gi'own, produced or manufactured in the 
British Empire. 

For the pui'poses of this section — ■ 

'"The British Empire" means any of liis Majesty's dominions outside Great Britain 
and Ireland, and any territories under His Majesty's protection, and includes India: 

Provided, That where any territory becomes a territory under His ^lajesty's protec- 
tion, or is a territory in respect of which a mandate of the League of Nations is exercised 
by the government of any part of His Majesty's dominions. His Majesty may by 
order in council direct that that territoiy shall be included within the definition of 
the British Empire for the purposes of this section, and this section shall have effect 
accordingly. 

Goods shall not be deemed to have been manufactured in the British Empire as 
aforesaid unless such proportion of their value as is prescribed by regulations made 
by the Board of Trade is the result of labor within the British Enipire. 

(2) Yv^here the Board of Trade is satisfied as respects any class of goods to which the 
preferential rates apply that those articles are to a considerable extent manufactured 
in the British Empire from material which is not wholly gi'own or produced in the 
Empire, the board may by order direct that the preferential rate shall be charged 
only in respect of such proportion of those goods as corresponds to the proportion of 
dutiable material used in their manufacture which is shown to have been grown or 
produced in the Empire. 

(3) Where goods are manufactured in a bonded factory in Great Britain or Ireland 
from dutiable material shown to the satisfaction of the commissioners of customs and 
excise to have been consigned from and grown or produced in the British Empire, 
the duty on the manufactui*ed goods shall, to the extent to which they are shown to 
have been manufactured out of such material, be charged at the preferential rate. 

(4) Any order in council made under this section shall be laid before each House of 
Parliament forth^vith, and, if an address is presented to His Majesty by either House 
of Parliament within the next subsequent 21 days on which the House has sat next 
after the order or the regulations are laid before it, pra\T.ng that the order or regula- 
tions may be annulled. His Majesty in council may annul the order or regulations, 
and the order or regulations shall thenceforth be void, but without prejudice to the 
validity of anything previously done thereunder. 



Preferential rates. 



Goods. 



Rate of duty. 



Tea 

Cocoa , 

Coffee 

Chickory 

Cm-rants 

Dried or preserved fruit (within the mean- 
ing of s. 8 of the finance (No. 2) act, 1915) , 

Sugar 

Glucose 

Molasses 

Saccharin 

Motor spirit 

Tobacco 



Five-sixths of the full mte. 



GREAT BRITAIN SINCE 1914. 819 

Goods. Rate of duty. 

Articles chargeable Avitli the new import 
duties imposed by s, 12 of the finance (No. 

2) act, 1915 Two-thirds of the full rate. 

Wine: 

Not exceeding 30° of proof spirit GO per cent of the full rate. 

■ Exceeding 30° of proof spirit 66-| per cent of the full rate. 

Sparkling wine in bottle (additional duty) . .70 per cent of the full rate. 

Still wine in bottle (additional duty) 50 per cent of the full rate. 

Spirits Rates equivalent to the full rates as 

chargeable under this act up to Sept, 1, 
1919.16 
The preferential rates shall be charged — 

(a) In the case of tea, on and after the 2d day of June, 1919. 

(b) In the case of any other goods, on and after the 1st day of September, 1919. 

A break in the series of resolutions favorable to the policy of pref- 
erence occurred early in September, 1918, when the British Labor 
Congress, by a majority of five to one, passed a resolution declaring 
that the war had not changed the soundness of the principles of free 
trade, and urging upon the Government the danger of imposing 
protective duties. 

On October 17, 1918, Mr. Hewins, in answer to a question in the 
House of Commons, replied that the policy of preference had not 
been decided upon by '' arrangement" with the colonies and that it 
would be applied to the whole of the British Empire." 

In a letter which Mr. Bonar Law made public on November 12, 
1918, Mr. Lloyd George repeated his acceptance of the principle of 
imperial preference as defined in the imperial conference resolution, 
and added that although he made a reservation with regard to 
taxation of food, this would not interfere with the grant of preference 
on any foodstuffs, as, for example, tea and coffee, which had already 
been subjected to duty. 

DISCUSSION IN PARLIAMENT. 

To intimations of Sir Donald MacLean, the leader in the House of 
Commons of the opj)osition Liberals, that Mr. Chamberlain's use of 
words '^ small beginning" in connection with his preference proposals 
meant that there would be taxes on food, Mr. Chamberlain replied, 
as follows: 

Personally, I have never repented of my support of a tax on food in prewar times, 
and have never given anybody any reason to be doubtful of my opinion upon the 
subject; but it is no proposal of His present Majesty's Government to place new duties 
upon food, and what I had in mind when I used the words my right honorable friend 
has quoted was that Imperial trade now actually done in the articles made the subject 
of preference will, I believe, under that preference, enormously extend within the 
lifetime of many members [of the House] * * ^ but all I had in mind ^ * * 
was the effect of the actual preference proposed in the present budget.^* 

Criticism of specific details of the proposals was directed especially 
against the preference on tea. Emphasis was laid by the Liberal and 
Labor critics on the fact that almost 90 per cent of the imports of tea 
already came normally from British colonies or dependencies, and 
that the cheaper Chinese teas were needed in England for mixing 
with the British-grown product. It was also urged that the prefer- 

18 The general rates on and after Sept. 1, 1919, were to be 2s. 6d. per gallon higher. 
" House of Commons, ParUamentary Debates, vol. 110, No. 100, p. 263 
18 House of Commons, Parliamentary Debates, vol. 115, No. 53, p. 229. 



820 COLONIAL TAEIFF POLICIES. 

ence was unfair to China, and would be likelj' to provoke retaliation, 
and that imperial preference was the entering wedge of protection. 

On May 7, 1919, Mr. Chamberlain in answer to criticisms of his 
preference proposals stated that the Government was bound by the 
imperial war cabinet and the imperial war conference resolutions of 
1917/^ to which, he said, every member of the war cabinet at the 
time had assent ed.^^ 

On May 20, 1919, ]\ir. Chamberlain, in the course of a reply to 
further criticisms by opposition members, declared that the prefer- 
ence proposals embodied in the budget. then under consideration did 
not comprise the whole of the Government preference policy. Pref- 
erence was not to be confined merely to customs duties, but ^' was to 
inform our whole policy." As an illustration of the character of the 
extensions to be made in the policy^ he stated that he had recently 
given instructions for the guidance of the new capital issues com- 
mittee in which he had directed that, other things being equal, capital 
which was to be expended in one of His Majesty's dominions was to be 
given preference. He also stated that the Government had decided 
three 3'ears before that Government purchases, if not made in the 
United Kingdom, should be made within the overseas Empire rather 
than in foreign countries. ^'This year on March 10," he stated, '^we 
issued from the treasury a letter to the different departments in con- 
sequence of a decision by the Government," which said: 

It is the desire of His Majesty's Government that the preference in Government 
contracts here spoken of should be effective, and whilst they think it undesirable to 
lay down any exact percentage, they desire that both in regard to opportunities to 
tender and in regard to prices the dominions, colonies, and protectorates should have 
the full advantage of their decision.- ^ 

Mr. Wuiston Churchill, in a speech before the Dundee Liberal 
Association on May 15, 1919, attempted to reconcile the preference 
proposals with the principles of free trade. Now that a tax on food 
was definitely ruled out, he believed that a rebate upon existing 
duties was not a matter about which free traders should make trouble 
at the present time. He urged that imperial preference be treated 
not as a question of principle but as a measure of imperial diplomacy 
designed to express the warmth of the gratitude Great Britain felt for 
the aid received from the colonies in the war. ^'The Dominions have 
wanted this rebate," he stated, ^'and we should be wise to concede 
it, at the same time keeping the great body of our doctrine and prac- 
tice intact" 22 

On May 20, 1919, an amendment submitted by Labor members to 
the effect ^'That this House declines to give a second reading to a 
})ill ^ * * which * * * initiates a system of preferential and 
protective duties" was defeated by 317 votes to 72, and the bill was 
read a second time. 

Extended to products of mandated territories. — The finance bill pro- 
posed that the preference should be granted to the goods '^ consigned 
from and growa, produced, or manufactured in the British Empire," 
and further explained that, ''for the purposes of this section, the 

19 Seep. 813. 

20 Mr. AdamsoB, the leader of the Labor Party in the House, stated that Mr. Henderson, the representa- 
tive of labor in the war cabinet, did not remember any resolution by which he had agreed to the principle 
of imperial preference. 

21 Ibid., vol. 116, No. 66, p. 120. 

22 Manchester Guardian, May 16, 1919. 



OREAT BRlTAIis' Slis^CE 1914. 821 

British Empire means any of His Majesty's dominions outside Great 
Britain and Ireland, and any territories under His Majesty's protec- 
tion, and includes India." 

On May 14,1919, Mr. Chamberlain, having been asked in the House 
whether the ex-German colonies for which mandates were held in the 
British Empire would be included as colonies and would thus obtain 
the advantages of the British preference, replied: ''None of the terri- 
tories alluded to will be colonies. But in certain cases, such, for 
example, as South- West Africa and certain islands in the Pacific, they 
will be administered as integral portions of the mandatory's territory 
and will consequently share in its advantages." ^^ This would indi- 
cate that it was not intended at this time to extend the preference to 
mandated territories not in the class specifically referred to by Mr, 
Chamberlain, 

On July 3, 1919, Mr. Lloyd George, in a discussion of the peace 
treaty before Parliament, declared, with respect to the mandated 
territories to be assigned to Great Britain, that South- West Africa and 
ex-German New Guinea would be assimilated for tarifi' and other 
purposes to the Union of South Africa and to Australia respec lively »^^ 
With regard to the mandated territories in general, he made the 
following statement: 2^ ''Equal opportunities for trade and com- 
merce — we have allowed that in all our colonies without distinction. 
So that you find that the conditions of the mandate described here are 
the conditions which we ourselves have always applied in respect to 
British colonies throughout the world." 

On July 9, 1919, Mr. Chamberlain, in order to extend the applica- 
tion of the preference provisions of the finance bill to the mandated 
territories assigned to Great Britain, proposed to add to the definition 
of the "British Empire " given in the original bill and stated above 
the words, ''or is a territory in respect of which a mandate of the 
League of Nations is exercised by^ the Government of any part of His 
Majesty's dominions." He explained that these territories would not 
technically come under the provision for British "protectorates," and 
that the character of the mandates had not been definitely decided 
upon. He stated that he saw no reason to suppose that there would 
be an3^thing in the form of the mandate to prevent the extension of 
preference to any of the mandated territories. 

Among the criticisms of this proposed amendment made by Labor 
and opposition Liberal members was that it would be a cause of 
dissension among the nations concerned; that a German merchant 
in South-West Africa would, through this measure, receive a preference 
over a French merchant in France or in the French colonies ; and that 
it was not in harmony with the principles of the League of Nations 
and of article 22 of the treaty of peace.^^ In defense of the amend- 
ment it was urged that it was a matter afi^ecting Great Britain only 
and made no change in the tariffs of the mandated territories, that it 
did not commit them in any way to any change, and that it would 

23 House of Commons, Parliamentary Debates, vol. 115, No. 62, p. dcxci. 

24 See appendix to Ch. IV, p. 275, for the assimilation of South-West Africa to the Union of South Africa 
with respect to tariff legislation. The tariff of New Guinea has not yet been assimilated to that ot 
Australia. 

25 House of Commons Parliamentary Debates, vol. 117, No. 87, p. 766. 

26 Article 22 of the treaty of peace makes no provision regarding the tariff treatment to be given by the 
mandatories to the products of the territories for which they hold mandates. See the text of the article 
on p. 11. 



S22 COLONIAL TAEIFF POLICIES. 

make profitable the administration of the mandated territories. The 
amendment Y%'as carried by 195 votes to 58. 

TJte fGssihility of retaliation.. — Labor and opposition Liberal mem- 
bers argued repeatedly in the course of the debate that the estab- 
lishment of a preference on colonial imports would lead to retaliation 
by foreign countries. On May 7, 1919, ]Mi\ Chamberlain stated his 
position with respect to the possibility of retaliation, as follows: 

It would not occur to any foreign Government to think that the internal arrangements 
of another nation or empire was their affair at all if so many members of the House 
of Commons and publicists outside did not studiously apply themselves to teaching 
foreign nations that it was. Now let me put the reverse case. Have we any right 
to complain because goods can pass from one Province of the Chinese Empire to 
another without pa^-ino; the charges which English goods must pay when they enter 
China? We have no right to complain. We have not thought of complaining; yet 
many parts of the British Empire are hardly more widely separated than many parts 
of the Chinese Empire, and the diversities of language and thought are as great as in 
the British Empire. ^Tiat we choose to do within the British Empire is the concern 
of the British Empire. It gives no right for any foreign nation to take offence. No 
foreign nation in\T.tes or would tolerate our interference in their internal customs 
arrangements, and I see no reason, but for the suggestions coming froni the honorable 
gentleman, why any foreign nation shotild take any offence at otir doing what other 
foreign nations have done for years without complaint from us or anybody else. If 
that be the issue, if a foreign nation chooses to raise that issue, and to_ say ,"^ when one 
portion of the British Empire treats another portion of the British Empire as kinsmen, 
as parts of one whole, as partners in one great commonwealth, that that is an offence 
to the foreign nation, then the whole British Empire would be ready to meet that and 
to stand shoulder to shoulder to combat it. 

It was raised by Germany Y\^hen Canada gave us a preference. I am sony to say 
we did not all stand shotilder to shotilder at that time, but Canada, standing alone, 
put that contention do^vn and beat them.-^ 

On July 9, 1919, ^ir. Chamberlain, in answer to the argument that 
colonial preference was hostile to the world moyement of the hour 
and more particularly out of harmony with the third of President 
Wilson's fourteen points, cited the existing preference in the United 
States to Cuba, which was not a part of the United States, as a prec- 
edent for the practice Great Britain was adopting. He said: 

Those who contend that the acceptance of it is any bar to what we are doing now, 
misinterpret the thii-d of President Wilson's fourteen points. I am quite certain 
that President Wilson's foiu'teen points do not suggest that a country has no right, 
or would not continue to have the right, to differentiate between its own citizens 
and the citizens of another nation. tSTiat he may have desired, and what I think 
he did desire, was to lessen the amotmt of discrimination, or to abolish the dis- 
crimination, with which one country treated foreign cotmtries as compared with 
one another. That is a totally different thing. -^^ * * To say that what we da 
within the British Empire is a matter which concerns foreign countries, in which 
they have a right to offer remonstrance or complaint, * -^ * seems to be a denial 
of that for which we have fought and suffered in common and which has been solemnly 
sealed by bloodshed.-? 

On the same day Ivlr. G. Murray, a Government member (coali- 
tion L^nionist), answered the argument that other countries would 
retaliate against imperial preference by citing his experience in the 
negotiation of the Canada- West Indies agreement, in which instance, 
he stated, retaliatory action v^^as threatened by the United States, 
but was not carried out. The United States, he said, could not now 
take any aggressive action because they had exactly the same prin- 
ciples in operation themselves, inasmuch as they gave preferences 

2' House of Commons, Parliamentary Debates, vol. 115, No. 57, p. .^^0 
S6 Ibid., vol. 117, Xo. 91. p. 1184. 



GREAT BRITAIN SINCE 1914. 823 

to Porto Rico, Cuba, and Hawaii. France, Holland, and Italy, he 
stated, also gave preferences to their colonies. ^^ 

On July 23, 1919, the question of possible retaliation was again 
brought up with respect to the preference, and Mr. Chamberlain 
replied by again citing the case of the United States. America has 
''a preference in force, not merely with its own possessions or de- 
pendencies, but v/ith independent territories." Great Britain was 
merely following the example of the United States, although some- 
what slowly, both in time and ex ten t.^*^ 

On the same day the finance bill was read for a third time by a vote 
of 219 to 48. 

THE ADMINISTRATION OF THE PREFERENCE. 

On August 21, 1919, notice was issued by the secretary to the 
commissioners of customs and excise that the preferential rates 
would come into effect oh September 1, 1919, with the exception 
of the preference on tea, which had come into effect on June 2, 
1919. The notice stated that: 

the expression "British Empire" for the purpose of preference includes at present 
the self-governing Dominions, the Crown colonies and protectorates, India, and the 
Channel Islands. Territories which in future may come under His Majesty's pro- 
tection, or in respect of which a mandate of the League of Nations is exercised by 
the Government of any part of His Majesty's dominions, may be included by order 
in council. 

For manufactured goods, preference was to be given only if a 
prescribed percentage of the factory or works cost to the manu- 
facturer of each finished article ready for export to the United 
Kingdom is due to labor within the British Empire. The proportion 
was fixed provisionally by the Board of Trade at 25 per cent for all 
manufactured goods, with the exception of manufactured tobacco, 
refined sugar, sirup, molasses, and other products of the refining of 
sugar. For these the proportion was fixed at 5 per cent, but prefer- 
ence could only be claimed in respect of such proportion of the 
finished article as could be shown to correspond to the proportion 
of Em.pire-grown dutiable material used in its manufacture. This 
limitation could also be extended by the Board of Trade to other 
articles which were found to be manufactured in the Empire to a 
considerable extent from materials which were not produced in the 
Empire. 

Under ^^manufactured goods" were to be included refined sugar, 
manufactured goods containing sugar or cocoa, manufactured goods 
containing spirits, e. g. pomades, varnishes, dyes, etc.; glucose, 
sirup, molasses, and other extracts of sugar, saccharin, manufactured 
tobacco; cinematograph films, motor cars and their parts, accessories, 
etc.; musical in'struments and their parts, accessories, etc.; clocks, 
and watches. 

In calculating the proportion of value which was the result of 
labor within the British Empire there could be included under the 
head of labor, the cost to the manufacturer of any materials of 
purely Empire origin entering into the composition of the article, 
the cost of manufacture including wages, proportion of fuel, super- 

23 Ibid., p. 1173. The inclusion of Holland was an error. 
20 Ibid., vol. 118, No. 101, p. 988. 



824 COLOIs^IAL TAEIFF POLICIES, 

vision and other factory expenses, and the cost of labor of packing 
for retail sale. 

PROTECTION TO BRITISH INDUSTRIES. 

In analyzing the preferential tariff, several features stand out. 
The reduction in excise duties to bring them into equivalence with 
the preferential duties establishes a measure of protection for do- 
mestic industries against foreign, but not against colonial, competi- 
tion. In many cases the articles are such as are not and can not be 
produced in their primary form in Great Britain. But the prefer- 
ential schedule covers not only the raw materials but the finished 
products manufactured from them, and the reduction of excise 
duties, corresponding to the reduction in import duties, establishes 
even for such commodities as coffee, cocoa, and tobacco, a slight 
naeasure of protection for the domestic industries engaged in con- 
verting them into articles ready for consumption. The sugar and 
tobacco duties are expected by many authorities to stimulate the 
production of these commodities in Great Britain, and attempts are 
now being made in an experimental way to develop a beet-sugar 
industry. It is significant also that in the case of the few articles 
which were already subject to protective duties in Great Britain, 
i. e., on which no excise was levied, the protection of the British 
industry against colonial competition is maintained. 

VALUE OF THE PREFERENCE TO THE COLONIES. 

Because of the limited range of articles covered in the preference 
proposal, there is little in it of value to the self-governing Domin- 
ions. Motor cars and cheap clocks and watches are produced in 
Canada, but there are no prospects of an important trade with Great 
Britain developing in these articles even under free admission, 
whereas the preferential tariff still leaves a substantial measure of 
protection for the British products against colonial competition. 
The only preferences which may prove of value to the self-governing 
Dominions are those on v»^ne, which has long been sought by Austra- 
lia and South Africa, and tobacco, production of which in Canada is 
increasing. The preferences are of interest chiefly to India and the 
Crown colonies. 

The preference on tea is 2 pence a pound, but almost 90 per cent 
of the British imports of tea aheady comes from India and Ceylon. 
Moreover, there are differences in quahty and flavor between the 
teas of India and Ceylon and those of China and other non-British 
countries, which make the choice of the purchaser between British 
colonial and foreign tea more a matter of taste than of price. With 
respect to cocoa, the situation is different. The preference is about 
three-fourths pence per pound. Only about 50 per cent of the 
imports come from British colonies and under the preference this 
proportion may increase. Coffee is consumed in relatively small 
quantities in Great Britain and only about 20 per cent of the imports 
come from the colonies. The preference, amounting to about three- 
fourths pence per pound, encourages an increase in the proportion 
coming from the colonies. 

The sugar preference offered promise of becoming important to 
the sugar-growing colonies, especially to the British West Indies 



GEEAT BRITAIN SIISTCE 1914. 825 

and Mauritius. On 96° polariscope test; tlie preference amounts 
to 3 shillings 9 pence, or 91 cents per hundredweight. This equals 81 
cents per 100 pounds and thus so greatly exceeds the preference of 
approximately 34 cents per 100 pounds granted b}^ Canada in 1913 
that it might have been expected to divert West Indian sugars from 
Canada to Great Britain. But its most important effect has been 
to set up a standard which the Canadian Government felt impelled, 
to exceed in determining the amount of the preference which they 
granted in the West Indian trade agreement of 1920.-^^ The Canadian 
preference, however, unlike the British, is extended in much smaller 
degree to sugars above No. 16 Dutch standard, so that the British 
preference creates a favored market for such sugars produced in 
the British colonies. 

Little tobacco is grown for export in the British colonies and only 
2 per cent of the British imports come from them. The preference 
on unmanufactured tobacco amounts to 1 shilling 4 pence per pound. 
This is a substantial rebate and the corresponding reduction in the 
excise may stimulate the growing of tobacco in Great Britain. 

With respect to spirits, the imports from the colonies are small, 
with the exception of rum, of which 80 per cent of the British imports 
originate in the sugar-growing colonies, especially the British West 
Indies. The surtax of 2 shillings 6 pence per gallon may force foreign 
rum out of the British market. 

PEEFEPvENTTAL IMPORT RESTRICTION'S. 

Great Britain, like all the other belligerent powers, during the 
war period exercised a more or less rigid control over foreign trade, 
as the situation demanded conservation of necessary materials, 
economy in shipping, a check on the consumption of luxuries, and 
prevention of trading with the enemy. The policy of import restric- 
tions on a large scale did not come into effect, however, until March^ 
1917. In April, 1916, the Board of Trade had set up the department 
of import restrictions to administer the licensing powers which had 
been conferred on a number of departments by royal {)roclamations. 
Only 10 or 12 classes of goods were subjected at this time to import 
restrictions, and, with a few exceptions, the administration of the 
restrictions was henceforth in the hands of the Board of Trade. In 
February, 1917, the range of goods subject to import restrictions was 
greatly enlarged and thereafter additions and changes were constantly 
being made in the list of import restrictions. 

Another method followed in restricting' imports, namely the pro- 
hibition against private individuals dealing in certain commodities, 
operated to make the trade in them a Government monopoly. This 
was done for instance in the case of wool, certain raw metals, and a 
number of other raw materials. 

Upon the initiation of the policy of import restrictions two sets 
of influences began to operate on the Government in opposite direc- 
tions. The importers of foreign and colonial goods tended to take 
the position that the free importation of the commodities they were 
interested in was essential to the proper prosecution of the war, or 
to the financial integrity of the country^ or to the welfare of the 

81 See p. 713. 



826 COLOXIAL TAEIFF POLICIES. 

civilian public. The British manufacturers of articles similar to 
those whose import was restricted soon discovered that the restric- 
tion of imports brought an extreme measure of protection with it, 
gave them a monopoly of the home market, and often resulted in 
making theh enterprises extraordinarily profitable. It was natural, 
therefore, that the manufacturers should direct all their influence 
to the continuance and the extension of the policy of import restric- 
tions » 

During the continuance of active hostilities, and for some time after 
the armistice, the import restrictions were administered without 
preference to the colonies. Diplomatic pressure from several of the 
Allies, especially France, Italy, and Japan, led, however, to special 
relaxations bemg made in theh^ favor and thus resulted in the estab- 
lishment of a substantial preference to them. The Govenmaent 
denied that these relaxations were made as the result of secret 
treaties: but there were informal agreements between Great Britain 
and the countries named, whereby in retiu-n for relaxations in favor 
of British products in their own import programs and other conces- 
sions these countries received specified favors with regard to the 
admission of their products into Great Britain. ^^ 

These concessions were not extended to the colonies, and from 
Canada there came some vigorous protests against the discrimination.^ 

Following the armistice, there were many relaxations and termina- 
tions of restrictions on imports, but on March 7, 1919, Sir Auckland 
Geddes, minister of reconstruction, announced in the House of Com- 
mons that all manufactured and semimanufactm^ed commodities, 
whose importation was not to be wholly prohibited, would be per- 
mitted to enter only under a system of special Hcenses until Sep- 
tember 1, 1919, when the question would be reviewed. Everything 
was in a state of flux and uncertainty; international price levels were 
ill-adjusted; the exchange system was difficult: employment had 
to be provided for the demobflized soldiers and munition workers; a 
general fall in prices was expected; and for all these reasons heroic 
measures were necessary to give confidence to British industry. 

It was decided, however, that no import restrictions should con- 
tinue to be imposed on imports of colonial products without the 
assent of the war cabinet, which would not be given unless some 
unforeseen necessity arose, and the Board of Trade at once issued a 
■general license to the customs, permitting the importation into the 
United ILingdom of all articles on the list of prohibited imports 
when they were exported from and were the produce or m.anufac- 
tui^e of any part of the Empire. Exception was made, however, 
of gold not consigned to the treasury, spirits other than brandy and 
rum and hops.^^ 

52 Mr. Cecil Harmsworth, on Jmie 3, 1919,. stated in the House of Conmions: "'Xo commercial treaties 
have been concluded vrith Italy, France, or Japan since the outbreak of the vrar . and it is not proposed to 
do so now. * * * There hare, of course, been constant negotiations during the war between His Majes- 
ty's Government and the three Governments mentioned on commercial matters arising out of the block- 
ade and import and export restrictions."' (The Times (London), June 4, 1919.) 

The original agreement with France was signed on Aug. 24, 19i7. It provided for the relaxation of the 
British restrictioiis on French silks, clothing, wines, fruits, and some other articles In return for a general 
suspension of the French restrictions on the importation of British products. The agreement with Italy 
was similar in character. Japan demanded and received similar concessions, but rehable information as 
to the character and extent of the concessions she granted in return is not available. (See for the agreement 
with France, Revue d' Economie Pohiique, March-April, 1919; La Politique Franjaise en matlere d' 
Importation Pendant la Guerre, bv Albert Aftahon.) 

33 Cf. Canada; House of Commons Debates. Unrevised edition. Feb. 2S, 1919, p. 125; Feb. 27, 1919, p. SO; 
Mar. 6, 1919, p. 244. Times (London), Mar. 7, 1919. 

ii Board of Trade Journal, Mar. 3, 1919, p. 33S. 



GREAT BRITAIN" SINCE 1914. 827 

On August 22, 1919, the Government announced that imports 
would be admitted without restriction after September 1, 1919, 
with the exception of a long list of articles, the products of ^^ unstable 
key industries" for which import licenses would still be necessary. 
This list consisted chiefly of coal-tar derivatives for use in the manu- 
facture of dyestufis, synthetic drugs and flavoring, a number of 
colors, various chemicals, optical glass, gcientific and optical instru- 
ments, hosiery, hops, magnetos and gauges, illuminating glassware, 
tungsten, gas mantles, and needles. 

It was also announced that legislation was under preparation, and 
would be introduced at the autumn session, for protection against 
dumping and against any sudden flood of imports which might 
follow upon the collapse of the exchange rates, and to deal further 
with '^unstable key industries" by scheduling additional products, 
the importation of which would be prohibited except under license. 

The restrictions on imports which were continued or which were 
subsequently to be reimposed were not to apply, except under 
extraordinary circumstances, to imports from the colonies. For 
such articles as were subject to import restrictions, the suspension 
of the restrictions for <5blonial products thus resulted in the grant of 
the maximum possible preference to the colonies. 

THE SANKEY JUDGMENT. 

In a case brought late in 1919 to test the validity of the Govern- 
ment's action in prohibiting imports. Justice Sir John Sankey, of the 
King's Bench Division, held that section 43 of the customs consoli- 
dation act of 1876, under which the Government had claimed author- 
ity to restrict imports, did not authorize such measures. The section 
provides that ^Hhe importation of arms, ammunition, gunpowder, 
or any other goods may be prohibited by a proclamation or order 
in council." The decision of the court disallowed the Government's 
contention that the expression ^^ other goods" applied not only 
to those of the nature of arms and ammunition, but included also 
other classes of goods. Following the court's decision. Sir Auckland 
Geddes, then president of the Board of Trade, stated in the House 
of Commons that ^'in view of the Sankey judgment the customs 
have been instructed, pending either reversal on appeal or legislative 
action, to allow the importation of all articles affected thereby. 
Early in the new session the Government will press legislation to 
secure power to reimpose restrictions of the limited scope indicated 
in the imports and exports regulation bill." 

ANTIDUMPING AND ^'kEY" INDUSTRIES. 

The imports and exports regulation bill above referred to was 
introduced as a Government measure on November 19, 1919. It 
was intended to prevent dumping and to protect key industries. 
Although provision was made in the bill for the imposition of ad 
valorem duties on goods imported into the United Kingdom at 
prices below the value of the goods in the country of export, the 
bill was primarily a licensing measure and contained a provision for 
the creation of a ^' trade regulations committee" to have general 
supervision of the enforcement of the measure, while the immediate 

185766°— 22 53 



828 COLONIAL TAEIFF POLICIES. 

administration was to be vested in tlie Board of Trade. In granting 
licenses the Board of Trade was required, so far as practicable, to 
give a preference to colonial products.^° In order to prevent infla- 
tion of prices through restrictions upon importation, the bill pro- 
vided that maximum prices might be fixed for the articles in ques- 
tion. No action on the bill was taken at that session of Parliament. 
Another bill for the same purpose ^^ was introduced b}^ Lord 
Balfour in March, 1920, and was rejected on April 22. Unlike the 
former measure, however, it made no provision for preference to 
colonial products. 

Notwithstanding the rejection by Parliament of the aforementioned 
bills, the Government again submitted proposals designed to pro- 
tect key industries and to prevent dumping.^^ The new proposals, 
embodied at first in ways and means resolutions which were passed in 
the House of Commons on May 12, 1921, and then in the safeguard- 
ing-of -industries bill which passed its third reading in the Commons on 
August 12, provide for an ad valorem duty of 33 J per cent on articles 
produced by key industries ^^ and a similar duty of 33J per cent, in 
addition to an}^ other duties, on articles offered for sale in the United 
Kingdom at prices belov/ the production costs, or at prices which 
because of currency depreciation are below prices at which similar 
I goods can be profitably produced in the United Kingdom. The 
; Board of Trade may name other articles to be added to those classified 
jin the proposed measure as articles produced by key industries. 
;^The Board of Trade is also authorized to issue from time to time 
.orders, subject to the confirmation of the House of Commons, specify- 
iing what goods shall be subject to the antidumping duty. An amend- 
ment by the Commons exempted imports from British possessions 
from the first named duty. The protective duties on products of key 
industries are authorized for only five years; but the provisions in 
regard to dumping and depreciated currencies contain no time 
limit. However, according to Commerce Reports of August 17, 

S3 The text of the billis given in the Board of Trade Journal, Nov. 27, 1919, pp. 643-647. 

86 It authorized the Board of Trade by order to prohibit the importation of any goods which were offered 
for sale in the United Eangdom at prices less than the price for which goods of the same kind were sold 
in the country of origin. The bill provided that the goods to be prohibited should be deemed to be goods 
whose importation was prohibited under section 42 of the customs consolidation act of 1876, which provides 
that certain enumerated articles may not be imported into the United Kingdom. 

The billalso contained a provision for the establishment of a "special industries council" to advise the 
board " as to the measures necessary to be taken for the promotion and assistance of special industries." 
"Special industries" were defined in the bill as "industries supplying commodities which are essential 
to the national safety, as being absolutely indispensable to important industries carried on in the United 
Kingdom, and which are entirely or mainly supplied from countries outside the United Kingdom." The 
bill did not specify what form such aid was to take. 

Under the second schedule to the bill the followLag were listed as special industries: The production or 
manufacture of sjmthetic dyes, synthetic drugs, spelter, tungsten, magnetos, optical and chemical glass, 
illuminating glassware, synthetic and optical instruments, hosiery, needles, and thorium nitrate. The 
bill provided that any other industry, which in the opinion of the council was a special industry, might 
be added to the above schedule. 

The measure met with strong opposition because of its licensing and protective features. Its opponents 
declared that it was an attempt to foist protection upon the British people in the guise of protection to 
key industries. 

37 Commerce Reports, Apr. 2 and. 14, and May 31, 1921. 

«8 Articles listed in the proposed measure as products of key industries are: Optical glass and optical 
elements, whether finished or not, microscopes, field and opera glasses, theodoUtes, sextants, spectroscopes, 
and other optical instruments; beakers, flasks, burettes, measuring cylinders, thermometers, tubing, and 
other scientific glassware and lamp-blown ware, evaporating dishes, crucibles, cumbustion boats, and other 
laboratory porcelain; galvanometers, pyrometers, electroscopes, barometers, analytical and other precision 
balances, and other scientific instruments, gauges, and measuring instruments of precision of the types 
used in engineering machine shops and viewing rooms, whether for use in such shops or rooms or not; 
wireless valves and similar rectifiers, and vacuum tubes; ignition magnetos and permanent magnets; 
arc-lamp carbons; hosiery latch needles; metallic tungsten, ferrotungsten and manufactured products of 
metallic tungsten and compounds (not including ores or minerals) of thorium, cerium, and the other rare 
earth metals; all synthetic organic chemicals (other than synthetic organic dyestuffs, colors and coloring 
matters imported for use as such, and organic intermediate products imported for their manufacture), 
analytical reagents, all other fine chemicals and chemicals manufactured by fermentation processes. 



GREAT BRITAIiT Slis^CE 1914. 829 

1921, '^the part having to do with depreciated exchanges appears to 
contravene commercial treaties with 26 foreign powers. The Govern- 
ment gives assurance that it does not intend to denounce any existing 
commercial treaties and, as a consequence, the only countries of 
commercial and competitive importance to which the exchange pro- 
visions of the bill could be made to apply are France, Germany, and 
whatever remains of the old Austro-Hungarian Empire." 

PREFERENCE UNDER LAW TO PROTECT DYESTUFFS INDUSTRY. 

While endeavoring to obtain legislation to protect key industries 
the Government succeeded in securing the enactment of a law to 
safeguard the dyemaking industry. On December 23, 1920, Parlia- 
ment passed the dyestuffs (import regulation) act, effective January 
15, 1921, under which the importation of synthetic organic dye- 
stuffs, colors, and coloring matters, and all organic intermediate 
products used in the manufacture of such products is prohibited, 
but the Board of Trade is empowered by license to authorize the 
importation of any of the products prohibited under the act. For 
the purpose of advising the board with respect to the granting of 
licenses, the board is directed to constitute a committee consisting 
of five persons concerned in the trades using the class of goods 
whose importation is prohibited, three persons concerned in the 
manufacture of such goods, and three other persons not directly 
concerned as aforesaid. The board is directed to appoint another 
committee to advise it with respect to the efficient and economical 
development of the dye-making industry. To provide funds for 
the administration of the act the board may charge for each license 
a fee not to exceed £5, 

Provision for preference to imports from British colonies is made 
in section 2 of the act which states, ^^ If, on an application for a license 
under this section, the committee are satisfied that the goods to 
which the application relates are goods wholly produced in some 
part of His Majesty's dominions, a license shall be granted in ac- 
cordance with the application." The act is to continue in force 
for a period of 10 years. 

GERMAN REPARATION RECOVERY ACT. 

The German Reparation (Recovery) Act, which became a law on 
March 24, 1921,^^ provided that British importers of goods either 
consigned from or produced in Germany should pay one-half of the 
purchase price, or some lesser percentage as the treasury might 
prescribe, not to the German exporter but into a fund to be used for 
the payment of Germany's indebtedness to the Allies. It should be 
noted that the payment contemplated was not 50 per cent ad valorem 
in addition to the price paid to the German exporter but that 50 
per cent of the stated price was to be withheld and turned into the 
reparation fund. The act therefore contemplated a maximum duty 
not of 50 per cent but of 100 per cent of the value of the goods as 

'9 The title of the act was ' ^A.n act to provide for the application of part of the purchase price of imported 
German goods toward the discharge of the obligations of Germany under the treaty of Versailles." The 
act was applicable to goods imported on and after Apr. 1, 1921, ' 'Provided, That this act shall not apply to 
goods imported before the 15th day of April, 1921, if it is proved to the satisfaction of the commissioners 
that the goods are imported in pursuance of a contract entered into before the 8th day of March, 1921," 
i. e., the date of the introduction of the bill. 



830 COLONIAL TAEirr POLICIES. 

measured by the amount received b}^ the German exporter. The 
drastic effect of the act was softened from and after May 12, 1921, 
by action of the British and German governments. The British 
Government reduced the rate of the duty to 26 per cent and the Ger- 
man Governm^ent agreed to reimburse German exporters for the 
amounts withheld from them. The result of these actions was the 
reduction of the rate of duty to 26 per cent of the total amount 
actually received by the German exporter.**^ 

It was believed that the act would operate in one of two ways: 
(1) The German Government might reimburse the exporters of Ger- 
many for the sums withheld from them (as it has done from May 
12) and in this case the act would have relatively little direct effect 
upon trade, but would result in securing large revenues for the repa- 
ration fund. (2) If the German Government did not reimburse the 
exporters of Germany, the exporters, in so far as they could not 
meet the situation by accepting a sm^aller margin of profit, would be 
forced to raise their prices materially (doubling them if the 50 per 
cent rate were retained). Thus the failure of the German Govern- 
ment to reimburse its exporters would have resulted in a protective 
duty which would have curtailed Germany's export trade to Great 
Britain and to other countries which have adopted or may adopt 
similar legislation.*^ In case it were found that Great Britain was 
dependent upon Germany for any products and that the consumer 
was therefore forced to pay the major part of the increase in price, 
the treasury, under the authority vested in it of prescribing a per- 
centage smaller than 50 per cent, was expected to give relief .^^ 

The provisions of the measure were summarized in the official 
Board of Trade Journal as follows : ^^ 

Clause 1: That 50 per cent of what is due for German goods, or such percentage as 
the Treasury may prescribe, shall be paid, not to Germany, but to the treasury 
through the customs on account of German reparation. 

Clause 2: German goods are defined as (a) goods first consigned from Germany, and 
(6) goods consigned from elsewhere, of which less than 25 per cent of the value is 
attributable to production outside Germany. But the act is not to apply to trans- 
shipment goods. 

Clause 3: (i) The value of the goods for the purposes of the act is to be f. o. b. value; 
(ii) but, in the case of goods consigned to Germany to have a process to be performed 
upon them, the act is to apply only to the increased value resulting from that process; 
(iii) in addition, it is provided in this clause that when a person would be out of 
pocket on account of an advance made, because he did not retain the full proceeds 
of the goods sent here against such advance, he should be allowed to deduct from the 
sum payable to the commissioners of customs the amount necessary to prevent his 
being so out of pocket; (iv) provision is also made in this clause for the settlement of 
disputes as to value; and (v) for the furnishing of certificates of origin. 

<" If the German Government had declined to reimburse the exporter, on a sale of $100 he would have 
received only S74 net and the duty of $26 would have been in fact an ad valorem duty of over 35 per cent. 
Similiarly at present if an invoice gives the value of the goods at $100 and contains a specialstipulation that 
the full amount , without deduction of the duty, shall be paid to the German exporter, the goods are valued 
for castoms purposes at $135.14 and the duty at the rate of 26 per cent is then $35.14. (Commerce Reports, 
July 28,1921.) The German Government has agreed to reimburse exporters for shipments before May 12. 

41 France, Belgium, Koumania, and also Japan, Italy, Greece, Portugal, Liberia, and Siam have passed 
or had under consideration similar legislation. Yugo-Slavia suspended a similar duty on June 30, 1921. 

42 The first three orders issued by the treasury mitigated the terms of the German reparation act as foUows: 
The first exempted from the operation of the act articles imported before May 15, if imported under a con- 
tract entered into before Mar. 8, and dispatched from the place of consignment before Apr. 8; the second 
exempted articles, the physical possession and property m which had passed to a foreign Government 
other than the German Government before Mar. 8, and which were imported for the purpose of being 
treated and sold on behalf of such Government; the third reduced the rate to 5 per cent in the case of such 
articles as could not be produced and worked elsewhere than in Germany, provided that the articles were 
produced in and exported from Germany by a company so producing and exporting before Mar. 8, and 
in which not less than 90 per cent of the capital was owned by British nationals before Mar. 8. (Manchester 
Guardian, Apr. 20, 1921.) 

" Board of Trade Journal, Mar. 17, 1921, pp. 294,295. 



GEEAT BRITAIN SINCE 1914. 831 

Clause 4: Persons who have made contracts to accept bills may apply to the court 
for suspension, annulment, or, with the consent of the parties, variation of the contract 
when the enforcement of the contract would result in serious hardship in conse- 
quence of circumstances arising out of the act. 

Clause 5: On the recommendation of a committee or committees consisting mainly 
of business men, the Board of Trade may, as respects articles of any class, make, or 
description, reduce the percentage payable to the commissioners, or vary the per- 
centage referred to in clause 2, and may also extend the classes of contract to which 
clause 4 relates. 

Clause 6: By resolution of both Houses, the act may be suspended by order in 
council, to such extent and for such period, definite or indefinite, as may be specified. 

III. Summary. 

In three ways the war aided the movement for the establishment 
of a protective and preferential tariff policy in the United Kingdom. 
It stimulated the national sentiment of the people and their interest 
in and appreciation of the people of the Dominions and the colonies. 
It brought to power as members of the coalition cabinets the leaders 
of the movement for ^Hariff reform." And it led to the imposition 
of duties and of import restrictions which, though they were intro- 
duced for military reasons, were in effect protective measures and 
which, though avowedly temporary, presented free traders with 
faits accomplis, putting them at the disadvantage of opposing vested 
interests. 

The trend of English opinion was shown early in 1916 when the 
Chamber of Commerce of Manchester, a free-trade stronghold since 
the days of Cobden and Bright, rejected a resolution affirming free- 
trade principles. In assenting to the terms of the Paris economic 
pact (June, 1916) the second coalition government committed them- 
selves to tariff discriminations against enemy countries. The impe- 
rial war cabinet and the imperial war conference indorsed the prin- 
ciple of preferential tariffs in favor of the colonies. The final report 
(February, 1918) of the committee on commercial and industrial 
policy after the war favored a limited system of protective duties^ a 
preferential system extending throughout the tariff schedules, and 
preferential treatment of the colonies and Dominions by means other 
than the tariff. In the fall of 1919 the coalition government gave 
notice of the termination of the obligation to impose no differential 
duties on sugar, and in their election manifesto they pledged them- 
selves to the protection of key industries, antidumping legislation, 
and a preference in all duties then existing or subsequently imposed. 
The election of December, 1918, gave a '^ mandate'' to the Govern- 
ment to carry out this program. 

Aside from the duties imxposed in 1915 in order to restrict the im- 
portation of motor cars and cycles, clocks and watches, musical 
instruments and cinematograph films, the carrying out jof the pro- 
tective and preferential program was not begun until after the war. 
Since the war the following preferential measures have been put in 
force: (1) The finance law of 1919 established, in favor of products 
of any part of the Empire, preferential reductions to the extent of 
one-third or one-sixth tlirough the restricted tariff schedule of the 
United Kingdom ; (2) until the system was declared void in Decem- 
ber, 1919, the general prohibition upon importations, except as 
licensed, was not applied to products of the colonies; (3) the dye- 
stuffs act, effective January 15, 1921, prohibits the importation, ex- 



832 COLOXIAL TAEIFF POLICIES, 

cept as licensed, of large classes of dyestuffs unless tliev have been 
produced wholly within some British possession. The preferential 
feature of this law is of minor importance compared to its protectiye 
effects. In addition to the protective measures already mentioned, 
protective duties of 33J per cent ad valorem have been authorized 
for the following purposes: (1) To protect enumerated key indus- 
tries; (2) to penalize goods which are sold in the United Kingdom at 
prices below the cost of production so as to threaten with unemploy- 
ment the workers in a British industry; and (3) to exclude goods 
which by reason of the depreciation of the currency of the country 
in which they are manufactured are produced at lower prices than 
those at which similar goods can be profitably manufactured in the 
United Kingdom. Further protection is contained in the German 
reparation act which estabhshed what is, in effect, a special duty 
upon goods produced, to the extent of 75 per cent or more of their 
value, in Germany. The duty is levied by requiring the British 
importer to pay into a special fund, instead of to the German ex- 
porter, 26 per cent of the purchase price, i. e., as long as the German 
Government does not reimburse its exporters the duty becomes, in 
effect, a protective tariff at the rate of 35 per cent ad valorem, the 
value being measured by the price received by the German exporter. 

Bibliography, 
great britain and the dominions. 

OFFICIAL WORKS. 

Great Britain: 

Colonial Office List. Annually. 

Colonial Statistical Tables. Annually. 

The Commonwealth of Australia Constitution. Acts 63 and 64 Yict. Ch. 12, 1912. 

House of Commons Debates. 

Pariiamentaiy Papers — 

Proceedings of the Colonial Conference of 1887. C. 5091, 1887. 
Colonial Conference of 1894. C. 7824, 1895. 
Conference with Colonial Premiers at London. C. 8596, 1897. 
Colonial Conference of 1902. Cd. 1299, 1902. 
Minutes of the Customs Conference. Cd. 1640, 1903. 
Differential Duties. Cd. 2394, 1905. 

Proceedings of the Colonial Conference of 1907. Cd. 3523, 1907. 
Eoyal Committee on Trade Relations between Canada and the West Indiea. 
Minutes of Eiddence: Taken in Canada, Cd. 4991; in West Indies, Cd. 
5370; in London, Cd. 5371, 1910. 
Correspondence with the West Indian Colonies relating to the Brussels Sugar 

Convention, Aug. 1912, Cd. 6282, 1912. 
Dominions Royal Committee. Mnutes of Evidence taken in Newfoundland. 

Cd. 7898, 1915. 
Resolutions Passed by Committee on Commercial and Industrial PoHcy after 

the War. Cd. 8482, 1917. 
Imperial War Conference, 1917. Cd. 8566, 1917. 

Final Report of the Committee on Commercial and Industrial PoUcv after 
the War. Cd. 9035, 1918. 
Statistical Abstract for the British Empire. Annually. 
Australia: 

Parliamentary Debates. 

Department of Trade and Customs: Customs Tariffs, 1908, 1911, and 1914 (1915). 
The Official Year Book of the Commonwealth of Australia. 
Canada: 

House of Commons Debates. 
Canada Gazette, daily. 

Sessional Papers — No. 89, 1883: Report on Canadian Preference. No. 55, 1913: 
Canada- West Indies Conference. 



GREAT BRITAIN SINCE 1914. 833 

Newfoundland : 

Newfoundland Customs Returns. Annually. 

Parliamentary Debates. Budget speeches of Minister of Finance and Custams, 

March 15, 1907, and February 11, 1908. 
Year Book. 
New Zealand : 

Customs Act of 1908. 
Parliamentary Debates. 
Year Book. 
South Africa: 

British South Africa Co.'s Government Gazette, 1915. 

Southern Rhodesia, Customs and Excise Handbooks, 1915. 
National Report of the Customs Union Tariff Commission, Pietermaritzburg, 1908. 
Transvaal. Report of the Customs and Industries Commission, Pretoria, 1908, 
United States: 

Department of Agriculture. Yearbook. 

Department of Commerce and Labor, Bureau of Manufactures: Tariff Series No. 

26, Tariff Relations of Canada. 1911. 
Department of Commerce; Bureau of Foreign and Domestic Commerce: Tariff 
Series No. 37. Customs Tariff of Australia. 1918. 
Miscellaneous Series No. 59. Methods of Computing Values in Foreign 

Trade Statistics. 1917. 
Special Agents Series 119: Government Aid to Merchant Shipping, 1916. 
Treasury Department, Court of Customs Appeals: Decisions. 
Tariff Commissian: Reciprocity and Commercial Treaties, 1919. 
Reciprocity with Canada, 1920. 

NONOFnCIAL PUBLICATIONS. 

Aftalion, Albert: La Politique Francaise en Matiere d 'Importation pendant la Guerre. 

AUin, C. D.: A History of the Tariff Relations of the Australian Colonies. Univer- 
sity of Minnesota Studies in the Social Sciences, No. 7, Minneapolis, 1918. 

Association of Chambers of Commerce of South Africa: Proceedings of the Twenty- 
second Annual Congress. Johannesburg, 1919. 

Aucldand (N. Z.) Star. Daily. 

British Empire Review. London, monthly. 

British and South African Export Gazette. London, monthly. 

Bryce, James: Impressions of South Africa. London, 1899. 

Canadian Annual Review of Public Affairs. Toronto, annually. 

Cape Argus, Cape Town, daily. 

Cape Times, Cape Town, daily. 

Cape Town Chamber of Commerce: Journal, monthly, 

Chomley, C. H. : Protection in Canada and Australia. London, 1904. 

Cobden Club Pamphlet: A Decade of Tariff Fooling. London, 1913. 

Cowderoy, B.: Reciprocal Tariffs and Intercolonial Trade. Melbourne, 1883. 

Current Literature. New York, monthly. 

The Dominion. Wellington (N. Z.), daily. 

The Edinburgh Review. London, quarterly. 

Evans, Samuel: The Burden of Protection. London, 1912. 

Fuchs, Karl J. : The Trade Policy of Great Britain and her Colonies Since 1860 (trans- 
lated). London, 1905. 

Harkin, William A. : Political Reminiscences of Sir Charles Tupper. London, 1914. 

Harris, Percy A.: New Zealand and its Politics. London, 1909. 

Hensman, Howard: History of Rhodesia. London, 1900. 

Hobson, J. A.: The New Protectionism. A Cobden Club Pamphlet. London, 1916. 

Holland, Bernard H.: The Fall of Protection. London, 1913. 

Hooker, W. H.: The Handicap of British Trade. London, 1916. 

Hombeck, Stanley K.: The Most-Favored-Nation Clause in Commercial Treaties. 
Madison, 1910. 

Iwan-Muller, E. B.: Lord Milner and South Africa. London, 1902. 

Jebb, Richard: The Imperial Conference. London, 1911. 

Keith, Arthur B. : Responsible Government in the Dominions. London, 1909. 

Kingston (Jamaica) Gleaner. Daily. 

Manchester (Eng.) Guardian. Daily. 

Marshall, Alfred: Industry and Trade. London, 1919. 

Melbourne Age. Daily. 

Mills, John Saxon: Landmarks of British Fiscal History. 2d ed. London, 1908. 



834 COLONIAL TARIFF POLICIES. 

Mitchell, Sir Lewis: Life of tlie Right Hon. Cecil J. Rhodes. London, 1910. 

The Monetary Times. Toronto, weekly. 

Montagu, E. S., and Herbert, B. : Canada and the Empire. London, 1904. 

The Nation. New York, weekly. 

New Zealand Gazette. Wellington, daily. 

New Zealand Herald, Auckland, daily. 

Porritt, Edward: Sixty Years of Protection in Canada, 1846-1907. London, 1908. 

Porritt, Edward: British Preference in Canada; in Quarterly Re\iew, vol. 218 (1913), 
London. 

Pulsford, Edward: The Colonial Conference of 1907. London, 1908. 
Commerce and the Empire, 1914 and After. London, 1917. 
Empire Commerce. London, 1907. 

Quarterly Re^iew, London, quarterly. 

Revue d'Economie Politique. Paris. 'monthly. 

Robertson. Right Hon. John M. : The New Tariffism. London, 1918. 

Scholefield, G. H.: New Zealand in Evolution. London, 1909. 

Todd, Alpheu.s: Parliamentary Government in the British Colonies. Boston, 1880. 

The Toronto Globe. Daily. 

Turner, H. G. : The First Decade of the Australian Commonwealth. Melbourne, 1911. 

Walton. Sir E. H. : The Inner History of the National Convention of South Africa. 
New York, 1912. 

Wickett, S. Morley: Canadian National Problems; in Annals of American Academy 
of Political and Social Science. PMladelphia, 1913. 

Wise, B. R.: The Commonwealth of Australia. London, 1909. 

Worsfold, W. B. : The Reconstruction of the New Colonies under Lord Milner. Lon- 
don, 1913. 

General Bibliography. 

treaty collections. 

General: 

Great Britain, Foreign Office: British and Foreign State Papers, 1812-1920. 
Ilertslet, Sir Edward: The Map of Africa by Treaty, 3d ed. revised and completed 

to the end of 1908. London, 1909. _ ; 

Martens, G. F. de: Recueil des Principaux Traites d' Alliance, de Paix, de Treve, 
etc., 1791-1915. Gottingen and Leipzig. 
Belgium: . " . 

Busschere, Alphonse de, ed.: Recueil des Traites et Conventions concemant le 
Royaume de Belgique, 1850-1914. Brussels, 1896-1914. 
France: 

Mnistere des Affau-es Etrangeres. Clerq, A. J. and Jules de, eds.: Recueil des 

Traites de la France. Paris, 1864, 1880-1907. 
Ministere des Colonies. Documents Diplomatiques — 

Correspondence et Documents relatifs a la Convention Franco- Anglaise clu 14 

Juin, 1898. Paris, 1899. 
Delimitations des Possessions Francaises a la Cote Occidentale d'Afrique, 
1889-1895. Paris, 1895. 
Germany: 

Reichsamt des Innern: Die Handelsvertrage des Deutschen Reichs. Bejlin, 1906. 
Great Britain: 

Bernhardt, Gaston de, comp.: Handbook of Treaties, etc., relating to Commerce 
and Navigation between Great Britain and Foreign Powers. London, 1908, 
1912. 
Parliamentary Papers, 1916, Cd 8403. Treaty Series. Treaty of August 24, 1916. 
Hertslet, Lewis, and others, comp.: A Complete Collection of the Treaties, Con- 
ventions, and Reciprocal Regulations at present Subsisting between Great 
Britain and Foreign Powers, etc.; so far as they relate to Commerce and Navi- 
gation, etc., 1827-1917, London. 
Ita.y:_ 

Ministero degli Affari Esteri: 

Elenco degli Atti Internazionali concliusi dal Regno d' Italia, etc., Rome, 

1881.^ 
Ti'attati e Convenzione tra il Regno d'ltalia e gli altri Stati. Trndu, Florence, 
and Rome, 1862-1907. 



GREAT BRITAIN SINCE 1914. 835 

Korea: 

Rockhill, William W., ed.: Trea^ties and Conventions with or concerning China 
and Korea, 1894-1904. Washington, 1904. 

Treaties, Conventions, etc., relating to China and Korea (October, 1904, to 
January, 1908). Washington, 1908. 
Morocco: 

France — Ministere des Colonies. Documents Diplomatiques: Affaires du Maroc. 

Protocoles et Comptes Rendus de la Conference d'Algesiras. Paris, 1906. 
Rouard de Card, Edgard: Les Traites du Commerce conclus par le Maroc avec lea 
Puissances Etrangeres. Toulouse, 1907. 
Spain: 

Cantillo, Alejandro del, eds.: Tratados, Convenios, y Declaraciones de Paz y de 

Comercio, 1700-1843. Madrid, 1843. 
Olivart, Marques de and others, ed.: Coleccion de los Tratados, Convenios, y Docu- 
mentos Internacionales, etc., desde el Reinado de Doiia Isabel II hasta Nuestras 
Dias. Madrid, 1890-1912. 
United States: 

Senate Committee on Foreign Relations. Mallory, William M. comp,: Treaties, 
Conventions, etc., between the United States of America and other Powers, 
1776-1913. Washington, 1913. 

BOOKS AND PERIODICALS CONTAINING GENERAL INFORMATION ON 

TARIFFS, TRADE, ETC. 

Bulletin International des Douanes (International Customs Journal, sometimes re- 
ferred to in footnotes as ''B. I. d. D."). Brussels, 1892 — (Suspended during the 
war). 

Didot-Bottin: Annuaire (Almanach) du Commerce. Paris, 1842 — 

The Economist. London, weekly, 1843 — 

L'Economiste Fran(,'ais. Paris, weekly, 1873 — 

France: Ministere du Commerce: Annales du Commerce Exterieur. Paris, 1843 — 

Great Britain. Board of Trade Journal (sometimes referred to in footnotes as "B. 
T. J.") London, weekly, 1886— 

Great Britain, Foreign Office: Diplomatic and Consular Reports. London, 1862 

Italy, Ministere degll Affari Esteri: Bollettino Consoiari. Rome, 1861 — 

Italy, Ministere della Finanze: Bollettino di Legislazione e Statistica Doganale e Com- 
merciale. Rome, 1884 — 

Kelly's Customs Tariffs of the World. London, annually, 1907 — 

Statesman's Year-Book. Statistical and Historical annual of the States of the World. 
London, 1864 — 

The Times. London, daily. 

The Times Trade Supplement. London, weekly. 

United States Department of Commerce. Dailj Consular and Trade Reports, con- 
tinued (1915-21) as Commerce Reports. Washington, daily except Sunday; weekly 
from September 5, 1921. 



INDEX. 

Fn. = Footnote. 

Abyssinia: 

Treaties of, with Italy, 373; Great Britain, 387. 
Importation of arms, 381. 
Aden, 281, 293. 400 fn., 411. 

Tariff, 295. 
Ad valorem duties: 

Assessment in depreciated currencies, 67; in Louren^o Marques and Inhambane, 

512; Canada, 691; New Zealand, 775; Australia, 804. 
Discriminatory effect, 66, 69; in Canada, 661, 718. 

Valuation for assessment of, in Belgian Congo, 124, 125; Syria, 271; Cameroons, 273; 
Dutch East Indies, 473; Mozambique, 509, 512; Zanzibar, 304 fn.; Nyasaland, 
304 fn.; Newfoundland, 7:34; South Africa, 751; Portuguese India, 525 fn. 
Official valuations, in Syria, 271; Egypt and Sudan, 304 fn., 358; India, 334; 

Morocco, 208 fn.; Dutch East Indies, 473; Curasao, 475. 
Use of, in export duties, 51; in Mozambique, 514; Angola, 506; Guinea, 524; 

Curasao, 476. 
Use of, in import duties: In the Dominions, 49, 728; British East Africa, 304, 
British Oceania, 314; India, 334; Conventional Basin of the Congo, 88, 401; 
Morocco, 208, 211; French West Africa, 197; French Oceania, 200; German 
colonies, 242; Italian colonies, 384; Korea, to 1920, 443; Kiaochow, 447; Kwan- 
tung, 448; Dutch East Indies, 469; Dutch Guiana, 474; Curasao, 475; Timor, 
526; Philippines, 599; American Samoa, 615; mandated territories, 271, 273, 
277. 
Afghanistan, 8. 
Africa : 

Map of, 26. 

Spheres of influence in, 6. 
Treaty restrictions on liquor trade in, 89, 122. 
Agreements. (See Treaties.) 
Alaska not a colony, 9, 572, 578. 
Alcoholic liquors, 15. 

Sale restricted by Brussels treaties, 89; proposed revision of Brussels treaties, 122. 

Discrimination by classification of, 246, 358. 

Preference upon, in Great Britain, 817; Canada (1919), 690; British West Indies, 

711. 
No preference upon, in Canada, 665, 695. 
General legislation in Portuguese tariffs, 495. 
Rates on, 26. 

British West Africa, 312; Eritrea, 380, 390; Dahomey and Togo, 217; Angola, 
495, 498 fn.; French India, 218; British free ports, 294; German South- 
west Africa, 250; French West Africa, 217. 
Monopolies, 295. 
Algeciras, act of, 27, 206, 207. 
Algeria : 

Tariff system, 179; summary, 183. 
Treaty provisions, 146. 

Relations with Tunis and Morocco, 180, 185, 210. 
Export duties, 183. 
Coasting trade, 151. 
Acquisition, 3, 131. 
Part of France, 9, 153. 
Exports to France, 55, 179. 
Commercial importance, 134, 179. 
Government, 139. 
Ambriz, tariff, 500. 

837 



838 IIJ7DEX. 

American Samoa: 

Tarift', 615. 

Tariff making, 576. 

Open-door treaty, 241, 577. 

Acquisition. 4. 

Descrintion. 611. 
Anglo-Belgian India Rubber Co. (The Xhir), 104, 105, 126. 
Anglo-Egvptian Sudan. 281, 298. ^ 

Tariff, 303, 305. 

Treaty relations Tvith Eritrea, 388. 
Angola: 

"Tariffs. 499; summary, 506, 

Admission of products of, to Portugal. 490. 

Duties on alcoholic beverages, 495. 
Anticolonial movement, 3. 
Antidumping laws : 

Preferences in Canadian, 66, 692, 718, 

British. 827. 

Xew Zealand's, 775 fn. 

Australian. 801, 804. 
Antigua. 315, 707. 

Tariff, 318. 
Area: 

The colonial empires, 5. 

Belgian Congo, 115. 

French colonies. 133. 

German colonies. 230. 

Mandated territories. 269. 

British Empii-e. 5, 282. 
Free ports. 294. 
Malay States. 296. _ 
East African colonies, 300. 
West Africa, 306. 
Oceania. 310. 
West Indies, 316. 
Miscellaneous, 322. 
India, 326. 
Xewfoundland, 727. 

Italian colonies, 374. . 

Japanese Empire. 425. 

Netherlands Empii'e. 451. 

Portuguese Empii-e, 480. 

Spanish Empire, 532. 

United States and Territories, 573. 
Arms : 

Treaties limiting sale of. 89, 90. 120; proposed revision of treaties, 123. 

Rates on. in Central Africa limited. 26; limitation removed (1910), 26; in India, 
333. 

Regulation or iDrohibition of importation of. Abyssinia. 381: Morocco, 209. 
Asia: 

Map of. 4. 

Spheres of influence in. 6. 
Asquith. Herbert Henry, 654, 791. 
Assessment of duties. \See Ad valorem duties.) 
Assimilated colonies: 

Definition of tariff assimilation, 33. 

List of colonies, 36. 

French policy, 143, 147, 151, 162, 179, 185; summary, 156, 168. 

Japanese policy, 439. 

United States policy. 578, 597. 607. 

Political assimilation, 9. 
Atrocities, Belgian, 90 fn. 
Australia (See also Table of contents, p. 779): 

Preferences in import duties, summary, 48. 807, 

Tariff policies before 1907, 779: establishment of preferences, 794. 

Tariff of 1920, 799. 



INDEX. 839 

Australia — Continued. 

Agreement with South Africa, 784; negotiations with Canada, 785; New Zea- 
land, 787. 

Intermediate tariff, 800. 

Preferential features of customs administration, 802. 

Tariffs of Papua and Norfolk Island, 805. 

Preference to products of New Hebrides, 806. 

Wine industry, 358. 

Acquisition, 281. 
Austria: 

Treatment of British products, 636. 

Treaty relations with Canada, 724. 
Automobiles, 156 fn., 186, 295, 297 fn., 324, 332 fn., 361 fn., 492 fn., 772; left- 
hand drive prohibited, 295 fn., 314 fn. 
Azores, 478, 479, 489. 

Tariff, 492, 493; duties on alcoholic beverages, 495. 
Bahamas, 284, 292, 315, 708. 

Tariff, 318, 364. 

Relations with Canada, 705, 706; shipping subsidv, 715. 
Bahrein Islands, 298. 

Tariffs, 303. 
Balance of trade: 

Colonial, with mother countries, 76. 

Belgian Congo, 116. 

]\[orocro, 139. 

Bermuda, 315. 

India, 329. 

Libia, 420. 

Spanish colonies, 534. 
Balfour, Arthur J.. 653, 655, 656, 682. 
Baluchistan, 326, 336. 
Banks and colonial trade, 76. 
Barbados, 284, 290, 315, 707. 

Tariff, 318, 363. 

Offer of reciprocity, 703. 

Shipping subsidy, 715. 
Barotseland. (See Northeastern Khodesia.) 
Basutoland, 28], 737, 738, 755. 

In South African Customs Union, 742. 
Bechuanaland, 281, 738, 755. 

In South African Custom.s Union, 742. 
Belgian Congo (see also Table of contents, p. 80, and Congo Free State)', 

Tariff poiicv, 119. 

Treaty ol)ligationR, 119, 120. 

Restoration of the open door, 126. 
Belgium: 

Development of colonial empire, 3, 80. 

Trade with colonies, 19, 117.' 

Commercial treaties, 29, 677. (See also Treaties, open-door.) 

Treatment of colonial ])roducts, 58, 123. 

Annexation of Congo Free State. 114. 

British treaty with, 635, C45. 
Benadir, 373, 401. 
Benguela, tariff, 502. 

Berlin, conference of. (See Conference of Berlin.) 
Bermuda, 284, 315, 708. 

Tariff, 318. 

Rejects Canadian agreement, 363, 365; relations with Canada, 705, 706. 
Bhutan, 283, 326. 
Bibliographies: 

General references on tariffs, 835. 

Treaty collections, 834. 

Congo Free State and Belgian Congo, 128. 

France, 223. 

Germany, 263. 

British Crown colonies, 370. 

Great Britain and the Dominions, 832. 



840 liS^DEX. 

Bibliographies — C nt'nued. 
Italy, 422. 
Japan, 448. 
Netherlands, 476. 
Portugal, 527. 
Spain, 569. 
United States, 629. 
Bismarck. 4. 

Calls conference of Berlin, 83, 229. 
Colonial policy, 228. 
Bond-Blaine convention, 639, 732, 733. 
Borden, Premier, 814. 
Botha, General, 655, 748, 749. 
Bounties {see also Brussels sugar convention, and Tariffs, countervailing): 

Early Dutch, 461. 
British colonial tariff policy in the Crown colonies (see also Table ©f contents, p. 279); 
Treaties, 288. 

Tariff policy and system, 38, 292. 
Tariffs of the colonies, general description by groups — 
Free ports, 295. 
Malay States, 297. 
East Africa, 303. 
West Africa, 310. 
Oceania, 313. 
West Indies, 218. 
Miscellaneous, 324. 
India, 332. 
Differential tariffs — 

Summary and conclusions, 367. 
Federated Malay States, 337, 649. 
West Africa, 339. 
Indian opinion regarding, 347. 
Export duty on hides from India, 352. 
Minor, 358. 
Cyprus, 360. 
West Indies, 362. 
Khodesia, 649. 

Disappearance (1842-1855), 634. _ 
Preferential movement in Crown colonies, significance of, 370. 
British Crov>-n colonies: 

Tariff policy in, Ch. Y, p. 279; summary, 38, 292, 367. 
Preferences in import duties, 47, 360, 362, 367, 649. 
Preferences in export duties, 53, 337, 339, 352, 361. 
Value of British preference to, 824. 
British East Africa, 290, 298, 303 (see Kenya). 

British Empire (see also Great Britain, and under names of colonies): 
Area and population, 5, 282. 
Treaties 289. 
British Guiana, 281, 284, 315, 707. 
Tariff, 263, 318, 364. 
Shipping subsidv, 715. 
British Honduras, 280, 284, 708. 
Tariff, 318, 364. 

Relations with Canada, 705, 706; shipping subsidy, 715. 
British North Borneo, 281, 321. 

Tariff, 324. 
British Oceania, tariffs, 297, 314, 324. 
British Somaliland, 281, 298. 

_ Tariff, 303. 
British South Africa (see also Table of contents, p. 737, and Union of South Africa): 
Tariff policy, summary, 760. 
Tariff history, 738. 
British preference (1903-1910), 742. 
Tariff since 1910, 748. , 

Relations with other Dominions, 752; with Mozambique, 754. 
Acquisition, 281, 737. 



INDEX. 841 

British South Africa — Continued. 

Definition, 737. 

Tariffs of Rhodesia, 755. 

South- West Africa protectorate, 760. 
British West Africa, 306. 

Tariffs, 310. 

Differential export duties, 339, 340. 

Treaties, 27, 144, 240. 
British West Indies (see also Table of contents, p. 659): 

General description of tariffs, 318. 

Summary of preferential tariffs, 362. 

Relations with Canada, 696-714. 
Agreement of 1912, 706. 
Agreement of 1920, 711. 
Shipping subsidy, 715. 

Acquisition, 281. 

Commercial importance, 315. 
Brunei, 281, 321. 

Tariff, 324. 
Brussels antislavery treaty, 89. 
Brussels sugar convention, 154, 648, 699. 

France withdraws, 168. 

Italy withdraws, 416. 

Great Britain TvithdraM's, 815. 
Cabildo, 547. 
Cabinda, 499. 
Cambodia, 137. 
Cameroons. (See Kamerun.) 
Canada (see also Table of contents, p. 659): 

Tariff policy, summary, 724. 

Preferences in import duties, 47, 668-692, 

Tariff history to 18 79 , 660 . 

Movement for reciprocal preference, (1879-1897) 662. 

Preferential policy, (1898-1907) 668, (1907-1911) 675, (1911-1921) 685. 

Agreement with the United States, 680. 

War revenue act, 685, 689, 691. 

Franco-Canadian trade agreem.ents, 667, 676, 685, 692. 

Relations with other British possessions, summary, 693. 

Relations with British West Indies, 696; preferences granted in 1898, 697; royal 
commission on, 703; agreement of 1912, 706; agreement of 1920, 711, 

Relations with Belgium, 677; Netherlands, 677; "Italy, 678; Newfoundland, 696, 
731. 

Administration of custom^s, 719. 

Reciprocal tariff, 664. 

Demand for lower tariff, 689, ' 

Concealed preferences, 661, 717 ff. 

Preferences accorded to New Zealand, 694; South Africa, 695; Crown colonies, 
695, 

Reciprocity with the United States, (1854) 661, (1911) 680. 

Conversion of foreign currencies, 67, 691. 

Antidumping law, 718. 

Most-favored nation treaties, 666, 724. 

Position of, with respect to British treaties, 722. 

Controversv with Germany, 649, 672, 700. 

Direct shipment, 717, 720: 

British preference to (before 1860), 631, 660; (1919), 816, 824. 

Acquisition, 1, 281, 

Value in eighteenth century, 2 fn. 

Union, 3. 

Trade per capita, 16 fn. 

Decrease in imports from Great Britain, 71, 
Canada- West Indies trade agreement (1912), 706; text, 709; trade agreement (1920), 

363, 711. 
Canal Zone. (See Panama Canal Zone.) 
Canary Islands, 531, 532, 534. 

Tariff, 546. 

Concealed preferences, 548. 

Commercial importance, 542. 



842 INDEX. 

Cape Colony (Cape of Good Kospe), 281, 738, 746. 

Tariff policy (1855-1896), 739. 

Effect of Cobden treaty, 739. 

Outvoted on preference, 743. 
Cape Yerde Islands, 479, 481. 

Tariff, 520; duties on alcoholic beverages, 495. 
Capital and colonial trade, 76. 
Caroline Islands, 227, 229, 241. 
Ceuta, 531, 533, 534, 550. 

Duties, 554. 
Ceylon, 281, 290, 321, 451, 479. 

Tariff, 324, 359, 370 fn. 

Canadian preference accorded to, 690, 694. 
Chad, Lake, 27, 144, 220, 240. 
Chamberlain, Austen, 48, 656, 816, 819-822. 
Chamberlain, Joseph: 

Attitude toward preference, 644-651, 743. 

Campaign for imperial preference, 336, 651, 673. 
Chandernagar. 137, 218. 
Channel Islands, 9, 10. 
Chartered companies: 

Early colonial, 2. 

National responsibility for, 8. 

In Congo Free State, 95. 

Portuguese, 489, 516, 517. 

British North Borneo Co.. 321. 
Chelmsford, Baron, 344 fn., 345. 
China, 6, 346. 

Open door in, 27. 

Ti-eaty with Japan, 446. 
Chosen. (See Korea.) 
Churchill, Winston, 654, 820. 
Cinchona, 14, 464. 
Cirenaica. [See Libia.) 

Classification, a method of discrimination, 64. 
"Clause 47,'' 756. 
Coalition cabinet: 

British, 811, 815. 

Canadian, 686, 689. 
Coasting trade, 31, 60. (See also Shipping, and Direct shipment.) 

Algeria, 182. ' . ' 

Dutch East Indies, 60, 465. 

Portuguese colonies, 61; Mozambique, 509. 

Spanish colonies, 61, 537. 

United States. 61, 580; Philippines. 592, 600; Porto Pico, 606. 
Cobden treaty, 142, 634-636. 739, 740. 
Cochin China, 132, 137. (See Indo-China). 
Coefficients of increase. 155, 186. 
Coffee, 212. 

Canada's penalty duty (1879), 663. 

In Java culture svstem. 463. 

Protection to, in" Porto Pico, 609, 611; Jamaica, 321; West Africa, 311 fn. ^ 

Preference to colonial, in France, 167, 195, 200: Somalia, 405; Great Britain, 
816, 818, 824; Spain, 541; Canary Islands, 550; Portugal. 490. 

Differential export duty upon, in Angola, 506; Mozambique, 514. 

Consumption duty upon, in Morocco, 208, in Syria, 271, in Egypt, 871. 
Colonial conferences: 

1887,638; 1894,641; 1897.644; 1902,646.670; 1907,653,792; 1911,656. 

Imperial war conference, 1917, 813. 
Colonial products, 14, 23, 24. 

Advantage of free entry to mother country, 33, 55. 

Treatment in the market of the mother country, summary, 65-59; Belgium, 
123; France, 147, 154, 159, 167, 195; Germany, 244; Great Britain (before 
1860\ 631. 633: (1919), 816; Italy, 382; Eritrea, 392; Libia, 420; Somalia, 405; 
Japan, 438, 444; Netherlands, 462; Spain 540; Portugal, 489; United States, 
580. 

''Colonial products. '' 55; treatment in France, 154, 167. 

M ono -culture and diversity, 317 . 



INDEX. 843 

Colonial tariff policies : 

General summary, 31-3G. 
Belgium, Ch. II, p. 80; summary. 38. 
France, Ch. Ill, p. 129; summary, 41, 156. 
Germany, Ch. IV, p. 226; summary, 38, '^42. 
British Crown colonies, Ch. V, p. 279; summary, 38, 292, 367. 
Self-governing Dominions, Chs. XIII-XVII; summaries, 39, 724, 760, 777, 807. 
Italy, Ch. VI, p. 372; summary, 40, 382. 
Japan, Ch. VII, p. 425; summary, 41, 439. 
The Netherlands, Ch. VIII, p. 450; summary, 38, 461. 
Portugal, Ch. IX, p. 478; summary, 40, 486, 489, 498, 506, 517. 
Spain, Ch. X, p. 580; summary, 40, 539. 
United States, Ch. XI, p. 571; summary, 42, 578. 
Classification of, 31; political division, 31; economic division, 32. 
Exceptions, 42. 
Types, of, 32. 

Tariff assimilation, 33. {See also United States, France, Japan.) 
Preferential tariffs, 34. (See also Italy, Portugal, Spain, and British Dominions.) 
Open-door policies, 35. (See also Belgium, Germany, Netherlands, British 
Crown colonies, and other colonies listed on page 36.) 
Colonial tariffs (see also Tariffs, Import duties, Export duties, and under names of 
countries and of colonies): 
Methods of making. (See Government.) 
History of — 

Congo Free State, 84. 
France — 

Assimilated colonies, 163. 
Tunis, 184. 
Morocco, 204. 
Equatorial Africa. 219. 
Germany, 239. 

Southwest Africa, 250. 
East Africa, 252. 
Togo, 258 fn. 
Great Britain. 287. (See also Table of contents, p. 630.) ^ 

India, 332. 

Canada, to 1879, 660; 1879-1897, 662; 1898-1907, 668; 1907-1911, 675. 
Relations with West Indies, 696. 
South Africa. (See Table of contents, p. 737.) 
New Zealand. (See Table of contents, p. 763.) 
Australia. (See Table of contents, p. 779.) 
Old colonial system, 630. 
Free-trade movement, 634. 
Movement toward protection, 636. 
Italy- 
Eritrea, 387. . 
Somalia, 400. 
Libia, 415. 
Japan, 435. 
Portugal, 485, 489. 
Ambriz, 500. 

Loanda, Benguela, Mossamedes, 502. 
Mozambique, 508. 
Spain, 535. 

Spanish Guinea, 558. 
United States- 
Philippines, 587, ff, 
Porto Rico, 605. 
Panama Canal Zone, 625. 
Colonial trade. (See Trade, colonial.) 
Colonies (see also Dominions): 
Definition, 5, 6. 
Classification, 5. 

Doubtful uses of term "colonial," 8 
Plantation and settlement, 13. 

185766^—22 54 



844 INDEX. 

Colonies — Continued. 

Tropical and temperate. 13. 

Representation in national legislatures. 33; France. 140; Portugal, 484; Spain, 534. 

Listed bv import tariff system. 36. 
Colton Act. 586. ^ 
Commerce. {See Trade.) 

Commission of Inquiry, Congo Free State. 90 fn., 98 fn.. 99, 102 fn.. 104. 
Committee on Commercial and Industrial Policy after the War, 812. 

Final report. 813. 
Comoro Islands, 137. 151. 
Concessionary companies: 

Congo Free State, 95. 

Mozambique. 489, 516; Nvassa Co., 517. 
Conference of Berlin (1885). 26, 82, 239. 

General act of, 85; text, 85; continuance in force. 87, 88; insufficiency of, 93, 96, 
100, 112. 

Proposed rcAdsion of general act. 120. 
Congo, Conventional Basin of the, 26. 

Defrnition. 85. 

Map of. 26. 
Congo. (See Belgian Congo. French Congo. Portugiiese Cango.) 
Congo Free State (see also Table of contents, p. 80): 

Tariff history and treaties. 84-90. 

"Open door'' in practice. 90-112. 

Land regime. 91-97. 

Taxation. 98-100. 

Annexation to Belgium. 114. 

Map of. 94. 
Congo Piver. navigation of. 86. 
Conservation, object of export duties 51. 
Consumers. 56. 

Consumption duties (see also Octrois de mer); in France. 150; French colonies, 169, 
176; Morocco, 208; Korea. 445: Canarv Islands. 547; S\Tia. 271; Gennan East Africa 
(1890). 253; Egypt, 371. 
Conventions. (See Treaties.) 

Conversion of depreciated currency. (See Ad A'alorem duties, and Currency.) 
Cook Islands, tariff, 775. 
Copra. 14. 25, 57. 77. 

Marketed by Governor of Samoa. 613; of Guam, 617. 

Decreased exports from Philippines. 580. 581. 
Com laws. British: 

Early. 631; repeal in 1846. 633: 1902. 647. 
Cotton, 14. 23, 25, 230, 299. 301. 
Cotton goods. (See also Longcloth.) 

Importance in colonial trade, 14. 15. 333. 

Assessment in the Philippines, 69. 596. 

Effects of differentials upon, in Eritrea, 395; Somalia, 40^. 

Treaty rate upon, in Tunis. 184 fn, 186. 

Preferencein Jamaica. 366. 
Council of Agricultiu'e, Canadian, 687. 
Covenant. (See League of Nations. "> 
Crerar. T. A.. 689. 
Crown colonies, usage of term. 282. 
Cuba. 8, 30, 699. 
Curagao, 454, 460. 

Tariff, 475. 
Currency (see also Ad valorem duties): 

Depreciated, effect upon trade and tariffs, 66, 156; upon British and Canadian 
preference, 713 fn. 

Absence of, in Congo Free State, 102. 

Eg^'ptian pound, 305 fn. 

Indian rupee, 329 fn. to table, 331. 

Portuguese escudo, 481 fn. 

Straits Settlements dollar, 337 fn. 

Moroccan peseta, 208 fn. 

Maria Theresa thaler, 401 fn., 407 fn. 



/ 



INDEX. 845 

Customs duties, average rates of, in: — 

German colonies, 243; Kenya, 304; Egypt, 305 fn.; West Indies, 319; Cyprus, 
324 fn.; Ceylon, 325; Fiji', 325; India, 334; Formosa, 442; Dutch East Indies, 
470; Philippines, 598; Canada (1878), 663, (1897); 668; Newfoundland, 729; 
Australia, 789, 795, 798; Loanda, 503; Madagascar, 170 fn.; Tunis, 185. 
Customs union, 33, 382. (See also British South Africa.) 

Proposed Australian, 780. 

Hawaii and Alaska, 599. 

Proposed Dutch, 468. 
Cyprus, 281, 284, 321, 360. 

Tariff, 324, 360. 
Dahomey and the Ivory Coast: 

Open door in, 27, 216; treaty provisions, 144, 216. 

Tariff, 216; export duties, 217. 

Commercial importance, 136, 216. 
Dairen, 429, 433, 441, 448. 

Danish West Indies. (See Virgin Islands [United States].) 
Deakin, Alfred, 655, 783, 784, 789, 793. 
Deferred duties, Australian, 801. 
Delgado, Cape, tariff, 509. 
De Lima v. Bid well, 577 fn. 
Denmark: 

Colonial tariff policy of, 35 fn. 

Sale of Virgin Islands, 620. 
Dernburg, Bernhard, 229, 234, 236. 
Direct shipments: 

Required bv preferential laws, 60; in trade of France, 150, 193 (effect of French 
requirement, 159); Tunis, 185, 188; Spain, 541; Philippines, 593, 600; Canada, 
677, 689, 717, 720; Australia, 790, 802. 

In trade between United States and Dutch East Indies, 465. 

Option in Canada- West Indies trade agreement, 712. 

Effect of Indian duty on hides, 356. 
Discriminations (see also Tariffs, differential) : 

Definition of open, 63; of concealed, 64, 69. 

Unfair, 65, 69; by classification, 64; by licensing systems, 70. 

Against German trade, Tunis, 186; Morocco, 208; New Zealand, 773; Great Britain, 
829. 
Djibuti, 381, 385. 
Dodecanese, 420. 

Tariff, 421. 
Domaine de la Couronne, 94, 95. 
Domaine PriA^e, 94. 
Dominica, 315,707. 

Tariff, 318. 
Dominican Republic, 8. 

Dominions, British, tariff policy of, Chs. XIII-XVII. (S^e also Australia, Canada, 
New Zealand, South Africa, Newfoundland.) 

Type of perferential tariffs, 34. 

Summary of tariff preferences, 39, 47, 48. 

And British treaties, 290. 

Value of British preference to, 824. 

Independent colonies, 10. 
Drawbacks, 387, 439, 720. 

Korea, 444. 

Philippines, 595. 
Dumping. (See Antidumping.) 
Dutch East Indies (see also The Netherlands) : 

Present tariff, 469. 

Tariff history, 466. 

Commercial importance, 452, 455. 

Coasting trade, 465. 
Dutch Guiana, 454, 457, 459. 

Tariff, 474. 
Dutch West Indies. (jSee Dutch Guiana, and Curasao.) 
Dyestu ffs ; 

Preferential restrictions in Crown colonies, 351; in Great Britain, 829. 



846 I5TDEX. 

Edwards, Gen. Clarence, 597, 598. 
Egypt: ^ 

Tariff, 303, 305, 358. 
Ti-eaties relating to, 30, 290. 
Colony or protectorate, 8. 
Acquisition, 281. 
Commercial importance, 299. 
Emigration: 

And colonial trade, 75. 
From Germany, 227, 229. 
Asiatic, to colonies, 75 fn., 299, 316, 321, 322. 
Empires, colonial: 

Development of, 1, 79. 
Area, 3, 5. 
Population, 5. 
History of — 

Summary, 1-5, 
Congo Free State, 80. 
France, 130. 
Germany, 227. 
Great Britain, 280. 
Italy, 373. 
Japan, 425. 
Netherlands, 450. 
Portugal, 478. 
Spain, 530. 
United States, 573. 
Entrepot trade {see also Transit trade) : 
Canadian tariff and, 720. 
Of Lisbon, protected by Portuguese treaties, 486; fostered by differentials on 

nationalized products, 494, 505. 
Penalized by surtaxes on indirect importation, France, 199, French Guinea, 199; 

French Morocco, 208. 
Dutch, 465. 
Eritrea: 

Present tariff rates, 390; rate on alcohol, 380, 390. 
Effects of tariff differentials, 393. 
Taiiff history, 387. . 
Government, 376. 
Situation and commerce, 384. 
Exchange rates. (See Ad valorem duties.) 
Exemptions. (»S€e Free list.) 
Exploration. {See Empires, history of colonial.) 
Export duties: 

Pates and preferences in, summary, 50-52. 
United States, constitutional prohibition, 579. 
Pui'poses, 50. 

Incidence of, 166, 351, 354. 
Differential export duties — 
French Indo-China, 167. 
Tunis, 188. 

French Oceania, 201; New Caledonia, 52 fn. 
India, hides and skins, 352; proposed duty on jute, 351. 
Federated Malay States, tin ore, 333. 
Nigeria, tin ore, 339. 
British West Africa, palm kernels, 340. 
Somalia, 405, 407, 411. 
Portuguese colonial, 51. 

Angola, 499, 503-505, 507. 
Ambriz, 502. 

Mozambique, 509-511, 513, 517; Nya-ssa Co., 517. 
Cape Verde Islands, 521. 
Sao Thome, 522. 
Spanish colonial, 540. 
Philippines, 587. 
Spanish Guinea, 561. 
United States — 

Philippines (1901-1913), 592. 



INDEX. 847 

Export duties — Continued. 
Revenue duties — 

Congo Free State, 89. 

Belgian Congo, 124. 

French assimilated colonies, 166. 

Algeria, 183. 

French nonassimilated colonies, 195. 

Morocco, 208, 211. 

French West Africa, 217. 

German colonies — 

German Southwest Africa, 251. 
German East Africa, 254. 
Kamerun, 256. 
Togo, 258. 
New Guinea, 260. 
Kiaochow, 263. 
British policy, 292. 

British Crown colonies, by groups, 297, 304, 313, 320, 325; India, 335. 
Italian colonies — 
Eritrea, 388, 391. 
Libia, 418. 
Korea, 445. 

Dutch East Indies, 470. 
Curasao, 475. 
Portuguese colonies, 51. 

Portuguese Guinea, 524. 
Portuguese India, 525. 
Timer, 526. 
United States — 

Virgin Islands, 622, 623. 
Sliding scale used in Belgian Coneo (1913), 124; Reunion, 166; Guadeloupe, 
166, 167; Southwest Africa, 251 fn.-' Nigeria, 340; St. Kitts and Antigua, 320 fn.; 
Federated Malay States, 337; Dutch East Indies, 471; Angola, 506. 
Falkland Islands, 295, 358. 

Tariff, 297. 
Federated Malay States, 295. 
Tariffs, 297. 

Differential export duty on tin ore, 337. 
Fees, minor, 65. 
Fernando Po, 531, 534, 539, 556. 

Tariff, 558. 
Fielding, William Stevens, 650, 665, 667, 072-676, 681, 697, 698, 702, 
Fiji Islands, 281, 284, 321. 

Tariff, 324, 358, 359, 
Finance, colonial: 
Germanv, 235. 
Netherlands, 458, 460, 474. 
Spain, 535. 
United States: Philippines, 584; Porto Rico, 603; Samoa, 615; Virgin Islands, 

621. 
Portugal, 484. 
Firearms. {See Arms.) 
Foraker Act, 603, 607. 
Formalities, 69, 126. 
Formosa, 426, 431. 

Tariff assimilation, 439, 441. 
Government, 434. 
Commercial importance, 427. 
Foster, G. E., 696, 697, 713, 787. 
France (see also Table of contents, p. 129): 

Open-door treaties, 27, 144, 145, 204, 216, 221. {See also Treaties.) 

Commercial treaties, 29, 146, 676, 692. (See also Treaties.) 

Cobden treatv, 142, 634-636. 

Treatment of^colonial products, 57, 195; also 147, 153, 159, 164, 188,218,221,222. 

Treatment of British products, 636. 

Policy in regard to shipping in colonial trade, 62, 150, 159, 182, 188. 

Development of colonial empire, 1, 130. 

Trade with colonies, 19, 139, 163. 



848 IK-DEX. 

Free area,s, in Congo Free State, 94, 95 fn. 

British concession in Mozambique, 507 fn. 
Free lists: 

Necessarily nonpreferential, 43. 
Characteristics of, 45, 55. * 

Importance of, in Gold Coast, 312: West Indies, 319; Fiji, 325; Dutch East Indies, 
470; Newfoimdland, 728; Eritrea, 389, 391; Italian colonies, 384; Libia, 417, 
418; Dodecanese, 421; Australia, 798. 
In Belgian Congo, 119; Morocco, 208; Mesopotamia, 272; Tanganyika, 273; Ca- 
meroons, 274; Western Samoa, 277; German colonies, 242; Curasao, 475; Japan, 
436; Korea, 444, 445; British Crown colonies, 293, 297, 304-6, 311-2, 319, 320, 
325; Portuguese colonies, 501-527, passim; Spain, 537-9, 549, 562; Spanish 
Guinea, 559; Newfoundland, 728. 
''Empire free list," in Canada, 675; New Zealand, 772; British West Indies, 363, 
364. 
Free ports: 

Tariffs of British, 295. 
Tsingtao, 262, 
Port Stanley, 297 fn. 
Port Said and Zeyla, 304. 
Assab, to 1899, 387. 
Dairen, 448. 
Riouw, 468, 472. 
Macao, 489. 

Melilla and Ceuta, 554. 
Canary Islands, 546. 
Willemstad, 475. 
Panama and Colon, 626. 
Wahis Bay, 760. 
Free trade (see also Tariffs for reyenue; Free ports): 
Distinguished from the open door, 35. 

In Great Britain, 287; relation to open-door policy, 287, 292; dominance of prin- 
ciple, 634; issue in election of 1906, 652, 654; of 1910, 656. 
In French intercolonial trade, 158. ^ 

In Central Africa, 4; in certain colonies, 35; Conyentional Basin of the Congo, 85; 
French India, 218; India, 333; Ceylon, 694; New South Wales, 667; Portu- 
guese Guinea, 525; Canary Islands, 546; Holland, 460, 667; American Samoa, 
615. 
Between France and the assimilated colonies, 158. 
Between Japan, Korea, Formosa, and Saghalin, 439. 
Between United States and — 
Philippines, 597. 
Porto Rico, 606, 607, 611. 
Guam, 618. 

A^irgin Islands, 621, 623. 
MoA'ement in Europe, 3. 

Policy maintained by Great Britain, Holland, and Germany, 4. 
Proposed, throughout British Empire, 641, 644, 646, 647. 
Freight rates : 

Effects on colonial trade, 60, 73. 

Restricted by preferential tariff laws in Mozambique, 513; in Sao Thome and 
Principe, 522. 
French colonial tariff policy (see also Table of contents, p. 129): 
Present system, summary, 156. 
Tariffs of the assimilated colonies, 163. 

Tariff schedules, 169; additional duties, 176. 
Al2:eria, 179. 
Tunis, 184. _ 
Tariffs of nonassimilated colonies, 191. 
Senegal and Guinea, 197. 
French Oceania, 200. 
Morocco, 204. 
Somaliiand, 214. 

Dahomey and the lyorv Coast, 21&. 
French India, 218. ^ 
Equatorial Africa, 219. 
New Hebrides. 222. 



INDEX. 349 

French colonial tariff policy — C-ontinued. 

Treaty limitations, 144.' 

Tariff law of 1892, 143, 147. 

Modifications since 1892, 151. 
French Equatorial Africa: 

Treaty pro\dsions, 144, 145, 219; Protocol of Lisbon, 221, 

Open door in, 220. 

Tariff, 221; export duties, 221. 

Commercial importance, 136, 219. 
French Guiana: 

Tariff system, 164. 

Tariff schedules, 169. 

Additional duties, 176. 

Description, 138. 
French Guinea, 136. 

Tariff, 197. . 

French India: 

Tariff, 218. 

Acquisition, 131. 

Commercial importance, 137, 218. 
French Morocco, 155. 

Open door in, 27, 204; French desire to close the open door, 78, 206. 

Treaties, 204, 210. 

Import tariff, maritime, 208; overland, 210; consumption duties, 209. 

Discriminations against German products, 208. 

Export duties, 208; overland, 211. 

Protectorate, 7. 

Acquisition, 132. 

Commercial importance, 135, 213. 

Government, 139, 204. 
French Oceania, 138. 

Tariff, 200. 

Acquisition, 3. 

Commercial importance, 138, 200. 
French Revolution, 2. 
French Somaliland: 

Treaty provisions, 146. 

Tariff', 214; export duties, 215. 

Acquisition, 132. 

Commercial importance, 137, 214. 
French West Africa, 197, 216. {See oho Senegal and Dahomey.) 
Friendly Islands, 310. 

Tariff, 314. 
Gaboon: 

Tariff system, 164; tariff schedules 169; additional duties, 176. 

Assimilated, 144. 
Gait's tariff, 661. 
Gambia, 306. 

Tariff, 310. 

Differential on palm kernels, 340, 
Geddes, Sir Auckland, 826. 
Geography: 

Effect on tariffs, 13, 42. 

Effect on colonial trade, 73, 162. 
George, David Lloyd {see also Coalition Government): 

Unfavorable to preference (1907), 654, 655. 

Becomes premier, 812. 

Favors preference in existing duties, 813, 815, 819. 

On preference to mandated territories, 821. 
German colonial tariff policy {see also Table of contents, p. 226): 

Open-door treaties, 239. 

Tariff system, summary, 242; Southwest Africa, 250; East Africa, 252; Kamerun, 
255; Togo, 257; New Guinea, 259; Samoa, 261; Kiaochow, 262. 

Absence of concealed preferences, 244. 



850 ' INDEX. 

German East Africa: 

Open door in, 240. 

Tariff, 252. 

Commerce, 251. 
German New Guinea: " 

Open door in, 240, 241. 

Tariff, 259. 

Commerce, 259. 
German reparation recovery act, 829. 
German Samoa: 

Open door in, 241. 

Tariff, 261. 

Commerce, 260. 
German Southwest Africa: 

No concealed preferences, 246. 

Tariff, 250. 

Commerce, 249. 
Germany (see a?so Zollverein): 

Open-door treaties, 27, 239; commercial treaties, 29. 

Treatment of colonial products, 58, 244. 

Surtax on imports from, in New Zealand, 773; Great Britain, 829: Tunis, 186; 
Morocco, 208. 

Development of colonial empire, 3, 227. 

Renounces title to colonies, 10, 265; rights in Morocco, 207. 

Trade with colonies, 19, 231. 

Interest in crushing of palm kernels, 340; in Indian hides, 353. 
Gibraltar, 281, 293. 

Tariff, 295. 
Gilbert and Ellice Islands, 282, 295. 

Tariff, 297, 359. 
Goa, 482. 
Gold Coast, 280, 292, 306. 

Open door in, 27, 216. 

Treaty provisions, 144. 

Tariff, 310. 

Differential on palm kernels, 340. 

Treatment of dyestuffs, 362. 

Resources and trade, 307. 
Government and making of tariffs: 

Summary, 31; Congo Free State, 83; Belgian Congo, 118; France, 139, 149, 151; 
Germany, 233; British Crown colonies, 284; Italy, 375; Japan, 434; Nether- 
lands, 458; Portugal, 483; Spain, 534; United States, 574. 
Government supplies: 

Effect on colonial trade, 74; Libia. 420; Cape Colony, 752. 

Value of, in India, 330; Dutch East Indies, 473. 

Resolution of colonial conference (1902), 647. 
Great Britain {see also British colonial tariff policy in the Crown colonies): 

Development of colonial empire, 1, 280. 

Trade with colonies, 19. 

Open-door treaties, 27, 288, 635, 645; commercial treaties, 29, 289, 826. 

Treatment of colonial products, 57, 816; before 1860, 631; corn duties (1902), 647. 

Tariff policy, Chs. XII and XVIII {see also Tables of contents, pp. 630, 810)— 
Summary, to 1914, 657; to 1921, 831; in Crown colonies, 287. 
Old coloiiial system, 630. 
1860-1880, 634. 
Protectionist movement, 636. 
Preferential movement, 644; during the war, 810. 
Establishment of preferences, 816; scope of, 817; text, 818; administration, 

823. 
Preferential import restrictions, 825, 828, 829. 
Antidumping and key industries, 827, 828. 
German reparation and recovery act, 829. 

Value of Canadian preference to, 646, 670; of Australian preference to, 791. 

Annexations disowned by, 3. 
Greene, W. Massey, 799. 
Grenada, 285 fn., 797. 

Tariff, 318, 363, 364. 



IKDEX. 851 

Guadeloupe: 

Tariff system, 164; tariff schedules, 1()9; additional duties, 176; export duties, 166. 

Description, 138. 

Tariff autonomy, 143. 
Guam: 

Tariff, 618. 

Tariff making, 576. 

Description,. 617. 
Guinea. {See French, Portuguese and Spanish Guinea.) 
Haiti, 8. 
Hawaii: 

Great Britain refuses, 3. 

Acquisition, 4. 

Not a colony, 9, 572, 578. 
Hay, John, 440. 
Hemp, 590, 595. 
Hofmeyr, Jan, 639, 739. 
Holland. (5ee The Netherlands.) 
Hongkong, 281, 293. 

Tariff, 295. 
Ifni, 564. 

Immigration. {See Emigration.) 
Imperial conference. {See Colonial conference.) 
Imperial federation, 638. 
Import duties, colonial {see also under names of countries and colonies): 

Rates and preferences, summary, 43-50. 

Methods of comparison, 43, 
India: 

Tariff history, 332; absence of protection, 333. 

Present tariff, 334; export duties, 335. 

Differential export duty on hides and skins, 352. 

Restriction on dvestuffs, 362. 

Treaties relating" to, 30, 290; treaty of 1824, 291. 

Opinion in regard to protection, 344. 

Opinion in regard to differential tariff, 347; proposed differential on jute, 351. 

Canada accords preference to, 667, 668, 690. 

Fi'ee admission of jute into Australia, 798. 

Acquisition, 1, 281. 

Government, 285. 

Area and population, 326. 

Production and industry, 327. 

Trade, 328. 
Indian emigi-ants, 75 fn.. 109, 299, 316, 317, 322. 
Indirect importation {see also Direct shipment): 

Surtaxes upon, in France, 199; Algeria, 181; French Guinea, 199; French Morocco 
(German products), 208. 

In French intercolonial trade, tariff rule, 165. 

Safeguarded in Portuguese treaties, 486, 
Indo-China: 

Tariff system, 164; tariff schedules, 169; additional duties, 176, 

Differential export duties, 166. 

Coefficients of increase, 156. 

Acquisition, 3, 132. 

Protectorate, 7. 

Commercial importance of, 137. 

Government, 139. 
Industrial revolution, 2. 
Industries, native, 16. 
Insular cases, 577. 

Intercolonial trade and tariffs thereon. {See Trade, intercolonial. 
Intermediate tariffs. (/See Tariffs.) 
Internal revenue (American), 579, 595, 611, 623. 
Investments and colonial trade, 76. 
Ionian Islands, 3. 
Irak, 268, 270. 
Italian colonial empire, general description, 374. 



852 INDEX. 

Italian colonial tariff policy (see also Tal;)le of coll,teat5^- p. 372): 

Treaties, 379. 

Tariff policy and system, 382. 

Tariffs of the colonies individually— 
Eritrea, 390. 
Somalia, 404, 
Libia, 416. 
Rhodes, 421. 

Effects of tariff differentials, 393, 408. 

Concealed differential in Libia, 418. 
Italian Somaliland. (See Somalia, and Northern Somaliland.) 
Italy: 

Commercial treaties, 29. 381. 

Treatment of colonial products, 57, 382, 392, 405, 420. 

Development of colonial empire, 3, 373. 

Trade with colonies, 19. 385, 394, 399. 414. 
Ivory, trade restrictions upon in Congo Free State, 92, 96, 100, 104 105, 107. 
Ivory Coast. (See Dahomev.) 
Jamaica. 284. 290, 315, 708." 

Tariff, 318, 366. 

Relations with Canada, 705, 706; shipping subsidy, 715. 
Jameson, Leander Starr, 654 
Japan : 

Tariff system, 435; tariff policy. 438. 

Open-door treaties, 27, 440; commercial treaties, 30, 436. 

Treatment of colonial products, 57, 439. 

Development of colonial empire, 3, 425. 

Trade with colonies, 19, 431. 
Japanese colonial tariff policy (see also Table of contents, p. 425); 

Treaties, 436. 

Tariff policy. 439. ^ 

Tariffs in colonies indiiddually — 
Formosa and Saghalin, 426, 441. 
Korea, 426, 442. 
Kiaochow. 426. 447. 
Kwantung, 426. 448. 
Java, 450. (See also Dutch East Indies.) 

Culture system, 462. 
Johore. (See Protected Malay States.) 
Jones Merchant Marine Act, 61. 
Juba River. 374, 378. 
Jute, 14, 25, 57. 

Proposed differential export duty in India, 351. 

Free admission of, into Australia, 798. 
Kamerun (German): 

Open door in, 27, 240. 

Tariff, 255. 

Commerce, 254. 
Kamerun (mandated territory) : 

Division of mandated territory, 11, 267. 

Pro^dsions of mandate. 268. 

Tariff, 273. 
Karafuto, 428. 

Tariff, 441. 
Karikal. 137. 
Kasai River, 94, 108. 
Kashmir, 336. 
Kasongo, 105. 

Katanga, 96, 104, 115, 116, 118, 125, 127. 
Kedah. (See Protected Malay States.) 
Kelantan. (See Protected Malay States.) 
Kenya (British East Africa) and Uganda, 281, 284, 298* 

Tariff, 303. 
Key industries, protection of, in Great Britain, 827, 



IKDEX, 853 

Kiaochow, 430, 432, 441, 

Tariff, 262, 447. 

Open door in, 241. 

Government, 234. 

Commerce, 262. 
Korea, 431. 

Tariff assimilation, 439, 444. 

Open door in, 27, MO, 442. 

Commercial importance, 428. 

Government, 434. 
Kwantimg, 429, 433, 441. 

Tariff, 448. 
Lambermont, Baron, 93. 

Land regime, in Congo Free State, 91; effects, 97. 
Language, 321. 

And colonial trade, 75. 
Lansdowne, Marquis of, 650. 
Laos, 132, 137. 

Laurier. Sir Wilfrid, 654, 655, 664, 670, 688, 718, 786. 
Law, A. Bonar, 656, 812-815. 
League of Nations: 

Without title to mandated territories, 10. 

Text of article 22, of Covenant, 11. 

Privileges of members under treaty of St. Germain-en-Laye, 121; in mandated 
territories, 268. 
Leeward Islands, 283, 284. 

Shipping subsidy, 715. 
LeopoldII,4,81,83,*91ff. 
Liberal Party, Canada, 663, 664, 687, 688, 690; Great Britain, 366, 635, 641, 644, 652, 

653, 656. 
Liberalism, 3, 289. 
Libia: 

Tariff history, 415. 

Rates of present tariff, 416, 

Concealed differentials, 418. 

Preferences in Italy to products of, 420, 

Government, 376. 

Situation and commerce, 413- 
Lichnowsky, Prince. 484 fn. 
Liquors. (See Alcoholic liquors.) 
Loanda. tariff, 502. 
Lodge, Henry Cabot. 589, 592. 
Loge River, 85, 219, 489, 499. 
London Chamber of Commerce, 811. 
Longcloth, 219; duty in French West Afiica, 198, 199 fn. 
Louis Philippe, 3, 131. 
Lower Congo, freedom of commerce in, 107. 
Lourenpo Marques , 507 . 

Tariff, 509-511. 

Municipal taxes 515. 
Luxuries, dutiable at higher rates: 

Curagao, 475; Japan, 436; Korea, 443; ITnited States, 246; Portugal, 492; Mozam- 
bique, 518; Brunei, 324; Canada, 690; India, 332, 335. 
Macao, 479, 482. 

Tariff, 527; duties on alcoholic beverages, 495. 
McKinley, President, 583, 588, 590, 606. 
Madagascar : 

Import duties, 162, 169, 171; export duties, 166. 

Coefficients of increase, 156. 

Commercial importance, 136. 

Acquisition, 3, 130. 
Madeira, 478, 479, 489, 492. 

Tariff, 492; duties on alcoholic beverages, 495. 
Madrid, convention of, 205. 
Malta, 281, 284, 292, 321. 

Tariff, 324, 360 fn. 
Manchester Chamber of Commerce, 811. 



854 INDEX. 

Manchuria, 446. 
Mandated territories: 
Not colonies, 10. 
Administered as trusts, 12, 268. 
Classification of, 12, 267. 
Cession by Germany and Turkey, 265. 
Commercial importance, 269. 
Open door in, 268. 
Tariffs: Mesopotamia, Syria, and Palestine, 270; Tanganyika, Kamerun, and 

Tego, 272; South- West Africa, New Guinea, Western Samoa, 274. 
Treatment of products of, 278; by Great Britain, 820. 
Text of class C mandate, 274. 
Manila (hemp): 

Remission of Philippine export duty upon, 595. 
Natural monopoly, 590. 
Manufactures:^ 

Imported into the colonies, 15, 299. 
American imports and exports of, 20. 
Exported h'om the colonies, 56. 
In the colonies, 299, 317 fn., 324. 
Maps: 

Africa, 26. 
Asia, 4. 

Caribbean, 316. 
Congo, 94. 
Oceania, 310. 
Marianna Islands, 229, 241. 
Martinique: 

Tariff system, 164; tariff schedules, 169; additional duties, 176. 
Description, 138. 
Tariff autonomy, 143. 
Massowa, 373, 386, 387. 
Mauritania, 136. 
Mauritius, 281, 284, 321. 

Tariff, 324. 
Melilla, 210, 212, 531, 533, 534, 550. 

Duties, 554. 
Mercantilism, 2, 289, 370. 
Merchant marine act, 61. 
Mesopotamia (Irak): 
Mandate, 268. 
Tariff, 270. 
Mijertina, 373, 381, 411. 
Miiner, Lord, 742, 743, 745, 754. 
Molasses, 167 fn., 665, 674, 700, 701, 734 fn. 
Monopolies (see also Raw materials) : 
Natural — 

Colonial, 2 fn.,14, 15, 25; Indian, 348, 349. 
Effects of, on incidence of export duties, 351. 
Manila, 590. 
Jute, 351. 

Skins and light hides, 353, 354. 
Tin, 337. 

Long staple cotton, 301. 
Cinchona, 464. 
Cloves, 299. 
State fiscal — 

Dutch East Indies "culture'! system, 462, 

Egypt, 301 fn. 

France, 180. 

Morocco, 204, 209. 

French India, 218. 

Eritrea, 388, 392. 

Libia, 418. 

Formosa, 442. 

Korea, 445. 

Straits Settlements, 295. 



INDEX. $55 

Monopolies — Continued. 

Trade, based on tariffs. (See Tariffs, differential, effects of, and Trade, colonial, 
with the mother country.) 

Trade, based on other laws (see also Concessionary companies) — 
Australian, in New Guinea, 276, 277. 
Australian oil, 277, 

Early colonial, 2, 287 fn., 738; Dutch, 4G1, 4G3, 467. 
Congo Free State, 90 ff. 
Shipping, in Southwest Africa, 248. 
British, war time, 356, 825. 
Angola, 503 fn. 

Virtual trade — 

Former British, in India, 329; Jamaica, 366. 
Italian, in Libian shipping, 419. 
Montagu, E. S., 286, 347. 
Montserrat, 315, 707. 

Tariff, 318. 
Morocco tariff, 208, 211 (see also French and Spanish Morocco). 
Mossamedes, tariff, 502. 
Most-favored-nation clause: 

Use in commercial treaties, 29. 

In Italian treaties, 381; Japanese, 437; Netherlands, 466; Portuguese, 487; Span- 
ish, 539; Canadian, 672, 693, 722, 724; German, 241; British, 289; Moroccan, 
205, 206. 
Mother country. (See Trade, statistics of colonial.) 
Mozambique Co., 516. 
Mozambique Province, 481, 507. 

Tariff, 508; summary, 517; duties on alcoholic beverages, 495. 

Treaties, 487; treaty relations with the Transvaal, 487, 749, 754. 

Admission of products of, to Portugal, 490. 

Minor differential charges, 515. 
Municipal taxes: 

Not within scope of this report, 32. 

Differentials in, 65, 515, 523. 

In Alexandria, 305; Sao Thome and Princip^, 523; Melilla, 555; Fernando Po, 
561; Lourengo Marques and Beira, 515. 
Napoleon III, 3, 131, 142. 
Natal, 740, 746. 

In South African Customs Union, 742. 
Nationalism and the colonial movernent, 3. 

Nationalization of foreign products, in Italy, 418, 419; France, 1G4; Portugal, 494. 
Native States (see aZso Protectorates): 

Of India, 326; tariffs, 336. 

Of Dutch East Indies,^ 458, 466, 468. 
Navigation (see also Shipping) : 

Congo River, 86 ; proposed removal of restrictions on, 122. 

Zambesi, 85. 

Niger, 122. 
Navigation acts (see also Coasting trade) : 

British, 1 fn., 630, 632, 696 fn. 

American (1817-1820) 632 (1920), 61. 
Negri Sembilan. (See Federated Malay States.) 
Nepal, 283, 326. 
Netherlands: 

Tariff policy, 460. 

Colonial tariff policy, 461; East Indies, 466; West Indies, 474. 

Treatment of colonial products, 58. 

Commercial treaties, 30, 466. 

Culture system, 462. 

Trade with colonies, 19, 455. 

Development of colonial empire, 1, 450. 
New Caledonia: 

Tariff system, 164; tariff schedules, 169; additional duties, 176. 

Commercial importance, 138. 

Acquisition, 3. 



856 INDEX. 

Newfoundland, 639, 641. (See also Table of contents, p. 727.) 

Relations with Canada, 696, 731; United States, 639, 732; British West Indies, 732. 

Features of tariff, 728. 

No genei'al preference to British trade, 729; minor preferential provisions, 734. 

Bargaining proAT-sions of tariff, 735. 
New Guinea (mandated territory), discriminatory regulations, 270. 
New Hebrides, 310. ' ' . 

Tariff, 222, 314, 805. 

Open door in, 27, 222. 

Government, 40. 
New Zealand {see also Table of contents, p. 763): 

Preferences in import duties, summary, 48, 777. 

Tariff history, to 1903, 763. 

Preference established, 766. 

Negotiations with other Dominions, 769. 

Extension of tariff since 1907, 771. 

Regulations respecting depreciated currencies, 775. 

Tariff of Cook Islands, 775. 

Discrimination against Germany, 773. 

Acquisition, 281. 763. 
Nieuwe Afrikaansche Handelsvennootschap. 95. 100. 
Nigeria. 306. 

Treaty provisions. 27, 144, 240. 

Open door, 27. 

Tariff, 310. 

Differential on tin ore, 339: on palm kernels, 340. 
Nogal. 373, 381, 412. 
Non assimilated colonies: 

French, 191. 

Tariff policy, 192; tariff system, 194; differentials, 198. 

Admission of products of. into France, 195. 
Norfolk Islands, tariff, 805. 
Northeastern Rhodesia, tariff, 759. 
Northern Somaliland, 411. 
Northwestern Rhodesia, tariff, 756. 
Nyasaland. 8, 281. 290. 298. 

Tariff, 303. 
Nyassa Co.. 517, 
Obbia. 373, 381, 411. 
Oceania (see also French Oceania, British Oceania): 

Definition, 3. 

Partition, 3. 

Open door in, 27. 

Map of , 310. 
Octrois de mer (see aUo Consumption duties): 

Definition, 148. 

Method of levying, 149. 

Algeria, 181. 

French Oceania. 201. 

French assimilated colonies, 169; table, 176. 

Svria, 271. 
Ogowe River, 82, 85. 219. 
Open door (see also Open-door colonies, and Treaties, open-door): 

Definition. 35. 

Guaranteed in mandated territories of class B, 12. 

Reasons for, 4, 35, 42; German, 229, 239; Dutch, 462. 

Principle losing ground, 78. 

Operation in Congo Free State, 90; summary, 112. 
Open-door colonies (see also Treaties, open-door, "^and chapters on Belgium, Germany. 
British Crown colonies, and the Netherlands): 

List of. 36. 

Trade of, 23. 

Dominance of the mother country in colonial trade of, 73. 

Exceptions to national policy, 42. 

British, German, Belgian, and Dutch. (See list on p. 36.) 



INDEX. 857 



Open-door colonies — Continued. 
French- 
Morocco, 204. 
Somaliland, 214. 
Dahomev and Ivory Coast, 216. 
India, 218. 

Equatorial Africa, 219. 
New Hebrides, 222. 
Italian — 

Northern Somaliland, 411. 
Rhodes, 420. 
Japanese — • 

Kiaochow, 447. 
Kwantung, 448. 
Portuguese — ■ 
Congo, 499. 
Macao, 527. 
Spanish — 

Canary Islands, 542. 
Morocco, 565. 
United States — 
Samoa, 611. 

Panama Canal Zone, 624. 
Orange Free State, 281, 738, 740, 747. 
Ostriches, export duties and prohibitions: 
German Southwest Africa, 251. 
German East Africa, 254. 
British South Africa, 251. 
Ottawa conference, (1894), 641, 765, (1912) 706, 707, (1920) 711, 
Oudida, 204fn.,212. 
Pago-Pago, 573 fn., 611, 613. 
Pahang. {See Federated Malay States.) 
Palestine, 268, 270. 

Palm kernels, differential upon, in British West Africa, 340^. 
Panama Canal Zone. 
Tariff history, 625. 
Not a "possession," 628. 
Acquisition, 4. 
Government, 624. 
Panama, Republic of, 8. 

Treaties of United States with, 624, 626. 
Free trade with Panama Canal Zone, 627, 
Papua, 281. 

Tariff, 805. 
Paris economic pact, 773, 812. 
Paris, treaty of, 588, 617. 
Payne, Sereno, 607, 684. 
Pelew Islands, 229, 241. 
Perak. {See Federated Malay States.) 
Perils. {See Protected Malav States.) 
Persia, 6, 79, 123. 

Open door in, 28. 
Pescadores, 425. 
Philippines: 

Tariff history — 

Treaty of Paris, 588. 
Act of 190 r, 589. 
Act of 1902, 591. 
Export duties, 592. 
Act of 1905, 595. 
Act of 1906, 596. 
Present tariff — 

Act of 1909, 597. 
Act of 1913, 599. 
Internal revenue, 595. 
Coastwise shipping provisions, 600. 
Insular cases, 577. 



858 ixDEx. 

Philippines — Continued. 

Open door in, to 1909, 27, 588. 

Acquisition, 4. 

Occupation by Spaniards, 530; Spanish tariff, 536, 587. 

Commercial importance, 580. 

Government, 583; organic act (1916), 585; Philippine Legislature, tariff making 

powers, 575. 
Finance, 584. 

Products subject to general tariff of Indo-China, 150 fn. 
Pondicherry, 131, 137, 218. 
Population: 

The colonial empires, 5. 
Belgian Congo, 115, 
French colonies, 133. 
German colonies, 230. 
Mandated territories, 269. 
British Empii"e, 282. 

Free ports, 294. 

Malay States, 296. 

East "African colonies, 300. 

West Africa, 306. 

Oceania, 310. 

West Indies, 316. 

^fiscellaneous, 322. 

India, 326. 

Newfoundland, 727, 
Italian colonies, 374. 
Japanese Empire, 425. 
Netherlands Empire, 451. 
Portuguese Empire, 480. 
Spanish Empire, 532. 
United States and territories, 573. 
Port dues, 63, 297, 371. 

Melilla, differential, 555. 
Porto Rico: 

Tariff histoiy, 605; Foraker Act, 607. 
Present tariff, 611. 

French tariff rates on products of, 30. 
Classed as a colony, 9. 
Commercial importance. 600. 
Government, 603, 611. 
Finance, 603. 
Portsmouth, treaty^ of, 426. 

Portugal {see also Portuguese colonial tariff policjO* 
Development of colonial empire, 1, 478. 
Trade with the colonies, 19, 483. 
Commercial treaties, 29, 486. 
Treatment of colonial products, 57, 489. 
Policy in regard to shipping in colonial trade, 61. 
Government of colonies, 483. 
General legislation for the colonies, 494. 
Treatment of British products, 637. 
Portuguese colonial tariff policy {see also Table of contents, p. 478): 
Tariff policy, 486, 489, 498, 506, 517. 
Treaties, 486. 

Treatment in Portugal of colonial products, 489. 
General tariff legislation for alcoholic liquors, 495. 
Tariffs of the colonies individually — 

Angola, 499. 

Mozambique, 508. 

Cape Verde Islands, 520. 

Sao Thome and Piincipe, 521. 

Portuguese Guinea, 523. 

Portuguese India, 525. 

Timor, 526. 

Macao, 527. 



INDEX. 859 

Portuguese colonial tariff policy — Continued. 
Colonial export duties, 51. 

Angola, 499, 503, 504, 507. 
Mozambique, 509, 510, 513, 516, 517. 
Cape Verde Islands, 521. 
Sao Thome, 522. 
Portuguese Guinea, 524. 
Portuguese India, 525. 
Timor, 526. 
Portuguese Congo, tariff, 499. 

Portuguese East Africa. {See Mozambique Province.) 
Portuguese Guinea, 482. 

Tariif, 523; duties on alcoholic beverages, 495. 
Portuguese India, 482. 

Tariff, 525; duties on alcoholic beverages, 495. 
l' Preferences (see aZso Discriminations): 

Definition of products entitled to, in Australia, 802; Philippines, 600 ; Canada, 

716, 718; Great Britain, 823, 829. {See also Direct shipment.) 
Comparisons of amounts of, 43, 45 ff. 
Administrative, in Australia in favor of Canada, 803. 
Concealed — 

Summary, 63-70. 

Absence of, in German colonial tariffs, 244; Dutch colonial tariffs, 472; 

British Crown colonies, 358. 
In Libia, 418; Somalia, 403; Canary Islands, 548; Canada, 661, 717 ff. 
Imperial {see also Canada, Australia, New Zealand, British South Africa and 
India) — 

Movement toward, in Great Britain (1896-1914), 644-658 (1914-1919), 810-815. 
Adoption of, by Great Britain, 816. 
Reciprocal — 

Not favored by conference of 1897, 645. 
Desired by conference of 1902, 647, 671. 
Chamberlain's attitude (1902), 646, 652, 

Advocated by Australia and Cape Colony, 653, 654, 800; by Laurier, 654. 
Attitude of South Africa, 752-754; of Canada, 666, 671, 673, 675; of New 
Zealand, 768, 771. 
Prices, rise of , 24. 
Principe, 481. 

Tariff, 521; duties on alcoholic beverages, 495. 
Prohibitions {see also Restrictions, and Alcoholic liquors): 
Early colonial. 2. 

In Morocco, 204, 209; Belgian Congo, 125; Korea, 444; Libia, 416, 418; Eritrea, 
392; Portugal, 492; Palestine, 271; Cameroons, 274; Southwest Africa, 251; 
Kamerun, 256; Togo, 258; Samoa, 261; Mozambique, 514, Portuguese India, 
525; Spanish Guinea, 561. 
Property rights, in the Congo Free State, 84, 86. 
Protected Malay States, 295. 

Tariffs, 297. ^ 

Protection : 

Influence upon colonial movement, 4. 

In import duties of dependent colonies, 33, 44, 297, 319, 333, 344, 355, 367, 383. 

In colonial export duties, 50, 383. 

Protection to products of mother country in the colonial market, 14, 33, 72, 73. 

{See also Assimilated colonies, and Preferences.) 
Protection for colonial products in market of mother country. {See Colonial 

products.) 
Protection and preferences, 34, 662, 674, 675. 
Revival in France, 143. 
In Japan, 436, 438. 

Abandoned by Great Britain, 287, 634. 

Movement toward, in Great Britain, 636; tariff reform in Great Britain, 652; 
adopted by Unionist Party, 653; protective feature of British preferential 
tariff, 646, 652, 824; of war-time restrictions, 825. 
In Dominions, 32, 34, 35. 
In Canada, 662-664, 670, 673. 

185766°— 22 55 



860 INDEX. 

Protection — Continued. 

In South Africa. 745, 749, 750. 

Opinion in Australia, 780 ff., 796, 799. 

Protectionism in India, 333, 344, 355. 

Movement in Netherlands, 461 ; Dutch East Indies, 462. 
Protectorates, 7, 339, 282, 284 fn., 288. 
Protocol of Lisbon, 88, 221. 
Public works, effect on colonial trade, 74. 
Quelimane, tariff, 511. 
Railroads : 

In colonial trade, 75, 212. 

General act of Berlin, 87; British-Portuguese treaty, 488-9; British-French- 
Italian treaty, 215. 

Railway materials, 74 fn., 76, 89. 

Connection with preferential policy in Canada, 718. 
Raw materials : 

Monopolization of, 14, 15, 52, 369, 514. 

Exported from colonies, 14. 

Dependence of United States upon imports of, 20. 

Import duties upon, 33, 34, 56; usually duty free, 33; exceptions, 55. 

Export duties upon, effects of, 50, 166, 351, 354. 

Differential duties upon, 58, 356. 
Reciprocity (see aho Canada, South Africa, and Australia) : 

United States-Canada, (1854), 661, (1911) 680. 

United States-Cuba, 699. 

Netherlands, 461. 

Newfoundland-Greece, 735. 

Authorized in New Zealand, 768; New Zealand-South Africa, 769. 

Discriminates against other parts of the British Empire, 661, 735, 741. 
Religion, freedom of, 86, 121. 
Restrictions {see also Prohibitions) : 

War-time, in Great Britain, 825; Australia, 802; France, 155; French Morocco, 
209; British West Africa, 342; British Crown colonies, 295, 367; India, 352, 356; 
Libia, 415; Dodecanese, 422; dyestuffs, 361. 

Control of trade by licenses, 70; in Great Britain, 825; Italy, 415; Portugal, 492; 
Western Samoa, 277; Togo, 258; Federated Malay States, 297 fn.; British West 
Africa, 342. 

Embargoes, in Belgian Congo, 124; France, 155; Morocco, 209; Tunis, 155; India, 
352; New Guinea, 277; Portugal, 492; Sweden, 355. 
Retaliation : 

Views of, in Germany, 248; India, 347, 352; Great Britain, 650, 822; South Africa, 
743; British West Indies, 709. 

Canadian, against the United States, 663-666, 683. 
Reunion : 

Tariff system, 164; schedules, 169; additional duties, 176. 

Export'duties, ]66. 

Commercial importance, 137. 
Revenue. (See Finance.) 
Rhodes, 420, 649, 739. 

Tariff, 421. 
Rhodes, Cecil, 649, 739, 740, 755. 
Rhodesia, 281, 738. {See also Northeastern Rhodesia.) 

Tariff, 755. 

''Clause 47," 756. 
Rice, 15, 335. 

French policy, 33, 147, 167 fn. 
Rio Muni, 531, 533, 534, 539, 556. 

Tariff, 559. 
Rio de Oro, 534, 563. 
Ripon, Marquess of, 642, 755. 
Rosebery, Lord, 653. 
Ruanda and Urundi, 267. 

Under class B mandate, 268. 
Rubber, 14, 23, 25, 57, 89, 115, 323, 506, 514. 

Canadian preference upon, 690. 

World production of, 296 fn. 



INDEX. 861 

Rubber — Continued. 

In Congo Free State, trade restrictions, 92, 94; taxation, 98; trade of Upper 
Congo, 107. 

Export duty on, in French West Africa, 217; Equatorial Africa, 221; Belgian 
Congo, 119, 125; Malay States, 297; Angola, 506; Mozambique, 514; Spanish 
Guinea, 561. 

Cultivated, exempt in British North Borneo, 325; German East Africa, 254; 
Kamerun, 256; Dutch East Indies, 471; Tanganyika, 273. 
Sabi River, 508, 511, 515, 517. 
Safeguarding of industries bill, British, 828. 
Saghalin, 428. 

Tariff, 441. 
Sahara 135. 
St. Christopher-Nevis, 315, 707. 

Tariff, 318. 
St. Croix, tariff, 622. 

Saint-Germain-en- Laye, proposed treaty of, 28; text, 120. 
St. Helena, 295. 

Tariff, 297. 
St. John, tariff, 623. 
St. I.ucia, 315, 707. 

Tariff, 318, 364. 
St. Pierre and Miquelon, 138. 

Tariff, 202. 
St. Thomas, tariff, 623. 
St. Vincent, 315, 707. 

Tariff, 318, 363. 
Salisbury, Lord, 640, 644, 645. 
Samoa, American (see also German Samoa, and Western Samoa) : 

Open-door treaty, 27, 577. 

Tariff, 615. 

Tariff making, 576. 

Acquisition, 4. 

Description, 611. 
Sankey judgment, 827. 
Sao Thome, 481. 

Tariff, 521; duties on alcoholic beverages, 495. 

Municipal taxes, 523. 
Sarawak, 281, 295. 

Tariff. 297. 
Seddon, Richard John, 766 ff . 
Selangor. (^iSee Federated Malay States.) 
Self-governing Dominions. (See Dominions.) 
Senegal : 

Tariff, 197. 

Acquisition, 131. 

Commercial importance, 135, 197, 
Sette Kama, 219, 220. 
Sevres, treaty of, 120 fn., 265 fn., 270 fn. 
Seychelles, 281, 290. 318. 

Tariff, 318, 358. 
Shipping (see also Direct shipment, and Coasting trade): 

Preferential tariffs in favor of national, 59; Spanish, 537; Portuguese, 61. 

Monopoly in South- West Africa, 248; early British, 630-2. 

Importance of, in British free ports, 294. 

Subsidies for, in Canada-West Indies trade, 714. 

On Congo River, 101. 
Slam, 6. 
Sierra Leone, 281, 306. 

Tariff, 310; differential on palm kernels, 340. 
Singapore, 329 fn., 337 fn., 339, 457, 467. 
Slave trade: 

Brussels antislavery treaty, 89, 145. 
Solomon Islands, 282, 310. 

Tariff, 314, 359. 



862 INDEX. 

Somalia : 

Tariff histon^. 400. 

Present tariff rates. 404. 

Effects of differentials, 408. 

Government. 376. _ 

^Yitllin the Congo Basin. 379. 

Situation and commerce, 399. 
Somaliland. (See British. French, and Italian Somaliland.) 
South African Customs Lnion, 737. 

Preferential tariff, 744, 745, 749, 750. 

Preference to Canada, 752; Australia, 752; Xew Zealand. 753. 
Southwest Afiica (see also German Southwest Africa), provisions of mandate, 269. 
Southern Rhodesia, tariff, 756. 
Spain: 

Treatment of colonial products, 57, 540, 546, 556, 562, 569. 

Open-door treaties. 27, 538; commercial treaties. 29. 539. 

Policy in regard to shipping in colonial trade. 61. 541. 

Development of colonial empire. 1. 530. 

Trade with the colonies, 19, 544, 552, 558, 568. 

Government of colonies, 544. 

Treatment of British products, 636. 
Spanish colonial tariff policy (see also Table of contents, p. 529j: 

Present policy and system, summaiy, 539. 

Tariffs in colonies individually — 
Canary Islands, 546. 
^.lelilla and Ceuta, 544. 
Spanish Guinea, 558. 
Rio de Oro, 565. 
Spanish Morocco, 208, 210, 569. 

Early colonial tariffs, 536. 

Treaties, 538. 
Spanish Empii'e, 5, 532. 
Spanish Guinea, 534, 556. 

Tariff, 559. 
Spanish Morocco. 533, 534, 564, 565. 

Tariff, 208, 210, 569. 
Special regime colonies (preferential): 

List. 36. 

French, J97, 200, 202. 
Specific duties: 

Possible discriminatory effect, 69. 

Difficulty of comparing, 43. 
Spheres of influence, definition, 6. 
Spooner Act (Panama Canali, 624 fn. 
Spooner amendment, 583, 592. 
Stanley, Hemy M., 81, 82. 
State domain of the Congo Free State, 94. 
Statistical duties: 

Definition, rates, preferences, 65. 

French, 182 fn.; French colonies, 149; Algeria, 181. 

Eritrea, 387, 388; Dodecanese, 222. 

Belgian Congo, 125. 

Italian colonies, 384. 

Portuguese colonies, 505. 
Statistics ^see also Trade, statistics of colomalj. 

Defects of colonial, 17 fn., 19, 232 fn., 245 fn., 329, 330, 332 fn., 418, 420, 545. 
Steel-Maitland, A. D., 340, 342. 
Straits Settlements, 281, 293. 

Tariff, 295, 360. 

Canadian preference accorded to, 694. 
Subsidies, shipping, in colonial trade, 60, 74: Canada-West Indies, 714; Dutch, 465; 

Australian, 277. 
Subventions to colonial governments, to German colonies, 235; Dutch West Indies, 
454, 460,475; Spanish, 535; Somalia, 410; Belgian Congo, 119; Virgin Islands, 621. 
Sudan, French, 135. (See also Anglo-Egj-ptian Sudan.) 



INDEX. 863 

Sugar, 15, 251, 271, 316, 395. 

Treatment of Philippine, in United States, 593, 597, 599, 700. 
Production in Porto Rico, 601, 700. 
United States-Cuba reciprocity treaty, 699. 
Preference in Canada on, 698, 700-705, 707, 710, 712, 713. 
Dutch color standard, 714. 
Preference in Great Britain on, 824, 825. 
Brussels sugar convention, 699. 
"Color line' ' in Australia, 785. 

Dutiable in mother country, 33; France, 154, 168; Portugal, 490. 
Surinam, 454, 457, 459, 460. 

Tariff, 474. 
Surtaxes. {8ee Indirect importation, and Direct shipment, required by preferential 

tariff laws.) 
Swaziland, 281, 737, 738, 755. 
Syria, 268, 270. 

Taft, William Howard, 583, 589, 593, 595, 678, 684. 
Tanganyika (territory) : 

Under class B mandate, 268. 
Tariff, 273. 
Tangier, 204, 567. 
Tariff autonomy: 

Japanese, 435, 438, 
British Dominions, 10, 289, 635, 660. 
Great Britain, 654. 
India, 284, 285. 
Philippines, 575. 
Tariffs {see also A d valorem duties) : 
Tariff acts (United States)— 

McKinley Act (1890), 637, 663, 664, 697. 
Wilson Act (1894), 698 fn. 
Dingley Act (1897), 588, 591-593, 607. 
Effect on Canada, 664, 665. 
Effect on West Indian sugar, 698. 
Payne-Aldrich Act (1909), 678, 706. 
Underwood Act (1913), 599. 
Fordney bill (1921), 579, 618. 
Methods of making. (See Government and making of tariffs) 
Bargaining (see also Tariffs, intermediate): 
Newfoundland, 735. 
Advocated by Chamberlain, 651. 
Countervailing: Japanese, 436; United States, 698. (See a^so Brussels sugar con- 

• vention.) 
Differential or preferential (see also under names of countries and colonies, Import 
duties. Export duties. Customs duties, Concealed preferences) — 
List of colonies with, 36. 
Definition, 34. 
Of the Dominions, 34, 39. 
Of dependent colonies, 34. 
Rates in colonial import duties, 45, 48. 
Methods of comparison, 43. 
Comparisons of national systems, 45, 48. 
Absolute ainounts of differentials, 48. 
In favor of national shipping, summary, 59, 63. 
Effects of, summary, 70; in Canada, 71; Italian colonies, 393, 408. 
The outlook in regard to, 78. 
Establishment since 1890, 78. 
Rates of, in colonial export duties, 51. 
In the market of the mother country, 55. (See Colonial products, treatment 

of.) 
Percentage of trade of British Crown colonies subject to, 369, 370. 
Alleged domestic character, 650, 706. 
Replace earlier prohibitions, 4. 
Opposition of Great Britain to, 697. 
Intermediate — 

Canadian, 674, 676-678, 681, 693, 716, 717. 
Australian, 800. 



864 n^DEx. 

Tariffs — Continued. 

For revenue (see also Consumption duties, and Export duties) — 

In British colonies, 292; India, 333, 345; Newfoundland, 728; Dutch East 

Indies, 468; German colonies, 237; Belgian, 123. 
In dependent colonies, 14, 35. 
Minimum {see also Treaties, other, limiting colonial tariffs) — 
French, in the colonies, 146. 
In assimilated French colonies, 147. 
Penalizing — 

Japan, 436; Canada, 6<33; Newfoundland, 736. 
German action in Canada, 650. 
Preferential. (^S'ee Preference.) 
Prohibitive, 338, 341-343, 362. ' 
Protective. {See Protection.) 
"Tariff reform" movement in Great Britain, 652, 656. 
Tariff wars {see also Retaliation): 
Canada-Germany, 649, 672. 
Canada-NewfouDdland, 639. 
Taxation (se-eaZso Tariff for revenue. Export duties, Municipal taxes, and Consumption 
duties): 

Labor tax in Congo Free State, 98; effects upon commerce, 99. 
Of trading companies, 100. 
Of commercial traA'elers, 248. 
Temperate zone colonies, 16. 
Tete, tariff, 511. 
Timor, 479, 482. 

Tariff, 526: duties on alcoholic beverages, 495. 
Tin, 14, 23, 25. 

Tin ore, differential on, in Federated Malay States, 337; in Nigeria, 339, 
Tobacco, 15, 250; 305, 404, 773. 

Dutiable in mother country, 33; Japan, 436. 
Treatment of Philippine, in United States, 593, 597, 599. 
Preference in Great Britain on, 825. 
Excluded from Canadian "reciprocal tariff." 665. 
Monopoly, Eritrea, 388, 392; Dodecanese, 422; Korea, 445. 
Imports of, into United States from Dutch East Indies, 465. 
Togo: 

Tariff, 257. 

Open door in, 27, 240. 
Di\dsion of mandated territory, 11, 267. 
Commerce, 257. 
Tonga, 310. 

Tariff, 314, 359. 
Tonkin, 132, 137. 
Tonnage dues, 63, 774. 

Mozambique, 515; Portuguese Guinea, 525, 
Ceuta, 554. 
Early Dutch, 461. 
Libian anchorage dues, 418. 
Trade: 

Colonial — 

Characteristics of, 14. 

Typical exports, 15. 

Importance of , 16. 

Of the Dominions, 17, 21. 

Factors other than the tariff affecting, 72. 

Relation of trade to tariff policy in West Indies, 707; Newfoundland, 730i 

Cape Colony, 739, 740. 
Early colonial, 2. 
Intercolonial — 

Summary of tariffs in, 53. 

Table of British Empire preferences, 54. (See also under names of Do- 
minions.) 
French policy, 148, 153, 155, 193. 
Somalian preference to Eritrea, 405. 
Preference in Spanish, 541, 550. 
Early Canadian, 661. 



INDEX. 865 

Trade — Continued . 

Intercolonial — Continued. 

Australian colonies duties act, 765. 

Disadvantage to, from Australian preference to Great Britain, 788. 
Australian attitude toward, 793. 
Mozambique, 511, 512. 
United States, 53. 
Foreign Vessels in, 31. 
Statistics of colonial — 
The world, 17. 

With the mother country, percentages, 19; imports vs. exports, 76; Belgian, 
117; French, 162; German, 231; Italian, 385, 394, 399, 409, 410, 414, 415; 
Japanese, 431; British, 642, 643; Netherlands, 455; Spanish, 552, 558; 
Australian, 790. 
With the United States, 21, 22; Malay States, 296; India, 332, 357. 
Imports of chief colonial products into United States, 25. 
Congo Free State, 106-112. 
Belgian Congo, 116, 117. 
French, 139, 163; Somaliland, 214. 
German, 231. -' 

Southwest Africa, 249. 

East Africa, 252. 

Kamerun, 255. 

Togo, 257. 
, New Guinea, 259. 

Samoa, 260. 

Kiaochow, 261. 
Mandated territories, 269. 
British Crown colonies — 

Free ports, 294. 

Malay States, 296. 

Eastern Africa, 300; Egypt, 301. 

West Africa, 308. 

Oceania, 310. 

West Indies, 318. 

Miscellaneous, 322; Ceylon, 323. 

India, 328, 349, 357. 
Italian, 375. 

Eritrea, 385, 394. 

Somalia, 399, 409, 410. 

Libia, 413. 
Japanese — 

Formosa, 428, 431. 

Korea, 428, 432. 

Kiaochow, 432. 

Dairen, 433. 
Dutch East Indies, 452, 455. 
Portuguese, 483. 
Spanish, 533. 

Canary Islands, 543. 

Melilla and Ceuta, 552. 

Fernando Po, 558. 

Rio de Oro, 564. 

Morocco, 568. 
. United States, 574. 

Philippines, 580. 

Porto Rico, 601. 

Samoa, 612. 

Guam, 617. 

Virgin Islands, 619. 
Transit dues: 

Mozambique, 487; Angola, 505; Sudan, 304. 

Prohibited by general act of Berlin, 86; in Egypt and Morocco, 205, 212; Somali- 
land, 215. 



^^ t^TDEX. 

Transit traae (see also Free ports') : 

Canadian discrimination against American, 66. 
French, tkroiigh Algeria into Morocco, 213. 
Throiigh Eritrea and Somaliland, 146. 
In South Africa, 740. 
Ti-ansportation (see also Direct shipment. Indirect importation, and Raih'oads): 
Congo Free State monopoly of, 101. 
Competition in Canada, 720. 
Transvaal, 281, 738, 740, 747. 

Relations with Mozambique, 48/, 749, 754. 
Treaties, conA'entions. and agreements: 
Open-door — 

Simmiary, 26, 31: British treaties, 288; German, 239. 
Scope of pledges, 27 fn. 
General act of Berlin, 85. 

Declaration of Brussels, 87. 

France-Portugal-Congo Free State (protocol of Lisbon , 88, 221. 

Italy-Great Britain-Germany, 401. 

Application to Somalia, 401. 

Proposed re^^.slon of, 120. 
Convention of Madrid, 205. 
Act of Algeciras. 206. 
Versailles^, 206, 265, 267. 441. 

United States-Congo Free State, (1884) 84, (1891) 88. 
United States-Great Britain-Germany (Samoa), 241, 576, 614. 
United States- Spain (Philippines) 588, 617. 
Great Britain- Belgiimi, 635, 640, 645. 
Great Britain- France (Xew Hebrides), 210. 
CTreat Britain- France (West Africa), 144, 216. 
Great Britain-Germany (Gulf of Guinea •, 240. 
Great Britain-Germany (Pacific islands', 240, 241. 
Great Britain-Germany (Sa^-age and Tonga ', 241. 
Great Britain-Germany (Togo and Gold Coast), 258 fn 
Great Britain (Eastern Africa i, 303. 
Egypt, 305. 

Great Britain-Portugal. 82, 239. 
Great Britain-Zollverein, 635. 640, 645. 
Germanv-Coneo Free State, 84. 
Germanv-China, 262. 
Tunis, 145, 185. 
Morocco, 146, 204. 

Somaliland and Eritrea, transit through, 146. 
Japan's pledge for Fvorea, 440. 
K^^'antung and Kiaochow, 440. 
Ivorea-Great Britain, 1883, 442. 
Spain. 538. 

Treaty of Paris, 588, 617. 
Other, liniirins; colonial tariffs — 
Summary 726-31. 

Restricri'ng sale of arms, 90, 120, 123. 
General act of conference of Berlin, 26, 85. 
Act of Algeciras, 27. 
Rate limiting. 26, 28. 

British East Africa, 28. * 

Brussels, (1890), 28, 89. 145, (1899K 28, 89, 145, (1906), 28, 89, 14^ 

China, 28. 

Congo, 28; French Congo, 28; Portuguese Congo, 28. 

Dahomev, 28. 

Egn^t, 28. 

German East Africa, 28. 

Gold Coast, 28. 

Great Britain-Portugal (1810), 81. 

Morocco. 28. 

Saint-Germain-en-Lave, 28; text of treaty, 120. 

Somalia, 28. 

Togo. 28. 



INDEX. 867 

Treaties, conventions, and agreements — Continued. 
Other, limiting colonial tariffs — Continued. 

Rate limiting— Continued. 
Tunis, 28. ' 

Germany, 29. 
United States, 29. ^ 
Oolonial policy in commercial treaties of — 

Belgium, 29. 

France, 29, 146. 

Great Britain, 29, 289. 
. Italy, 29, 381. 

Japan, 30, 436. 

Portugal, 29, 486. 

Spain, 29, 539. 

Canada, 724. 
Other treaties, l>y country — 

Congo Free State (A. I. A.^ and native chiefs, 82. 

France-Morocco (land frontiers), 210. 

France-Japan, (1911) 146, 437. 

Great Britain-Italy (Eritrea and Sudan), 388. 

Great Britain-Portugal (Mozambique and South Africa), 488, 754. 

Great Britain, war-time agreements, 826. 

Canada and British treaties, 722; classification of commercial treaties, 29. 

Canada-France, 676, (1921) 692. 

Canada-Belgium, 677. 

Canada-Netherlands, 677. 

Canada-Italv, 678. 

Canada-United States, (1854) 661, (1911, unratified) 680. 

Canada-Germany, 672, 

Canada-South Africa, 695, 752. 

Canada-British West Indies a913) 362, 706, (1920) 363, 711. 

Germany- Japan, 437. 

Italy- Japan, 437. 

Japan-China (rail-borne trade), 446. 

Netherlands, 30, 466. 

Portugal (Mozambique) -Transvaal, 487. 

Portugal-Great Britain, (1642, 1815) 81. (1810) 485 fn. 

Portugal-France, (1786) 81, (1911) 146. 

South Africa-Australia, 752, 784. 

South Afri.-a-New Zealand, 753, 769. 

South African Customs Union, 741, 742, 745, 747. 

United States-Panama, 624, 626, 627. 

United States-Newfoundland, 733. 
Treaties by name — 

Brussels sugar convention, 648. 

Versailles, 206, 265, 267, 441. 

Paris economic pact, 812. 

Cobden treaty, 142, 634, 739. 

Treaty of Ouchy, 374. 

Bond-Blaine convention, 733. 

Sevres, 120 fn., 265 fn., 270 fn. 

Portsmouth, 426. 
Trene-ganu. (See Protected Malav States.) 
Trinidad and Tobago, 315, 707. 
Tariff, 318, 3G3, 364. 
Shipping subsidy, 715. 
Tripolitania. (See Libia.) 
Tropical colonies: 

Characteristic imports, 14. 
Trade, 16. 
Tunis: 

Treaty provisions, 145, 184. 

Taiiff system, 185; additional duties, 187; export duties, 187. 

Difftrential features, summary, 191. 

Relati'>ns with Algeria, 180, 185. 

Discrininations against Germany, 186. 



868 INDEX. 

Tunis — Continued. 

Treatment in France of imports from, 188. 

Pi-otectorate, 7. 

Acquisition, 131. 

Commercial importance, 134, 184. 

Government, 139. 
Turkey, open door in, 28. 
Turks and Caicos, 315. 

Tariff, 318. , ' 

Tutuila: 

Commerce, 611, 

Tariff, 615. 
Undervaluation (see also Antidumping laws): 

A form of concealed preference, 70. 

In Libia, 418. 
Underwood, Oscar. 598. 
Union of South Africa, 738, 748. 
Unionist (Conservative) Party. 652, 653, 655, 656. 
United States (see also Tariff acts): 

Treaties, open-door. 27, 576, 588, 613-615; commercial, 29. 

Treatment of colonial products, summary, 57, 580; details, 597, 607, 616, 623, 628. 

Development of colonial empire, 3, 572. 

Trade with the colonies, 19. 21, 574, 581, 601, 612, 617, 619; with Egypt, 303; 
Ceylon, 323; India. 332. 

Merchant marine act, 61; navigation acts (1817-1820), 632. 

Recognizes Congo Free State, 83. 84. 

Interest in tin smelting. 338; palm kernels, 343; hides and skins, 355; Somalian 
trade in cottons. 410. 

Possibility of retaliation against India. 349. 

Not entitled to most-fa^ored-nation treatment in Great Britain and Canada, 668; 

• treatv of 1815, 289. 

Reciprocity with Canada (1854)^ 661 (1911) 680; with Cuba, (i99. 

Relations with West Indies, 696 fn., 697-699, 707. 

Reduction of New Zealand duties favorable to, 772, 

Relation of depreciated foreign currencies to trade of, 67, 691. 

At conference of Berlin, 26. 
United States colonial tariff policy (see oho Table of contents, p. 571): 

Summary of tariff policy and system, 576-580. 

Tariffs of colonies individually — 

Philippines, history, 587 ; present tarifr\ 597. 
Porto Rico, history, 605; present tariff, 611. 
Samoa, 615. 
Guam, 618. 
Vfrgin Islands, 621. 
Panama Canal Zone, 625. 

Treatment of colonial products, summary, 57, 580; details, 597, 607, 616, 623, 628. 

Dependencies of United States, 572. 

Government and making of tariffs, 574. 

Total trade of colonies, 574. 
Valuation. (See Ad valorem duties, Antidumping laws, and Undervaluation.) 
Yermeersch, Arthur, 90 fn., 97, 98 fn. 
Versailles, treaty of, 265, 267, 441. 

Pro^dsions for mandated territories, 10. 
Vfrgin Islands (United States) : 

Tariff, 621. 

Tariff making, 576, - . 

Acquisition, 4. 

Description, 618. 

Government, 620. 

Finance, 621. 
Virgin Islands (British), 315. 

' Tariff, 318. 
Wahia Bay, 760. 



INDEX. 869 

War (see also Restrictions) : 

Effect on trade and industry in — 
British West Africa, 309. 
India, 330, 333, 352. 
Eritrea, 386. 
Somalia, 399, 400. 
Libia, 419. 

Belgian trade with the Congo, 117. 
Egypt, 301. 

Dutch trade with the East Indies, 455 fn., 457, 465. 
Effect on tariffs (see also details of tariffs, Section IV of Chapters II-XI) — 
On export duties, 50, 293. 

Canadian war surtax, 685, 710; removal, 689, 691. 
British Crown colonies, 297, 311, 324, 333, 339, 345. 
Weihaiwei, 282, 293. 

Tariff, 295. 
West Indies, British, 281. (See also Table of contents, p. 659.) 
Commercial importance, 315. 
General description of tariffs, 318. 
Summary of preferential tariffs, 362. 
Relations with Canada, 696-714. 
Map of, 316. 
Western Samoa (mandated territory), discriminatory tariff, 277. 
Wharfage dues, St. Helena, 297. 
White, Sir Thomas, 689. 
Windward Islands, 315. 
Tariff, 318. 

Shipping subsidy, 715. 
Wool, 14, 15. 
Woolens, 396. 

Canadian preference on, 670, 673, 674. 
Yap, 267. 

Zambesi River, 85, 481, 488, 507, 755. 
Zanzibar, 281, 290, 298, 401. 

Adheres to general act of Berlin, 85; other treaties, 253, 303 fn., 401. 
Tariff, 303. 

Leases of territory, 253, 373. 
Administration of Benadir, 401. 
Zollverein, British treaty with, 635, 640, 645. 
Zululand, 281. 



H 165 84 t 



; 



LIlBMy'?: 






>^\'' ^^^ ^'^^ 





















%/ 






'iV' 



^°-'* 






4 o>. 



U ' fi 





■S ^^ 







:> « 







^ aV^ 
* ^"^ ^ * 











< ^ 4 e^X" 



SS^*.'.. 









^^n^>2l 



